Market Insights Q1 2020

Market Insights Q1 2020

Q1 Market Update 2020 GTA West

GTA WEST

MARKET AT A GLANCE

At the beginning of this quarter the GTA West Office Market was riding a positive wave of momentum in Q1 2020. Tour velocity was high across all market nodes with a good mix of both large and small tenants. Groups such as Pepsi, Infosys, Guidewire and Boehringer are all examples of tenants over 40,000 SF that were actively looking for office space. Interest was also seen from the co-working industry looking to expand into the suburbs as newcomers such as Venture-X and Zemlar Offices were very active. The positive velocity and recently announced lease transactions (McKesson/PetSmart etc.) continued to push the GTA West into a Landlord’s market. 

Q1 GTA West Office Market Chart

The sudden arrival of the COVID-19 pandemic at the end of Q1 2020 into Q2 2020 has brought the GTA West leasing market to a halt. It is still too early to predict the full effects of the COVID-19 pandemic moving forward however, it is possible that there will be an increase in the amount of sublease space available in the next few months, placing pressure on Landlords from an asking Net Rent perspective.

The biggest challenge will inevitably be in finding a balance for the Landlord community to prepare buildings for employees to return to work. The entire Chris & Adam team has been following changes to the market very closely and will continue to do so to ensure that you are equipped with timely insights and the knowledge necessary to move forward in your business decisions as the GTA West Office market continues to evolve.

Recent Lease Transactions Q1 2020 GTA West
Rent Relief Tips GTA West

IMPACTS OF COVID-19 ON THE GTA WEST MARKET

Uncertainty due to COVID-19 has made it difficult to predict the future of the GTA West Market, however, our team has maintained close relationships with Landlords to be able to provide you with a unique offering of knowledge and insights on the current market trends. 

Key Questions for Landlords for Building Tours
Model Suites GTA West

MODEL SUITES

Before COVID-19 we noticed a trend (in certain sub-markets) that there is a lack of move-in ready space. With construction on hold during COVID-19 we see this trend of lack of quality model suites continuing. The Landlords with move-in ready model suite space are at an advantage for leasing out their available office space.

How to build a model suite? Check out Carttera’s 1919 Minnesota Court’s model suite virtual tour here. At the time of planning there were zero model suites in the 4,000-6,000 SF range in Class A buildings in Meadowvale.

 

LEVERAGING PROPTECH

With a limited velocity for tours during the COVID-19 pandemic we see an opportunity to leverage PropTech to continue to market available space. We see Walkthruit as a good platform to use to show an animated virtual tour of how space can look beyond its current state. Walkthruit can even tailor leaseholds to the building standard and incorporate realistic views. Here’s an example of a planned model suite we used Walkthruit for at Nicola Wealth’s 25 Watline Avenue.

 

Leveraging PropTech
How Can We Help?
Toronto West Landlord Advisory Team

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Market Insights Q1 2020

Staying Connected

Staying connected

We have been working from home for the last two weeks. It was challenging at first to change our routine and adjust to not seeing our teammates and clients in-person regularly. Embracing Colliers work from home tips we have adapted to our new home offices and learned how to efficiently stay connected while working remotely. Here are five ways we are staying open for business in the time of covid-19.

Keep Conversations Going.

Colliers is an International company which means we frequently communicate with our teammates across the country and border. We are set up and proficient with video conference and collaboration tools.

We use Zoom for large scale conference calls and webinars. Zoom allows for over 400 people to be present on the call which means that our teams across Canada can join and stay up-to-date with the latest market information. 

We have been using Microsoft Teams for our day to day information sharing and project management. With live editing and integrated apps this has been a great way for us to stay organized.

Lastly, Colliers has been using Skype for our daily chats, calls and teams meetings for quite some time now. Skype allows us to collaborate with clients and colleagues to find new and innovative ways to promote properties and provide insights. Give us a call on Skype today and lets talk about what we can do for you!

VTS Reporting.

Have you started using VTS? Many of the landlords we work with have adapted this technology as a means of streamlining the leasing and asset management process. Our team has made VTS reporting a priority leveraging real-time deal and portfolio analytics, and nurturing tenant relationships.

All team members are able to stay in the know and monitor every opportunity from the second a prospect enters your pipeline. We log requirements, track tours, comment to colleagues and compare deal financials side by side so money is never left on the table.  

Create a Virtual Signature.

