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Tuesday, August 29, 2017

Evolving trends and varying fundamentals challenge stakeholders to adapt

By Bill Argeropoulos (Toronto)

Trends prevalent in 2016 continued to play out in the first half of 2017 – and will likely shape Canada’s office market in the foreseeable future as the sector adjusts to the changing dynamics.

Evolving trends and varying fundamentals are challenging stakeholders to adapt more now than ever before – not just in Canada, but globally. On the Canadian front, the prevailing trends include urban intensification, transit-oriented development, consolidation, workplace design and millennials’ live-work-play preferences.

Though demand from traditional sectors has been patchy, technology and the co-working craze are transforming the marketplace, garnering an increasing share of the leasing pie. Co-working space providers have expanded rapidly due to the need to cater to startups, entrepreneurs and the increasing demand for affordable workplaces on flexible lease terms. Notably, U.S.-based WeWork has leased big blocks of space in Vancouver and Toronto after opening its first Canadian location in Montreal in 2016. Meanwhile, e-commerce is another ubiquitous driver, prompting firms such as Amazon (in Toronto) and home-grown Shopify (in Toronto and Ottawa) to grow their real estate footprints.

Traditionally having occupied funky, older premises or brick-and-beam product on the fringes of major urban cores, this sector is now seeking a larger presence in major towers, primarily in the country’s downtown markets. These trends will challenge owners and occupiers to adapt to evolving circumstances and varying fundamentals in markets from coast to coast.

Notable Mid-Year 2017 Canadian Office Market Highlights.... https://avisonyoung.uberflip.com/i/861690-aymid17namericaeuropeofficemktreportaug16-17final

(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.)

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