toronto-office-market-report-q4-2016

Research & Forecast Report

GREATER TORONTO AREAOFFICE MARKET Fourth Quarter 2016

2 Research & Forecast Report | Q4 2016 | Greater Toronto Area / Office | Colliers International

Market Summaries

GTA Market Overview ....................................................................................................3 Downtown ............................................................................................................... 4 Midtown .................................................................................................................. 5 Central North .......................................................................................................... 6 GTA North ............................................................................................................... 7 Central East ............................................................................................................ 8 GTA East ................................................................................................................. 9 GTA West .............................................................................................................. 10

Glossary .............................................................................................................................. 11

Table of Contents

3Research & Forecast Report | Q4 2016 | Greater Toronto Area / Office | Colliers International

GTA Market Overview

Market Overview

The overall vacancy rate for the Greater Toronto Area (GTA) office market in Q4 2016 increased slightly from the previous quarter to 5.4 percent, while the availability rate remained at 8.1 percent. Even though four of the seven GTA markets had positive absorption (Central East, GTA East, GTA North and GTA West), overall absorption was negative. Asking rental rates remained around the same value as they were in the previous quarter, but have increased by about $1 per square foot (net rent) and about $2 per square foot (gross rent) since the fourth quarter of 2015. Throughout 2016, GTA office properties not only experienced an increase in the asking rental rates for office space, but in the additional operating costs. The increase in additional costs were the highest in certain GTA West submarkets and the fringe Downtown submarkets. No new office space was added to the market during the fourth quarter. Despite this, throughout 2016, more than 2.6 million square feet of office space was delivered to the market throughout the GTA. This total was larger than any previous year since 2010. The share of new supply in 2016 was split almost evenly between the Downtown (51 percent) and the suburban markets (49 percent). Despite much of the new supply hitting the Downtown market, the vacancy rate has remained almost the same as a year ago, while the availability rate has decreased by about one percentage point, with most of the new supply being absorbed. New supply will likely continue to shape the market in 2017 as more than two 2 million square feet of space is currently under construction, with much more in the planning stages.

Investment Market

In an interesting turn of events, the GTA saw almost 20 percent more sales transactions in Q4 compared to Q3 (60 to 51), but the overall dollar totals were substantially less. Q3 had more than $1.1 billion in sales transactions, but in Q4, the transactions dropped to only $374 million. The main reason was a lack of sales in the Downtown market with 17 transactions for more than $900 million in Q3 compared to only three for $129 million in Q4. The largest sale this quarter was 141 Adelaide Street West with Hydro-Quebec purchasing the property for more than $125 million with a 3.8% Cap Rate– that’s more than one third of the sales volume for the entire GTA. While the Central East may not be the most sought after market, it put forth a very strong showing this quarter with nine transactions and the second highest transaction/dollar ratio. Depending on the building usage by the purchasers, this quarter could be seen as a spark for the Central East.

Market IndicatorsRelative to prior period

Market Q3 2016

Market Q4 2016

Trend

VACANCY RATE 5.2% 5.4%

NET ABSORPTION (67,576) (242,720)

AVAILABILITY RATE 8.1% 8.1%

AVERAGE ASKING NET RENT $19.33 $18.82 *Projected

Occupier Demand

While the financial service industry continues to lead the way for occupier demand, it had its share of total market demand cut into compared to the previous quarter. Certain industries such as technology, communications, advertising and co-working space are collectively demanding more space than previously in the GTA. We could continue to see more balanced demand across numerous industries.

