Calgary, the market with the highest office availability rate at 25.3%, experienced a slight decline 0f 0.3% as the influx of interprovincial migrants assisted with its employment base and return-to-office. Additionally, downtown markets across the country are still experiencing higher availability rates than suburban markets.
Despite economic headwinds, the Canadian commercial real estate market continues to evolve from coast to coast. Its three main sectors – industrial, office and retail – have held steady, according to the RE/MAX 2023 Commercial Property Report, which takes a deep dive into current trends and first-quarter performance across 12 markets, from Vancouver to St. John’s, as the landscape evolves post-pandemic. Positive indicators suggest an upswing “may be in the cards for the back half of the year.”
Businesses across Canada have penned an open letter to Treasury Board President Mona Fortier urging her to "lead the way" in bringing employees back to the workplace. The open letter was signed by 32 business associations, including the executives of the Business Council of Canada, Canadian Federation of Independent Business, and the Retail Council of Canada, among others.
The Ottawa-Gatineau area, with its particularly high concentration of federal government employees, has the lowest return-to-office rate of any government capital in Canada, according to the letter.
While many types of work can be done productively from outside the office, “technology can’t replicate the energy, spontaneity, big ideas, true sense of belonging and fun” of being together in person, Royal Bank Chief Executive Officer Dave McKay said in a memo to employees Tuesday.
For the first time in Canadian history, suburban office vacancies have been at a lower level than downtown vacancy rates. Michael Case, head of CBRE’s Downtown Toronto Office leasing team, says despite downtown office demand in Montreal and Toronto still outpacing nearby suburbs, as they typically do, for the rest of Canada, the suburbs are winning out.
Seemingly recovering from the various pressures of the COVID-19 outbreak, office rental rates in downtown Vancouver remained stable amid the impending completion of new supply, according to Avison Young.
Foot traffic is down, and concerns over public safety and vandalism are up in Vancouver’s downtown core two years into a pandemic that has rewritten the rules on remote working.
Office vacancies in Canada were at the highest level in decades this quarter as new supply continued to come onto the market while the fourth wave of COVID-19 slowed an expected return to work, according to the latest report from CBRE Group Inc.
Major Canadian cities saw office vacancies either rise or hold steady from Q1 to Q2 in 2021, except Montreal where the vacancy rate dropped 10 basis points.
Over the past year, the world has changed in many ways – from the need to work remotely to employees asking for more from their employers. Many have asked: is the traditional office dead? Thankfully, our physical office is here to stay. But how will it evolve moving forward?
The rapid shift to remote working has helped raise Canada’s office vacancy rate during the COVID-19 pandemic. According to a February report from CBRE, the national vacancy rate for offices is up by 3.1% since the start of the pandemic. This has sparked questions about the long-term outlook for commercial real estate and the impacts of a changing world of work on other asset classes in Canada, including housing.
Vancouver’s commercial real estate market, particularly its office segment, is well-positioned to capitalize on the economic recovery anticipated to take place during the second half of 2021, according to Avison Young.
As passed, the Act protects commercial tenants with tenancy agreements eligible for the Canada Emergency Commercial Rent Assistance (“CERCA”) program, but whose landlords have chosen not to participate.
Today, Finance Minister Bill Morneau announced that the Canada Emergency Commercial Rent Assistance (CECRA) will be extended by one month to help eligible small business pay rent for August. All provinces and territories continue to participate in this initiative, and collaborate with the federal government to provide rent supports to those small businesses most in need.
The COVID-19 pandemic has led to an increase in sublease office space in major Canadian cities in recent weeks, particularly Vancouver and Toronto.
Flexible offices spaces are projected to reach more than 6.1 million square feet by the end of the year, up about 300 per cent from 2014, according to a report by CBRE Canada. An additional 1.3 million square feet is on the way with the bulk in Toronto, Vancouver and Montreal.
For three years now, the share of profitable coworking spaces has remained at roughly the same level, with 43% of all coworking spaces generating a direct profit from their operation.
The national office vacancy rate tightened by 50 basis points quarter-over-quarter to 11.9 per cent over the period, helped by a growing suburban office market particularly in Calgary and Waterloo, Ont.
Both size and capacity are important data points to consider. In particular, knowing the average sizes of spaces reveals not only how big a space should be to remain competitive in that particular city or country’s coworking market, but also how much space a city or country has to offer new commercial developments.