Increased office vacancies offer chance for growing companies to expand
A number of growing companies are searching for new offices even as the pandemic has forced closures and downsizing elsewhere.
When COVID-19 began spreading across Canada, the newly formed Broken Heart Love Affair creative agency had set up in a Toronto lightbulb plant-turned office building originally built in 1908.
Now celebrating its first anniversary, the agency is seizing a chance to to leave behind the exposed brick walls and industrial-style ceilings staff fell in love with — not because they’re working remotely, but because the time is right to lock in a deal.
“Frankly, we’ve outgrown it already, so we actually need to find more space, but we are looking at the right time,” said Beverley Hammond, a partner and chief business officer at the agency, which is hiring so much that it’s run out of room.
A number of growing companies are searching for new offices even as the pandemic has forced closures and downsizing elsewhere.
Some businesses are shifting to larger offices months or years before they anticipate outgrowing their current locations. Simply because market conditions are so favourable. With more commercial space available, prospective tenants have gained negotiating power.
“There are a lot of companies right now that are accelerating through this challenge,” said Jon Ramscar, Toronto downtown managing director for commercial real estate company CBRE.
The national office vacancy rate climbed to 13.4 per cent in the fourth quarter of 2020, CBRE reported. That’s the country’s highest available amount office space since 2004.
That grew to 14.6 per cent for the first quarter of 2021, up from 10.3 per cent at the same time last year, which covers the period before the worst of pandemic’s economic effects hit.
Some cities appear to be coping: vacancy rates in Vancouver, Waterloo and Ottawa rates were as low as 6.3, 9.3 and 9.6 per cent respectively for the first quarter. But in Alberta, where the devastated oil industry combined with the broader downturn, more than one in four Calgary offices and one in five Edmonton properties remain vacant.
Toronto’s 12.4 vacancy rate is double what it was a year ago — and up from 10.9 per cent last quarter.