Historical Performance and Forecast

0.0%

1.0%

2.0%

3.0%

4.0%

5.0%

6.0%

7.0%

8.0%

-1,000,000

-500,000

0

500,000

1,000,000

1,500,000

2,000,000

2,500,000

2012

Q4

2013

Q1

2013

Q2

2013

Q3

2013

Q4

2014

Q1

2014

Q2

2014

Q3

2014

Q4

2015

Q1

2015

Q2

2015

Q3

2015

Q4

2016

Q1

2016

Q2

2016

Q3

2016

Q4

2017

1Q

*

2017

2Q

*

2017

3Q

*

2017

4Q

*

0

0.02

0.04

0.06

0.08

0.1

0.12

0.14

0.16

-800,000

-600,000

-400,000

-200,000

0

200,000

400,000

600,000

800,000

1,000,000

2012

Q2

2012

Q3

2012

Q4

2013

Q1

2013

Q2

2013

Q3

2013

Q4

2014

Q1

2014

Q2

2014

Q3

2014

Q4

2015

Q1

2015

Q2

2015

Q3

2015

Q4

2016

Q1

2016

Q2

2016

3Q

*20

16 4

Q*

2017

1Q

*20

17 2

Q*

Net Absorption (SF) Current Qtr New Supply (SF) Vacancy Rate

0

0.02

0.04

0.06

0.08

0.1

0.12

0.14

0.16

-800,000

-600,000

-400,000

-200,000

0

200,000

400,000

600,000

800,000

1,000,000

2012

Q2

2012

Q3

2012

Q4

2013

Q1

2013

Q2

2013

Q3

2013

Q4

2014

Q1

2014

Q2

2014

Q3

2014

Q4

2015

Q1

2015

Q2

2015

Q3

2015

Q4

2016

Q1

2016

Q2

2016

3Q

*20

16 4

Q*

2017

1Q

*20

17 2

Q*


0

0.02

0.04

0.06

0.08

0.1

0.12

0.14

0.16

-800,000

-600,000

-400,000

-200,000

0

200,000

400,000

600,000

800,000

1,000,000

2012

Q2

2012

Q3

2012

Q4

2013

Q1

2013

Q2

2013

Q3

2013

Q4

2014

Q1

2014

Q2

2014

Q3

2014

Q4

2015

Q1

2015

Q2

2015

Q3

2015

Q4

2016

Q1

2016

Q2

2016

3Q

*20

16 4

Q*

2017

1Q

*20

17 2

Q*


Q4 2016 – 4,515,000 Square Feet

Financial Services

Technology

Retail Trade

Consulting

Offices of Lawyers

Engineering

Government

Insurance

Media

Others

36%

13%8%

5%

5%

5%

5%

4%3%

16%

Financial Services

Technology

Engineering

Consulting

Offices of Lawyers

Insurance

Retail Trade

Media

Government

Others


DowntownDowntown saw more than 220,000 square feet of negative absorption in Q4 and the vast majority came from the fringe downtown submarkets. With vacancies at 150 John Street and 250 Front Street West, the Downtown West alone made up more than half of the total this quarter. Despite the negative absorption, the vacancy rate increased by only 0.3 percentage points from the previous quarter. The Financial Core continues to have the most inventory—nearly half of the market—but also the highest availability rate. No other submarket has more than a 6.7 percent availability rate, while the Core is at nearly nine percent.

Trends > Average gross asking rents were recorded at $55.68 in Q4 and

have increased over $2 since Q4 2015, while average additional asking rent was recorded at $26.49 and has increased by nearly $1 since Q4 2015. These are both the highest amounts they have ever been recorded at in the Downtown market.

> Operating costs and taxes on buildings have notably increased in the fringe Downtown submarkets (Downtown East, Downtown West and Downtown South). It’s a trend that we can expect to see throughout 2017.

Notable Lease TransactionsTENANT NAME - ADDRESS TYPE APPROXIMATE SIZE

(SF)

1. Booking.com- 70 University Avenue Direct 70,000

2.Thomson ReutersCanada Limited- 120 Bremner Boulevard

Sublease 49,456

3. Snapchat- 197 Spadina Avenue Direct 30,000

Summary Statistics Q4 2016 Regional Office Market Q3 2016 Q4 2016 Trend

Office Inventory 76,734,000 76,734,000

Net Absorption 296,819 (221,720)

Vacancy Rate 2.7% 3.0%

Availability Rate 6.3% 6.3%

Average Asking Net Rent $29.26 $29.20

Notable Lease Notable Sale New Supply

Upcoming New SupplyADDRESS CLASS FLOORS SIZE (SF) DEVELOPER COMPLETION STATUS

5. 351 King Street East A 17 500,000 First Gulf Q1 2017 Currently Under Construction

6. 1 York Street A 35 800,000 HOOPP / Menkes Q3 2017 Currently Under Construction

7. 100 Adelaide Street West AAA 40 905,722 Oxford Properties Group Inc. Q2 2017 Currently Under Construction

8. 16 York Street A 32 802,000 Cadillac Fairview Coporation Planned

9. Bay Adelaide Centre Phase III North Tower 43 700,000 Brookfield Properties Corporation Planned

Notable Sale TransactionsADDRESS PRICE APPROXIMATE

SIZE (SF)

