Newmark Knight Frank Devencore

Newmark Knight Frank Devencore

October 31, 2017 06:30 ET

Newmark Knight Frank Devencore Reports On Space Availability in Downtown Toronto Office Market

Tenant Opportunities Will Be Limited for the Next Few Years

TORONTO, ONTARIO--(Marketwired - Oct. 31, 2017) - Newmark Knight Frank Devencore (NKF Devencore) today announced that the vacancy rate for all office classes in downtown Toronto continues to remain very tight. The most substantial delivery of new space was the E&Y Tower at 100 Adelaide Street West, a 905,000-square-foot building that is almost fully occupied. The 800,000-square-foot One York Street was also recently delivered and is almost fully leased.

"While the next development cycle is currently underway, there is only a limited amount of new office space coming to the market over the next 2-3 years," said Allan Schaffer, President/Broker of Record of NKF Devencore's downtown Toronto office.1 "Pending the completion of major new projects in 2020-2021, vacancy rates will likely decline further as demand for top-tier space continues to be driven by tenants in the financial, legal, media and tech sectors."

Mr. Schaffer also commented on evolving tenancy options in the downtown Toronto office market.

"One of the more interesting trends to emerge of late is the coworking model of office space occupancy, which provides the option of leasing shared space and has the advantages of flexible lease terms, lower up-front costs, and the ability to move into fully built-out space," Mr. Schaffer said. "Until recently, this coworking model has been marketed to individuals or very small firms. However, one of the largest providers of shared space, WeWork, is now offering these advantages to organizations with 500+ employees.

"The model may prove appealing to larger companies that need temporary, project-based space. On the other hand, short-term leases can prove costly, particularly if a company is forced to make multiple moves down the road. Further, the model may not work for businesses that require a degree of confidentiality, as shared common spaces are not conducive to privacy," Mr. Schaffer said.

The NKF Devencore market report also noted that tenants with leases that expire over the next two years should start investigating their options as soon as possible. There may be space available in some older Class A buildings that are being vacated by tenants moving into the new towers but landlords in downtown Toronto will maintain strong negotiating leverage over the next few years.

To see the full market study, visit https://devencorenkf.com/market_information_detail.php?id=32

1 Devencore Realties Corporation
Canada Limited, Brokerage
130 Adelaide Street West, Suite 2929
Toronto, Ontario M5H 3P5

About Newmark Knight Frank Devencore

As part of Newmark Knight Frank, one of the world's leading commercial real estate advisory firms, Newmark Knight Frank Devencore is one of Canada's largest corporate real estate advisor and brokerage, representing corporate, industrial and retail space occupiers and owners. 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. To learn more about our capabilities, please visit www.devencorenkf.com.

About Newmark Knight Frank

Newmark Knight Frank (NKF) is one of the world's leading commercial real estate advisory firms. Together with London-based partner Knight Frank and independently-owned offices, NKF's 15,000 professionals operate from more than 400 offices in established and emerging property markets on six continents.

With roots dating back to 1929, NKF's strong foundation makes it one of the most trusted names in commercial real estate. NKF's full-service platform comprises BGC's real estate services segment, offering commercial real estate tenants, landlords, investors and developers a wide range of services including leasing; capital markets services, including investment sales, debt placement, appraisal, and valuation services; commercial mortgage brokerage services; as well as corporate advisory services, consulting, project and development management, and property and corporate facilities management services. For further information, visit www.ngkf.com.

NKF is a part of BGC Partners, Inc., a leading global brokerage company servicing the financial and real estate markets. BGC's common stock trades on the NASDAQ Global Select Market under the ticker symbol (NASDAQ:BGCP). BGC also has an outstanding bond issuance of Senior Notes due June 15, 2042, which trade on the New York Stock Exchange under the symbol (NYSE:BGCA). BGC Partners is led by Chairman and Chief Executive Officer Howard W. Lutnick. For more information, please visit www.bgcpartners.com.

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