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Thursday, December 1, 2011

Game Changer

by Martin Dockrill

Healthcare of Ontario Pension Plan (HOOPP) recently announced that they have acquired 33 acres in one of Canada’s landmark business parks, Airport Corporate Centre (ACC), in Mississauga. HOOPP plans to construct up to 1.1 million square feet (msf) of office space and more than 70,000 square feet (sf) of restaurant/service amenities. The site is south of Pearson International Airport and adjacent to the new Spectrum Station, which will form part of the Mississauga MiWay Bus Rapid Transit (BRT) line. (The BRT is a high-efficiency east-west transit corridor that is being constructed across Mississauga and is part of a 100-kilometre BRT corridor connecting municipalities from Oakville to Pickering, Ontario.)

One of the things my colleagues and I have noticed over the past couple of months is, despite the negative press and dire economic news revolving around the Eurozone and the United States, the office market in the Greater Toronto Area is starting to witness a distinct elevation in activity. While attending the Toronto Real Estate Forum yesterday I was interested to hear that a number of others have witnessed this same trend across Canada.

Some of the information I took away from the Real Estate Forum is that as we move forward into 2012 rental rate growth in the Canadian office market is expected, and that tenants throughout major markets in Canada should expect to see decreasing vacancy. With increased activity tenants may start to experience "Sticker Shock" as they are faced with higher than expected rates in an environment bombarded by negative media commentary on the global economy.

More significantly, because economics will support new development and the retrofit of existing product tenants will be given the choice between second generation office product and new energy efficient product that can elevate their brand and attract employees. One speaker at the Forum commented that he believed mixed use developments that combine residential, retail and office with easy access to transit would thrive.

Given the above, HOOPP's new development, which emphasizes the "urban" in suburban by mixing high-efficiency transit, retail and energy-efficient office development may turn out to be a "game changer" providing tenants in Mississauga with a high performance work place that is in short supply together with a suburban address that need not necessarily be surrounded by a sea of parking.

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