4. 141 Adelaide Street West $125,125,000 187,945

TORONTO

Union

Dundas

Bloor / YongeBay Castlefrank

Wellesley

Queen’s ParkCarlton StCollege St

Dundas St

Queen St

King St

Spad

ina

Ave

Univ

ersi

ty A

ve

Yong

e St

Parli

amen

t St

Bloor St

Gardiner Expwy

5974

3

128

Lake Ontario

6


0.0%

1.0%

2.0%

3.0%

4.0%

5.0%

6.0%

-400,000

-200,000

0

200,000

400,000

600,000

800,000

1,000,000

1,200,000

1,400,000

1,600,000

2012

Q4

2013

Q1

2013

Q2

2013

Q3

2013

Q4

2014

Q1

2014

Q2

2014

Q3

2014

Q4

2015

Q1

2015

Q2

2015

Q3

2015

Q4

2016

Q1

2016

Q2

2016

Q3

2016

Q4

2017

1Q

*

2017

2Q

*

2017

3Q

*

2017

4Q

*

0

0.02

0.04

0.06

0.08

0.1

0.12

0.14

0.16

-800,000

-600,000

-400,000

-200,000

0

200,000

400,000

600,000

800,000

1,000,000

2012

Q2

2012

Q3

2012

Q4

2013

Q1

2013

Q2

2013

Q3

2013

Q4

2014

Q1

2014

Q2

2014

Q3

2014

Q4

2015

Q1

2015

Q2

2015

Q3

2015

Q4

2016

Q1

2016

Q2

2016

3Q

*20

16 4

Q*

2017

1Q

*20

17 2

Q*


0

0.02

0.04

0.06

0.08

0.1

0.12

0.14

0.16

-800,000

-600,000

-400,000

-200,000

0

200,000

400,000

600,000

800,000

1,000,000

2012

Q2

2012

Q3

2012

Q4

2013

Q1

2013

Q2

2013

Q3

2013

Q4

2014

Q1

2014

Q2

2014

Q3

2014

Q4

2015

Q1

2015

Q2

2015

Q3

2015

Q4

2016

Q1

2016

Q2

2016

3Q

*20

16 4

Q*

2017

1Q

*20

17 2

Q*


0

0.02

0.04

0.06

0.08

0.1

0.12

0.14

0.16

-800,000

-600,000

-400,000

-200,000

0

200,000

400,000

600,000

800,000

1,000,000

2012

Q2

2012

Q3

2012

Q4

2013

Q1

2013

Q2

2013

Q3

2013

Q4

2014

Q1

2014

Q2

2014

Q3

2014

Q4

2015

Q1

2015

Q2

2015

Q3

2015

Q4

2016

Q1

2016

Q2

2016

3Q

*20

16 4

Q*

2017

1Q

*20

17 2

Q*



MidtownWith more than 217,000 square feet of negative absorption—due to key vacancies at 33 Bloor Street East and 20 Eglinton Avenue West—this was likely a mere aberration as there hasn’t been this much negative absorption in one quarter in more than seven years. Due to the high level of negative absorption, the vacancy rate increased by more than one percentage point. Again, this isn’t the norm for Midtown, as there has not been an increase in vacancy rate of this calibre since Q4 2009. Even though its vacancy rate is now more than three percent, it is still among the lowest in the GTA and was steadier over the prior year than any other market.

Trends > Condo and retail developments along Yonge Street continue to

add to the overall expansion and desire of locating in Midtown.

> There are currently more than 9 mixed-use condominium buildings over 30 storeys tall that are under construction or planned within a two block radius of Yonge and Bloor.



Net Absorption 7,474 (217,705)





7. 135 Yorkville Avenue A 11 50,000 Camrost-Felcorp Currently Under Construction

Notable Sale Transactions ADDRESS PRICE APPROXIMATE

SIZE (SF)

4. 20 Birch Avenue $2,794,000 1,650

5. 1043 Bloor Street West $1,820,000 5,477

6. Unit 1404, 175 Cumberland Street $1,650,000

Bloor St

Dundas St

Queen St

Eglinton Ave

Lans

dow

ne A

ve

Yong

e St

Bayv

iew

Ave

Duffe

rin S

t

Lawrence Ave

Gardiner Expwy

3

TORONTO

5

2

4716


0.0%

1.0%

2.0%

3.0%

4.0%

5.0%

6.0%

-250,000

-200,000

-150,000

-100,000

-50,000

0

50,000

100,000

150,000

2012

Q4

2013

Q1

2013

Q2

2013

Q3

2013

Q4

2014

Q1

2014

Q2

2014

Q3

2014

Q4

2015

Q1

2015

Q2

2015

Q3

2015

Q4

2016

Q1

2016

Q2

2016

Q3

2016

Q4

2017

1Q

*

2017

2Q

*

2017

3Q

*

2017

4Q

*

0

0.02

0.04

0.06

0.08

0.1

0.12

0.14

0.16

-800,000

-600,000

-400,000

-200,000

0

200,000

400,000

600,000

800,000

1,000,000

2012

Q2

2012

Q3

2012

Q4

2013

Q1

2013

Q2

2013

Q3

2013

Q4

2014

Q1

2014

Q2

2014

Q3

2014

Q4

2015

Q1

2015

Q2

2015

Q3

2015

Q4

2016

Q1

2016

Q2

2016

3Q

*20

16 4

Q*

2017

1Q

*20

17 2

Q*


0

0.02

0.04

0.06

0.08

0.1

0.12

0.14

0.16

-800,000

-600,000

-400,000

-200,000

0

200,000

400,000

600,000

800,000

1,000,000

2012

Q2

2012

Q3

2012

Q4

2013

Q1

2013

Q2

2013

Q3

2013

Q4

2014

Q1

2014

Q2

2014

Q3

2014

Q4

2015

Q1

2015

Q2

2015

Q3

2015

Q4

2016

Q1

2016

Q2

2016

3Q

*20

16 4

Q*

2017

1Q

*20

17 2

Q*


0

0.02

0.04

0.06

0.08

0.1

0.12

0.14

0.16

-800,000

-600,000

-400,000

-200,000

0

200,000

400,000

600,000

800,000

1,000,000

2012

Q2

2012

Q3

2012

Q4

2013

Q1

2013

Q2

2013

Q3

2013

Q4

2014

Q1

2014

Q2

2014

Q3

2014

Q4

2015

Q1

2015

Q2

2015

Q3

2015

Q4

2016

Q1

2016

Q2

2016

3Q

*20

16 4

Q*

2017

1Q

*20

17 2

Q*




(SF)

