Friday, September 30, 2011

The Toronto Office Market is Shrinking

The Shrinking Office Market in Downtown Toronto

Ontario Real Estate Source

By Brian Madigan LL.B.

Employers appear to be moving out of the downtown core. It seems unusual but small companies are moving into the downtown core and large companies are moving out.
Many properties originally zoned for "office space" have be rezoned for a combination of "commercial and residential".

Two good examples would be Trump Tower on Bay Street and the Shangli-La Hotel on  University Avenue
While Toronto has traditionally been home to the financial services sector, this is one industry that seems to be "on the move".

The banks are relocating to the "905", being the suburbs around Toronto.

A primary example would be the Royal Bank which has relocated about 8,000 jobs to its new location on Financial Drive in Mississauga.

While head offices remain in the downtown core, major departments have fled to the suburbs. If this trend continues, then inevitably there will be a shortage of prime office space downtown. In 1980, 63% of office space was downtown Toronto, now it has declined to 54%.

The prospects do not appear to be high in terms of a current reversal in this trend, so wee see the conversion to residential condominium development. And, pretty soon, the prime properties could be all gone.

So, here's an opportunity: buy out the entire condo, rent it out, then when the office market turns convert it to office space. 

Brian Madigan LL.B., Broker is an author and commentator on real estate matters, if you are interested in residential or commercial properties in Mississauga, Toronto or the GTA, you may contact him through Royal LePage Innovators Realty, Brokerage 905-796-8888