Colliers embraced Docusign one year ago as a way to help reduce our companies paper waste.  By embracing e-signatures we are able to email documents for instant signature and return. The program is more secure than paper. All documents are encrypted and a complete audit trail is maintained.

Embracing Proptech.

Proptech offers efficiency, transparency and helps to shift the focus towards a customer-centric model. A core differentiation for us at Colliers International has been embracing new technology developments in commercial real estate and applying them to our properties to help create a memorable tour experience.

We shared with you our experience with utilizing Walkthruit and Matterport virtual tours last week. Virtual tours are a brilliant solution to providing brokers and tenants with a realistic initial viewing of the space.  We have tried out two companies, Walkthruit and Matterport, they have both helped to improve our efficiency and transparency with showcasing spaces. Read the full article here.

Social Media.

There is no better time to learn how to leverage social media to digitally advertise, make virtual connections and collaborate with like-minded people than the present. Social media is first and foremost about SOCIALIZING, something we have all been craving for the last few weeks. Give it a try, you have nothing to lose! These platforms are free to set up, there are many groups, lessons, and articles to read and engage with. 

Our team has been focusing on social media as a key tool for growing our business in 2020. We would love for you to follow us on Instagram, Facebook, LinkedIn, and Twitter.

If you have any questions about setting up a platform and best practices, our team marketing specialist Katelyn would be happy to help! 

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Embracing Proptech

Embracing Proptech

Embracing Proptech

How do you provide a better service and set yourself apart from the competition? Technology in property, or ‘proptech’ is a vital development for the commercial real estate industry. Proptech offers efficiency, transparency and helps to shift the focus towards a customer-centric model. A core differentiation for us has been embracing new technology developments in commercial real estate and applying them to our properties to help create a memorable tour experience. In particular, we would like to share with you our experience with utilizing virtual tours.

Remote Tours Save Time.

Time is all we have in commercial real estate. When we arrange a tour, we ask important questions to ensure that the space is the right size, location and has the amenities that the tenant is looking for. We make sure to ask that the potential client meets all of the requirements that the landlord is looking for before bringing them into the space. We don’t want to waste anyone’s time by showing them a space that can’t become a reality.

However, tenants that seem like the perfect fit can still walk into a suite and feel the space isn’t what they are looking for.  Maybe the photos made the space look larger then it is or they are having trouble imagining their business functioning in the current layout.

Suite 505 at Dundas Kipling Centre. Matterport has captured the view of the almost complete renovations at Kipling Station.

Virtual tours are a brilliant solution to providing brokers and tenants with a realistic initial viewing of the space.  We have tried out two companies, Walkthruit and Matterport, they have both helped to improve our efficiency and transparency with showcasing spaces.

Suite 402 at Burlington’s Premier Office complex, Burloak Towers. Unit available at 5575 North Service Road.

Take a Walkthruit.

Take a walk through an existing space or in this case a proposed model suite. Not everyone has the ability to see an empty room and understand how their business would function within it. Where would we put the printer? How many desks could we comfortably have? What would that look like?

3D renderings allow you to visualize an office in a realistic way. The flooring, paint, furniture and lighting is customized to the building specifications. When a client can experience exactly what their finished space will look like before it’s built, faster leasing decisions are made.

 

 

Model Suite rendering at Watline Corporate Centre

At Nicola Wealth’s Watline Corporate Centre in Mississauga you can take a walk through the proposed model suite for Suite 402. Enter in the lobby, imagining your logo on the front of your reception desk. Stroll through the offices newly carpeted built-out space and past the sliding glass doors of the boardroom. Take a peak inside and admire the view of Hurontario street. Imagine your employees collaborating and hard at work in this bright and beautiful open office space. Walk past the open office space and out onto one of the multiple patios that this unit has to offer.

With Walkthruit, you can see a realistic rendering before arriving at the property or showcase the potential of the space to touring tenants while you are there.

White boxed space at Slate 427 community, 401 The West Mall, Suite 300.

Discover Matterport.

This powerful 3D camera takes multiple photos of the space, digitizes the images into a seamless rendering and allows you to view the space from multiple angles. You can also view the renderings in a few different ways including the dollhouse, floor-plan and inside view.

The ‘dollhouse view’ is where our videos start. Look at the space as a whole from an aerial view to get an idea of the overall layout and spacing.

When you hit the ‘floor-plan view’ camera will be centered above the unit and you will view the floor-plan with the added lighting and textures of the space.

Click to jump into the ‘inside view’ and walk about the floor-plan. Click on any circle on the space to see a 360 degree view from the spot.