1. Omnicom- 33 Bloor Street East Renewal 100,000

2. SP Data Inc.- 1920 Yonge Street Direct 20,387

3. Cirkel International Inc.- 90 Eglinton Avenue East Direct 14,304


Central NorthThe North Yonge Corridor is by far the biggest driver of this market, representing more than 70 percent of total inventory and 90 percent of all available space. Central North saw more than 220,000 square feet of negative absorption, with vacancies in 4101 and 5650 Yonge Street among the key contributors. As such, the market’s vacancy and availability rates both increased from the previous quarter. Gross rental rates in the Central North have slightly decreased since the previous quarter, but net rates have remained relatively stable.

Trends > Even though rental rates are steadily increasing within the North Yonge Corridor, the area remains attractive due to direct subway access, across multiple lines, and an abundance of amenities; smaller companies looking to stay in this area are beginning to consider ownership rather than leasing.

> This market will see a large influx of office space space over the next few years, as developments at 4050, 4800, and 5020 Yonge Street will add over 450,000 square feet.



Net Absorption (116,340) (223,272)





(SF)

1. Warner Brothers- 5000 Yonge Street Renewal 31,319

2. Xerox- 20 York Mills Direct 28,600

3. Empire Insurance- 36 York Mills Direct 20,565

4Sheppard Ave

Highway 401

Lawrence Ave

Finch Ave

Yong

e St

Bayv

iew

Ave

Keel

e St

Steeles Ave

Eglinton Ave

Bath

urst

St

York University

TORONTO

VAUGHAN

Lawrence

Sheppard

Finch

Downsview

Lawrence West

Eglinton West Eglinton

1

3526


SIZE (SF)

4. 336 Sheppard Avenue East $2,125,000 3,300


5. 4800 Yonge Street A 5 120,000 Menkes Developments Planned

6. 4050 Yonge Street A 6 240,000 The Gupta Group Planned


0.0%

1.0%

2.0%

3.0%

4.0%

5.0%

6.0%

7.0%

-250,000

-200,000

-150,000

-100,000

-50,000

0

50,000

100,000

2012

Q4

2013

Q1

2013

Q2

2013

Q3

2013

Q4

2014

Q1

2014

Q2

2014

Q3

2014

Q4

2015

Q1

2015

Q2

2015

Q3

2015

Q4

2016

Q1

2016

Q2

2016

Q3

2016

Q4

2017

1Q

*

2017

2Q

*

2017

3Q

*

2017

4Q

*

0

0.02

0.04

0.06

0.08

0.1

0.12

0.14

0.16

-800,000

-600,000

-400,000

-200,000

0

200,000

400,000

600,000

800,000

1,000,000

2012

Q2

2012

Q3

2012

Q4

2013

Q1

2013

Q2

2013

Q3

2013

Q4

2014

Q1

2014

Q2

2014

Q3

2014

Q4

2015

Q1

2015

Q2

2015

Q3

2015

Q4

2016

Q1

2016

Q2

2016

3Q

*20

16 4

Q*

2017

1Q

*20

17 2

Q*


0

0.02

0.04

0.06

0.08

0.1

0.12

0.14

0.16

-800,000

-600,000

-400,000

-200,000

0

200,000

400,000

600,000

800,000

1,000,000

2012

Q2

2012

Q3

2012

Q4

2013

Q1

2013

Q2

2013

Q3

2013

Q4

2014

Q1

2014

Q2

2014

Q3

2014

Q4

2015

Q1

2015

Q2

2015

Q3

2015

Q4

2016

Q1

2016

Q2

2016

3Q

*20

16 4

Q*

2017

1Q

*20

17 2

Q*


0

0.02

0.04

0.06

0.08

0.1

0.12

0.14

0.16

-800,000

-600,000

-400,000

-200,000

0

200,000

400,000

600,000

800,000

1,000,000

2012

Q2

2012

Q3

2012

Q4

2013

Q1

2013

Q2

2013

Q3

2013

Q4

2014

Q1

2014

Q2

2014

Q3

2014

Q4

2015

Q1

2015

Q2

2015

Q3

2015

Q4

2016

Q1

2016

Q2

2016

3Q

*20

16 4

Q*

2017

1Q

*20

17 2

Q*




GTA NorthThis was a quarter where the GTA North’s rental rates led the entire GTA in several categories. Asking net rent increased by 38 cents from the previous quarter, which was the largest increase. Conversely, average additional rent decreased by 43 cents from the previous quarter, which was the largest decrease. These differences resulted in a relatively stable asking gross rate; this has held true over the last three years, where average gross rates have increased by less than one dollar—one of only two markets to do so (Central East).

