Newmark Knight Frank Devencore

Newmark Knight Frank Devencore

December 02, 2010 07:30 ET

Newmark Knight Frank Devencore Reports on Active Toronto Office Market

Space Absorption Accelerating in Most of Canada's Major Cities

TORONTO, ONTARIO--(Marketwire - Dec. 2, 2010) - In its Real Estate Market Study published today, Newmark Knight Frank Devencore reported that high tenant demand for the new building inventory in Toronto's Downtown District is bringing renewed vitality to the city's corporate real estate market. In the first two quarters of 2010, approximately 1.4 million square feet was absorbed, outstripping even the more optimistic predictions that real estate analysts made at the beginning of this year. Combined Class "A" and Class "B" vacancy rates in Toronto's Downtown District currently stand at 6.8%, leaving 4.1 million square feet of space vacant. Outside of the city core leasing activity has been relatively stagnant over the past six months, and it will likely take some time before these corridors see occupancy rates return to pre-recession levels. 

"The extent of the current demand for the new breed of office space downtown Toronto is significant enough to raise the possibility of more new office development in the near future," said Allan Schaffer, President/Broker of Record of Devencore Realties Corporation Canada Limited, Brokerage. "Further, this flight to state-of-the-art Class "A" product will see vacancy rates at unusually high levels in some older Class "A" buildings. Tenants that carefully research the full range of market opportunities will secure the best deals."

NKF Devencore's study also notes that the boom in downtown condominium construction that has taken place over the past decade should support the long-term stability and growth of the downtown office market. "As more and more of our skilled workforce moves into Toronto, there is an increasing competitive advantage for employers who wish to attract and retain the best and the brightest to locate their organizations downtown as well," Mr. Schaffer added. "Corporations that may once have targeted lower-cost suburban office parks now seriously considering office space in close proximity to the young professionals and families who have made Toronto their home. As a result, we feel that the downtown office market will be stable over the long term and will continue to expand, driven by corporate tenant and employee demand and supported by blue-chip landlords."

Across the country, the overall Class "A" and Class "B" vacancy rate stood at 7.1% at the end of Q2 2010, up approximately 1.0% from mid-2009. It should be noted, however, that the total inventory of office space in Canada's major cities increased by nearly 6.5 million square feet, or approximately 3%, over the same period. NKF Devencore expects that the positive space absorption that has occurred over the past year should continue in the months ahead as companies consider implementing expansion programs that were deferred in 2008 and 2009.

About Newmark Knight Frank Devencore

Devencore is the Canadian partner of Newmark Knight Frank, one of the largest independent real estate service firms in the world. Newmark Knight Frank Devencore is Canada's largest corporate real estate advisor and brokerage exclusively representing corporate, industrial and retail space users. With offices across the country, Newmark Knight Frank Devencore offers its global clientele comprehensive services that are individually designed to ensure executive real estate decisions are supported by effective strategies and professional execution.

Headquartered in New York, Newmark Knight Frank and London-based partner Knight Frank operate from over 200 offices in established and emerging property markets on six continents. Last year, transactions were valued at more than $32 billion with annual revenues of over $811 million. With a combined staff of more than 6,300, this major force in real estate is meeting the local and global needs.

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Contact Information

  • Devencore Realties Corporation - Canada Limited, Brokerage
    Newmark Knight Frank Devencore
    Allan Schaffer
    President / Broker of Record
    416-366-0366, ext. 231
    Devencore Ltd. - Chartered Real Estate Broker
    Newmark Knight Frank Devencore
    Sylvie Bachand
    Director, Marketing and Communications
    514-392-1330, ext. 225