Need to measure a wall? No problem, the Matterport measurement tool allows you to mark up a space and measure walls, furniture and anything else you may need!

 

 

Solving Key Problems.

What problem are you trying to solve? There are many tools available to help us improve our customers experience – it’s all about finding the right solution. Our newest property, Centennial Centre, had a very unique problem that Matterport has helped us solve. With a spread out complex of 8 buildings, the amazing amenities provided by Crown Realty Partners were left undiscovered. We captured a 3D rendering of the Exclusive Tenant Lounge to not only showcase to new potential tenants but to remind current tenants who haven’t had the chance to see how functional the space is and the improvements that were added in the recent renovation.

Exclusive Tenant Lounge at Centennial Centre. Includes small, medium and large meeting areas, tv’s and lounge areas.

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What Makes Us Different

What Makes Us Different

What makes us different

Benefit from our best-in-class marketing capabilities that generate maximum exposure for your property.  Our proprietary database identifies highly qualified buyers and our extensive industry relationships will connect you with the top real estate decision-makers to derive maximum value for your asset.

01

Customer Relationship Management (CRM)

 

Colliers Canada boasts the best Customer Relationship Management Database in the industry.  This is not just a fancy contact list, this is a game-changing piece of technology that increases leads, closes more deals – faster, and drives customer loyalty and satisfaction.  Colliers Canada is committed to exceeding clients’ expectations.

02

#1 Ranked Marketing Team

 

In 2016, Colliers International Canada was recognized by the International Property Awards, both on a regional and international level as the. “Best Marketing Team in Canada” and “Best Marketing Team Internationally”.

03

Listing Featured On #1 Website

 

Listing with Chris and Adam means your property will get Featured Listing status on Colliers International #1 ranked website. The Colliers International website generates the most traffic and leads for properties in Canada.

04

Net Promoter Score

 

Colliers is only commercial brokerage to use a 3rd party verification system that checks in with all clients to ensure you are receiving the best care. Chris and Adam have a score of 100 for client satisfaction.

05

Our Team

 

We respect your time. We show up. We are prepared. We follow up. We go the extra mile.  Each team member has dedicated roles and responsibilities to see to it that each and every aspect of the process is executed flawlessly. Making it seamless and ensuring our clients’ success.

"Because they are knowledgeable and very professional. They know their business well and provide us with very good insights."

First Gulf

"I think good communication, proactiveness and creativity. Basically delivering; they had a clear and precise strategy and they delivered it."

Manulife

"I like the full service offering that they give us. They’re very hardworking."

Slate Properties

"They are very professional and they get the results that we need. We have been doing business with them for many years and they have always been good to deal with."

Cooper Construction

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Market Update Summary – Q4

Market Update Summary – Q4

Q4 2019 MARKET INSIGHTS REPORT

Thanks for checking out our quarterly market update summary. This report includes team news and insights on the Meadowvale and Airport Corporate Centre office space for Q4 2019.

Find out what is new to the market, under construction, which tenants are on the move and what’s new with our team by signing up for our quarterly newsletter!

 

Team News

GROWING WITH YOU IN MIND

Join us in welcoming a new member to the Chris and Adam team!

Katelyn joined us in January as our Client Experience Specialist. Her focus has been on creating and maintaining our social media, websites and marketing collateral. This will help us provide our clients with a quick turn-around on professionally designed marketing materials.

Her first task, collaborate with the team to provide quarterly market updates for the GTA West office market. We have taken the time to reflect on the market and compile our expert knowledge and predictions to help landlords stay in the know.

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Meadowvale

MARKET AT A GLANCE

Meadowvale has seen a surge in activity throughout Q4 2019 and we expect it to continue through Q1 2020. We saw Innovapost absorb 20,000 SF at 2727 Meadowpine and MDA are rumored to be close to finalizing a deal for 140,000 SF design-build in Meadowvale. Class A vacancy is sitting at 10.7% as of Q4 2019, but it’s our teams prediction that by the end of Q1 2020, the vacancy rate could drop below 9% and by the end of the year be sitting at around 7%, if not lower.

 Taking an in-depth analysis of the statistics suggests that when removing two large blocks of office space (2300 Meadowvale and 2455 Meadowpine), the vacancy rates would drop significantly and Meadowvale would truly be a Landlord market. Is it time to increase Net Rents maybe?