Trends > After having the largest amount of negative absorption the

previous quarter, the GTA North experienced the second-largest amount of positive absorption this quarter.

> Blocks of space between 10,000 to 15,000 SF are readily available, but larger blocks of space are becoming increasingly difficult to find.


(SF)

1. Engage People- 1380 Rodick Road 56,000

2.O/A Media Canada Technologies- 2 East Beaver Creek Road

10,792



Net Absorption (156,181) 97,613





6. 2833 16th Avenue 60 9,000,000 Cadillac Fairview Planned

7. 1555 16th Avenue A 7 120,650 Investors Group Planned

8. 60 South Town Centre Boulevard A 14 380,000 1771107 Ontario Inc. Planned


0.0%

1.0%

2.0%

3.0%

4.0%

5.0%

6.0%

7.0%

8.0%

9.0%

10.0%

-200,000

-100,000

0

100,000

200,000

300,000

400,000

2012

Q4

2013

Q1

2013

Q2

2013

Q3

2013

Q4

2014

Q1

2014

Q2

2014

Q3

2014

Q4

2015

Q1

2015

Q2

2015

Q3

2015

Q4

2016

Q1

2016

Q2

2016

Q3

2016

Q4

2017

1Q

*

2017

2Q

*

2017

3Q

*

2017

4Q

*

0

0.02

0.04

0.06

0.08

0.1

0.12

0.14

0.16

-800,000

-600,000

-400,000

-200,000

0

200,000

400,000

600,000

800,000

1,000,000

2012

Q2

2012

Q3

2012

Q4

2013

Q1

2013

Q2

2013

Q3

2013

Q4

2014

Q1

2014

Q2

2014

Q3

2014

Q4

2015

Q1

2015

Q2

2015

Q3

2015

Q4

2016

Q1

2016

Q2

2016

3Q

*20

16 4

Q*

2017

1Q

*20

17 2

Q*


0

0.02

0.04

0.06

0.08

0.1

0.12

0.14

0.16

-800,000

-600,000

-400,000

-200,000

0

200,000

400,000

600,000

800,000

1,000,000

2012

Q2

2012

Q3

2012

Q4

2013

Q1

2013

Q2

2013

Q3

2013

Q4

2014

Q1

2014

Q2

2014

Q3

2014

Q4

2015

Q1

2015

Q2

2015

Q3

2015

Q4

2016

Q1

2016

Q2

2016

3Q

*20

16 4

Q*

2017

1Q

*20

17 2

Q*


0

0.02

0.04

0.06

0.08

0.1

0.12

0.14

0.16

-800,000

-600,000

-400,000

-200,000

0

200,000

400,000

600,000

800,000

1,000,000

2012

Q2

2012

Q3

2012

Q4

2013

Q1

2013

Q2

2013

Q3

2013

Q4

2014

Q1

2014

Q2

2014

Q3

2014

Q4

2015

Q1

2015

Q2

2015

Q3

2015

Q4

2016

Q1

2016

Q2

2016

3Q

*20

16 4

Q*

2017

1Q

*20

17 2

Q*


Newmarket

RichmondHill

King City

7

Highway 407

Aurora RdWellington St

High

way

404

Yong

e St

Stouffville Rd

War

den

Ave

Hig

hway

400

Steeles Ave

King Rd

Hig

hway

27

Davis Dr

VAUGHAN

RICHMOND HILL

AURORA

523

641 8


Notable Sale Transactions ADDRESS PRICE APPROXIMATE

SIZE (SF)

3. 9050 Yonge Street $22,500,000 91,277

4. 25 Centurian Drive $12,400,000 57,400

5. 8001 Weston Road $6,260,850 73,400


Central EastThe Central East had a strong performance this quarter; there was nearly 100,000 square feet of positive absorption – the largest amount in more than a year. As such, vacancy and availability rates both decreased. Moreover, net rent, additional rent, and therefore, gross rent all showed increases—the first time that happened in more than a year. The Central East also had a very good quarter in regards to sales transactions – more than four times the amount of deals than the previous quarter with more than 12 times the total dollar value.

Trends > The Don Mills-Eglinton submarket was the only area that

saw its vacancy rate increase from the previous quarter. Duncan Mill, Consumers Road, and Woodbine-Steeles’ rates all decreased, while the Toronto East’s remained the same.

> New supply remains scarce in the Central East; total inventory of Class A and Class B class buildings has increased by only five percent since 2000.








