By
Bill Argeropoulos (Toronto)
In 2012, Avison Young became the first – and
only – commercial real estate brokerage firm to relocate its offices to
Toronto’s burgeoning Downtown South node.
Since then, from front-row seats, our
global headquarters employees have watched an unprecedented period of development
unfold. Of the 10-million-plus square feet of office space that has been
delivered in Downtown Toronto since 2009, and continues to be built, nearly
half is located south of the railway tracks.
I witnessed the launch of this story’s next
chapter on the morning of May 17, when members of Cadillac Fairview (CF) and
Ontario Pension Board (OPB) officially broke ground on their latest project, 16
York Street. (Avison Young’s headquarters is located across the street in
PwC Tower, part of the Southcore Financial Centre.) With 32 storeys and 879,000
square feet, 16 York will complete the final corner at the intersection of York
Street and Bremner Boulevard – culminating the redevelopment of four sites that,
only a decade ago, were gravel parking lots.
I’ve seen a few development cycles in my 29
years of following the Toronto commercial real estate market, but nothing like
the one that started in Downtown South in 2006 with the announcement of a new
tower to be built for Telus by Menkes Developments. Ever since, I have seen an
ongoing roster of organizations make the move to Downtown South – including
many so-called traditional firms previously housed only in the confines of the Financial
Core, such as PwC, CI Investments, RBC, RSA, Marsh & McLennan and, more
recently, Sun Life and HOOPP. These organizations are now rubbing shoulders
with tech giants such as Amazon, Apple, Cisco Systems and Salesforce, with
others expected to follow suit.
The 16 York project demonstrates the faith
that the Downtown South market (increasingly referred to as the South Core) has
generated among developers. Both CF and OPB elected to commence construction before
securing a lead tenant, giving the node a strong vote of confidence.
From our Avison Young headquarters vantage
point, we can also watch the construction of Ivanhoé Cambridge and Hines’ massive
2.9-million-square-foot Bay Park Centre development, which is following on the
heels of 16 York. Home to CIBC’s new headquarters of up to 1.75 million square
feet, Bay Park Centre will straddle the railway tracks, bridging the Financial
Core and Downtown South office nodes.
Given all of this activity, only a handful
of remaining sites can accommodate future downtown office development, which
the market will be watching closely as we work our way through this cycle. Once
these sites are fully utilized, the natural progression will be to push
development eastward along the waterfront. Stay tuned for further updates and
announcements as the ongoing development wave carries us into the next decade.
(Bill
Argeropoulos is an Avison Young Principal and the firm’s Practice Leader,
Research (Canada). He is based in the company’s global headquarters in
Toronto.)