Airport City Centre

MARKET AT A GLANCE

The Airport Corporate Centre office leasing market has seen a surge in activity in 2019 with several large contiguous blocks and large subleases being absorbed. Baylis Medical has purchased 5825 Explorer absorbing 100k of sublease space being marketed, Maersk, Medline, and Metro each absorbed 20k+ blocks of available space within 5150 Spectrum Way.

Our prediction is the ACC’s Net Rents will continue to rise towards $20.00 for Class A office product but the vacancy will remain stable until 2021, especially with the introduction of two new buildings to the market; 5050 Satelitte Drive (130k SF), and 2095 Matheson Blvd. (60k SF). Further there has been a wave of activity
in the disposition of office buildings in the ACC. Four (4) buildings were purchased in Q4 2019. Indications  suggest similar levels of activity to come in 2020.

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Common Tenant Mistakes

Common Tenant Mistakes

Avoid these Common Tenant Mistakes to  make your lease work harder for you.

Office space is more than a box where you do business.  An office lease is often the second-greatest expenditure for a business after payroll.  Make sure your office lease is more than a cost centre but a competitive advantage by avoiding these common tenant mistakes:

1. Procrastination

The #1 most common mistake is starting the lease renewal or relocation process too late.  Don’t put off searching for new office space until the last minute.

For tenants with space under 10,000 square feet, Industry wisdom says that tenants should start searching a minimum of 6-12 months ahead of time. It could take at least that long to search for the right property, perform due diligence and draft and negotiate the lease. If the space needs remodeling or construction to fit your business needs, it can stretch to 12 months or more.

For office space needs over 10,000 square feet, businesses should be looking 12-18 months ahead of the lease expiring. Office space options could be paltry with a short searching window, and waiting too long could result in settling for the best that is available, rather than finding the best possible fit.

Even for tenants that are aware of how long the process takes, it can still be a challenge to make something a priority that is so far in the distance compared to the fires that need to be put out on a daily basis.

2. Not assessing long-term priorities.

Look beyond the immediate needs of the business and factor in long-term needs such as obtaining lease terms that allow the company to expand, downsize or relocate as circumstances dictate.  Review your lease for these terms to ensure the future of your business.

  •  Expansion Rights
  • Cancellation Rights (Termination Right)
  • Extension Rights
  • Sublet Rights

This is also a great time to define the company image, the budget, type of workspace (private offices v. open-concept) and the amount of space required.  An architect will develop a space plan that considers layout, growth forecasts, and floor load capacity.  Don’t be stuck with expensive empty space or unhappy over-crowded employees.  Take the time now to assess long-term company priorities.

3. Inadequate representation.

A landlord’s core business is commercial real estate; yours is making widgets.  Therefore it can be assumed that the landlord has the edge on crafting leases that benefit their bottom line.  Don’t show up without representation.  An experienced and specialized Tenant Representation Broker is invaluable for finding the right property, negotiating a fair lease, providing market data and ensuring an optimal office location is selected for you. Brokers not only save the tenant time and money, but create leverage and help you use it effectively to negotiate the best rates, terms and incentives.

Business owners will not be aware of all the office space location options without using a Tenant Representation Broker.   An experienced Broker Team like Chris and Adam have a database of every property on the market, an extensive network, and know of options which are not yet vacant or even on the market.

Best practice dictates that you keep your Tenant Representation Broker involved in expansions, contractions, renewals and extensions that occur so they can ensure informed decisions are made and no opportunities for optimization are lost.

4. Paying too much rent.

Do your homework.  Companies and/or Tenants that do not obtain accurate and current market research may pay too high a rental rate. Landlord flexibility changes constantly depending upon many factors including current occupancy rates in the building and competitors nearby, length of lease, tenant’s use, parking requirements, financial strength of tenant, etc.

Negotiations are especially important with lease renewals, since Landlords are most competitive when the space is placed on the open market.

5. Bottom line over location attributes.

The value of office space to a business is more than its rate per rentable square foot. As with all real estate it comes down to location, location, location.  Location of clients, location of resources and location of employees.

A budget is always important, and you should never enter into a lease that’s unaffordable.  However, an office building reflects the company image and stands to impress clients and help recruit and retain employees.  Location is paramount–it can be the property’s biggest plus or biggest minus. Location effects employees commutes and talent acquisitions. Amenities should be considered as well, since happy employees are productive employees and never underestimate the power of natural light on worker productivity.

Finally, be proactive and plan ahead, be clear about objectives, do your research, pay attention to the details and get a team of experts on your side.  Once it’s over you can go back to business as usual confident in a good lease and great office space.

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