4. 3377 Steeles Avenue East A 6 280,000 Bentall Real Estate Services Planned

5. 101 Gordon Baker Road A 12 250,000 Osmington Inc. Planned

Notable Sale TransactionsADDRESS PRICE APPROXIMATE SIZE

(SF)

2. 3650 & 3660 Victoria Park Avenue $34,000,000 154,300

3. 15 Gervais Drive $10,350,000 86,000


0.0%

1.0%

2.0%

3.0%

4.0%

5.0%

6.0%

7.0%

8.0%

-200,000

-150,000

-100,000

-50,000

0

50,000

100,000

150,000

2012

Q4

2013

Q1

2013

Q2

2013

Q3

2013

Q4

2014

Q1

2014

Q2

2014

Q3

2014

Q4

2015

Q1

2015

Q2

2015

Q3

2015

Q4

2016

Q1

2016

Q2

2016

Q3

2016

Q4

2017

1Q

*

2017

2Q

*

2017

3Q

*

2017

4Q

*

0

0.02

0.04

0.06

0.08

0.1

0.12

0.14

0.16

-800,000

-600,000

-400,000

-200,000

0

200,000

400,000

600,000

800,000

1,000,000

2012

Q2

2012

Q3

2012

Q4

2013

Q1

2013

Q2

2013

Q3

2013

Q4

2014

Q1

2014

Q2

2014

Q3

2014

Q4

2015

Q1

2015

Q2

2015

Q3

2015

Q4

2016

Q1

2016

Q2

2016

3Q

*20

16 4

Q*

2017

1Q

*20

17 2

Q*


0

0.02

0.04

0.06

0.08

0.1

0.12

0.14

0.16

-800,000

-600,000

-400,000

-200,000

0

200,000

400,000

600,000

800,000

1,000,000

2012

Q2

2012

Q3

2012

Q4

2013

Q1

2013

Q2

2013

Q3

2013

Q4

2014

Q1

2014

Q2

2014

Q3

2014

Q4

2015

Q1

2015

Q2

2015

Q3

2015

Q4

2016

Q1

2016

Q2

2016

3Q

*20

16 4

Q*

2017

1Q

*20

17 2

Q*


0

0.02

0.04

0.06

0.08

0.1

0.12

0.14

0.16

-800,000

-600,000

-400,000

-200,000

0

200,000

400,000

600,000

800,000

1,000,000

2012

Q2

2012

Q3

2012

Q4

2013

Q1

2013

Q2

2013

Q3

2013

Q4

2014

Q1

2014

Q2

2014

Q3

2014

Q4

2015

Q1

2015

Q2

2015

Q3

2015

Q4

2016

Q1

2016

Q2

2016

3Q

*20

16 4

Q*

2017

1Q

*20

17 2

Q*


Highway 407

Eglinton Ave

Finch Ave

Hig

hway

404

Yong

e St

Vict

oria

Par

k Av

e

Kenn

edy

Ave

Sheppard Ave

Steeles Ave

Highway 401

Mar

kham

Rd

Keel

e St3

SCARBOROUGH

TORONTO

Finch

Kennedy

Union

Lake Ontario

3

425

1



(SF)

1.

R.V. Anderson Associates Limited- 2001 Sheppard Avenue East

53,001


GTA EastIn 2000, the GTA East and GTA North each had around 8.5 million square feet of inventory. While these two markets were in similar positions, since then the GTA North has expanded much more rapidly, as its inventory has nearly doubled while the GTA East’s has grown by only 15 percent. Nearly all positive absorption in the GTA East this quarter, almost 40,000 square feet, took place in the Pickering-Oshawa submarket.

Trends > Asking net rental rates in the GTA East are the highest they

have been in nearly four years.

> The vacancy rate in the Scarborough Town Centre submarket (3.4%) is the lowest it has been in more than 15 years.








2. 65 Bayly St West 2 31,500 Medallion Corporation Q2 2017 Under Construction

3. 400 Consilium Place A 12 275,000 (900,000 in 3 towers) Kevric Planned


SIZE (SF)

1. 213 Byron Street South $1,900,000 6,500Historical Performance and Forecast

0.0%

1.0%

2.0%

3.0%

4.0%

5.0%

6.0%

7.0%

-140,000

-120,000

-100,000

-80,000

-60,000

-40,000

-20,000

0

20,000

40,000

60,000

80,000

2012

Q4

2013

Q1

2013

Q2

2013

Q3

2013

Q4

2014

Q1

2014

Q2

2014

Q3

2014

Q4

2015

Q1

2015

Q2

2015

Q3

2015

Q4

2016

Q1

2016

Q2

2016

Q3

2016

Q4

2017

1Q

*

2017

2Q

*

2017

3Q

*

2017

4Q

*

0

0.02

0.04

0.06

0.08

0.1

0.12

0.14

0.16

-800,000

-600,000

-400,000

-200,000

0

200,000

400,000

600,000

800,000

1,000,000

2012

Q2

2012

Q3

2012

Q4

2013

Q1

2013

Q2

2013

Q3

2013

Q4

2014

Q1

2014

Q2

2014

Q3

2014

Q4

2015

Q1

2015

Q2

2015

Q3

2015

Q4

2016

Q1

2016

Q2

2016

3Q

*20

16 4

Q*

2017

1Q

*20

17 2

Q*


0

0.02

0.04

0.06

0.08

0.1

0.12

0.14

0.16

-800,000

-600,000

-400,000

-200,000

0

200,000

400,000

600,000

800,000

1,000,000

2012

Q2

2012

Q3

2012

Q4

2013

Q1

2013

Q2

2013

Q3

2013

Q4

2014

Q1

2014

Q2

2014

Q3

2014

Q4

2015

Q1

2015

Q2

2015

Q3

2015

Q4

2016

Q1

2016

Q2

2016

3Q

*20

16 4

Q*

2017

1Q

*20

17 2

Q*


0

0.02

0.04

0.06

0.08

0.1

0.12

0.14

0.16

-800,000

-600,000

-400,000

-200,000

0

200,000

400,000

600,000

800,000

1,000,000

2012

Q2

2012

Q3

2012

Q4

2013

Q1

2013

Q2

2013

Q3

2013

Q4

2014

Q1

2014

Q2

2014

Q3

2014

Q4

2015

Q1

2015

Q2

2015

Q3

2015

Q4

2016

Q1

2016

Q2

2016

3Q

*20

16 4

Q*

2017

1Q

*20

17 2

Q*


Taunton Rd

Kingston Rd

Highway 407

Broc

k Rd

Harm

ony Rd

Sheppard Ave

Steeles Ave

Highway 401

York

& D

urha

m L

ine

ScarboroughTown Centre

Stouffville

Pickering

Oshawa

Markham

32

TORONTO

OSHAWA

PICKERING

1

Lake Ontario

Highway 401



GTA WestThe GTA West market experienced positive absorption of 188,114 square feet this quarter, the highest in the GTA. Most of it came from the Airport Corporate Centre submarket, specifically 5015 Spectrum Way, where Revera Inc. leased 50,732 square feet and 5150 Spectrum Way- leased by Lowes. The GTA West still has the highest availability rate compared to all other markets at 12.8 percent, but it decreased for the first time in a year. Asking gross rent has increased by over $2 per square foot in the GTA West over the past year and is now more than $30 per square foot.

Trends > Notable sales transactions nearly doubled from 13 in Q3 2016 to 24 with an average price per SF of $384 in the fourth quarter of 2016.

> Similar to the availability rate, the West’s vacancy rate decreased for the first time in more than a year.



Net Absorption 76,453 188,114





9. 1295 North Service Road West A 7 160,000 Bentall Kennedy Planned

10. 610 Chartwell Road A 4 104,000 First Gulf Q1 2017 Under Construction

11. 6875 Financial Drive A 5 125,786 Bentall Kennedy Planned

12. 5400 Explorer Drive A 5 330,000 Polaris Planned

13. 2380 Meadowvale Boulevard A 6 300,000 Sun Life Assurance Planned


SIZE (SF)

4. 1005 Skyview Drive $20,050,000 102,284

5. 4281 Harvester Road $16,175,000 68,000

6. 755 Queensway East $14,400,000 148,431

7. 3107 Bloor Street West $8,250,000 17,016

8. 6245 Mississauga Road $3,950,000 17,620

Notable Lease TransactionsTENANT NAME - ADDRESS TYPE APPROXIMATE

SIZE (SF)

1. Lowe’s- 5150 Spectrum Way 67,000

2. Acorn Stairlifts (Canada) Inc.- 5555 North Service Road Sublease 18,767

3.Her Majesty the Queen In Right of Canada- 135 Queens Plate Drive

Expansion 10,627


0.0%

2.0%

4.0%

6.0%

8.0%

10.0%

12.0%

-800,000

-600,000

-400,000

-200,000

0

200,000

400,000

600,000

2012

Q4

2013

Q1

2013

Q2

2013

Q3

2013

Q4

2014

Q1

2014

Q2

2014

Q3

2014

Q4

2015

Q1

2015

Q2

2015

Q3

2015

Q4

2016

Q1

2016

Q2

2016

Q3

2016

Q4

2017

1Q

*

2017

2Q

*

2017

3Q

*

2017

4Q

*

0

0.02

0.04

0.06

0.08

0.1

0.12

0.14

0.16

-800,000

-600,000

-400,000

-200,000

0

200,000

400,000

600,000

800,000

1,000,000

2012

Q2

2012

Q3

2012

Q4

2013

Q1

2013

Q2

2013

Q3

2013

Q4

2014

Q1

2014

Q2

2014

Q3

2014

Q4

2015

Q1

2015

Q2

2015

Q3

2015

Q4

2016

Q1

2016

Q2

2016

3Q

*20

16 4

Q*

2017

1Q

*20

17 2

Q*


0

0.02

0.04

0.06

0.08

0.1

0.12

0.14

0.16

-800,000

-600,000

-400,000

-200,000

0

200,000

400,000

600,000

800,000

1,000,000

2012

Q2

2012

Q3

2012

Q4

2013

Q1

2013

Q2

2013

Q3

2013

Q4

2014

Q1

2014

Q2

2014

Q3

2014

Q4

2015

Q1

2015

Q2

2015

Q3

2015

Q4

2016

Q1

2016

Q2

2016

3Q

*20

16 4

Q*

2017

1Q

*20

17 2

Q*


0

0.02

0.04

0.06

0.08

0.1

0.12

0.14

0.16

-800,000

-600,000

-400,000

-200,000

0

200,000

400,000

600,000

800,000

1,000,000

2012

Q2

2012

Q3

2012

Q4

2013

Q1

2013

Q2

2013

Q3

2013

Q4

2014

Q1

2014

Q2

2014

Q3

2014

Q4

2015

Q1

2015

Q2

2015

Q3

2015

Q4

2016

Q1

2016

Q2

2016

3Q

*20

16 4

Q*

2017

1Q

*20

17 2

Q*


Kipling

Georgetown

Milton

Lake Ontario

8

9

117

QEW

Highway

407

Highway

403

hwy 427

Highway 10

Highway 401

BRAMPTON

12

10

3

OAKVILLE

MISSISSAUGA

13

5

TORONTO

1

4

62



Glossary

Weighted Average Asking Net Rent: The dollar amount requested by landlords for an available space, expressed as an average based on the weight of available space.

Availability: The total amount of space that is currently being marketed as available for lease or sublease at the end of the quarter. It includes space that is available, regardless of whether the space is vacant or occupied.

Net Absorption: The net absorption in available space in a given market between the current quarter and the previous quarter.

Direct Availability: Space that is being offered for lease directly from the landlord or owner of a building, not space by another tenant in the building trying to sublet a space that has already been leased.

Sublease Availability: Sublet space that is available for sublease by a tenant to another lessee for a term equal to or shorter than that held by the tenant under its original lease with the landlord.

Under Construction: Buildings where actual ground breaking has occurred (site excavation or foundation poured) and construction is ongoing (not abandoned or discontinued) but for which a certificate of occupancy has not yet been issued.

New Supply: Total square footage with completed construction, where all that remains is the installation of tenant finishes.

Days on the Market (DOM): How many days an available industrial property has been on the market for.

GTA Central: Includes East York, Etobicoke, North York, Scarborough, Toronto and York.

GTA East: Includes Ajax, Oshawa, Pickering, and Whitby.

GTA North: Includes Aurora, Markham, Newmarket, Richmond Hill, Vaughan and Whitchurch-Stouffville.

GTA West: Includes Brampton, Burlington, Caledon, Milton, Mississauga and Oakville.

Forecast Assumptions & TerminologyAbsorption was calculated using moving averages of historical absorption data and supplemented with incoming new speculative and build-to-suit developments.

Colliers International has adopted NAIOP’s terms and definitions which is reflected in this glossary and report.

Copyright © 2017 Colliers International.

The information contained herein has been obtained from sources deemed reliable. While every reasonable effort has been made to ensure its accuracy, we cannot guarantee it. No responsibility is assumed for any inaccuracies. Readers are encouraged to consult their professional advisors prior to acting on any of the material contained in this report.

About Colliers International Group Inc.

Colliers International Group Inc. is an industry leading global real estate services company with more than 16,000 skilled professionals operating in 66 countries. With an enterprising culture and significant employee ownership, Colliers professionals provide a full range of services to real estate occupiers, owners and investors worldwide. Services include strategic advice and execution for property sales, leasing and finance; global corporate solutions; property, facility and project management; workplace solutions; appraisal, valuation and tax consulting; customized research; and thought leadership consulting.

Colliers professionals think differently, share great ideas and offer thoughtful and innovative advice that help clients accelerate their success. Colliers has been ranked among the top 100 outsourcing firms by the International Association of Outsourcing Professionals’ Global Outsourcing for 11 consecutive years, more than any other real estate services firm.

colliers.com

554 offices in 66 countries on 6 continentsUnited States: 153 Canada: 34 Latin America: 24 Asia Pacific: 231 EMEA: 112

$2.5billion US* in annual revenue

2.0billion square feet under management

16,000professionals and staff

*Based on 2015 results

MARKET CONTACT:John ArnoldiExecutive Managing Director | Toronto BrokerageDIRECT: +1 (416) 643 3733 [email protected]

REGIONAL AUTHORS:

Shawn GilliganSenior Analyst | Toronto DIRECT: +1 (416) 607 [email protected]

Max Shapinko Market Intelligence Coordinator | Toronto DIRECT: +1 (416) 791 [email protected]

Shay RajaduraiMarket Intelligence Coordinator | Toronto DIRECT: +1 (416) 620 [email protected]

Colliers International | TorontoOne Queen Street East, Suite 2200Toronto, ON | Canada

+1 416 777 2200

Date post:	07-Feb-2017
Category:	Documents
Upload:	andrew-kerr
View:	31 times
Download:	2 times

toronto-office-market-report-q4-2016

Documents