Yes .... it's that easy
 
As usual, the 'wise sage' of this Forum, Mr Copperpot, has nailed it. With 160 Front, Union Centre, CIBC 1 all being filled by the big users (banks), all of us skyscraper geeks (but we love it!) must settle in for a very long wait until shovels in ground for The Hub or CC3 or any other office development. Vacancy rates may now be filled for a little while. Large developments like this like to have about 70% committed before they push any GO button. City approvals are nice but ultimately mean very little - it's the CORPORATE approval than moves things forward. Planning to conception to reality is a multi-year process. Patience is key my friends.
 
GTA leads North American list of lowest office vacancy rates

A new report indicates that the Greater Toronto Area (GTA) has the lowest office vacancy rate in North America due in large part to a surge in interest from technology companies looking for space. [...] The downside from the influx of tech companies, though, is that the office vacancy rate in the GTA settled at 3.8 per cent in the first quarter of 2019 and, more disturbing, that the downtown market — which is a hotspot for tech start-ups — was even more constrained, reaching a record low of 1.1 per cent.
 
Yes, those stats are signs of an incredibly healthy market and the envy of North America. But if this thread is to discuss possibilities of The Hub or CC3 being green-lighted anytime soon, tech company needs are not going to do it. Tech companies operate in a leaner, more efficient manner, with less people (ie: SPACE) and usually do not gravitate to the type of 'Bay Street' buildings like The Hub or CC3. They choose more creative space in campus-type atmospheres like The Well. A little more, do I dare say it? 'Groovier' space, that is not possible in these traditional skyscrapers as their current designs suggests. There are few available plots of lands anywhere near downtown core that provide this type of setting. So Toronto needs to focus on landing these tech companies while at the same time trying to attract the very few Big Fish that would allow a Big Tall Skyscraper to move forward.
 
The Hub is an Oxford Properties development. CC3 is a Quadreal development. Oxford Properties is a part of OMERS, while Quadreal is part of BC Investment. Both parent firms have very long horizons, and very, very deep pockets. Both organizations can finance their respective development without any pre-leasing commitments, should they so wish.

Given the combination of long planning horizons, and the ability to basically self-finance the projects, it all comes down to the first three rules of real estate: 1: Location, 2. Location, 3 Location. These two locations are absolutely prime in the Toronto downtown office core.

After the 1980's and 1990's, with the migration of office development momentum out to the suburbs, we are now seeing what appears to be a fairly enduring secular trend back into the downtown core - to take advantage of a growing pool of talent with the increasing residential density within easy access to the core. All of this is combined with the increasingly difficult, automobile dependent, commuting issues in the suburbs, accompanied by the ongoing year over year population growth within the Toronto CMA - it is continuing to run between 135,000 and 140,000 a year.

So, unless there are indications that the economy is about to fall off a cliff, it could very well be that either, or even both of these projects could receive approval of their respective Boards to proceed, without necessarily having the level of pre-leasing commitment that a more conventional, privately (or even publicly) owned developer might require. Not saying that this will happen - but that given the locations involved, and the deep pockets of the developers, it may come down more to the prevailing business conditions at the time of the decision, more than any specific level of pre-leasing commitments.
 
This statement that banks != tech companies is really not true anymore, sure it was true say 5+ years ago but is very much not the case anymore (for the most part) banks have heavily modernized and the space per employee is much less - many moving to completely open concept / no assigned seating.
 
taal said:
This statement that banks != tech companies is really not true anymore, sure it was true say 5+ years ago but is very much not the case anymore (for the most part) banks have heavily modernized and the space per employee is much less - many moving to completely open concept / no assigned seating.
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Not that Taal needs this; but I can corroborate his statement.

Scotiabank is one I'm familiar with and they are renovating a vast amount of space to be Flex Space or Agile space is their term of choice.

Walls are movable, work stations are shared or temporary etc. etc.
 
Yeah, I think law / accounting forms are still the exception to a certain degree -> so maybe we want those to take up all the new space in these new builds :)

In terms of the comment about Toronto tech companies not taking up large amounts of space compared to the banks, that is unfortunately, correct !
Note that this is only true downtown, there are many large (usually US) tech companies in the suburbs (predominantly Markham) that have very large sites, but to be honest I don't see these relocating downtown ... ever ... they may open smaller downtown offices.

The shopify deal was probably the largest single use tech company space downtown !

There have been announcements from the likes of Microsoft, but all these are in the 100<->200K range, it's not a bank size 500K+ ... but I mean that shouldn't be a huge surprise as that much space is in the order 5,000+ workers ! We don't really have those type of technology companies here (or ones that are downtown ... IBM has a 3000+ development lab in Markham and that's probably the largest in Canada ?).

Amazon's downtown presence been growing slowly, I suspect it's over the 1000 workers at this point (I believe in at least 2 buildings) would be nice for this to keep growing.


Long way of saying it'll take a lot of said tech companies to move into these towers, but so far that's indeed what's happening i.e. we keep hearing about tech companies opening sites here in Toronto, if there are enough of them, they can of course fill any space.
 
packers67 said:
But if this thread is to discuss possibilities of The Hub or CC3 being green-lighted anytime soon...
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I'm pretty confident The Hub will go ahead shortly after the city zoning is in place. Oxford doesn't really have a choice as they're at risk of losing existing tenants that desperately need some amount of space to expand into. If all they do is shuffle a few existing tenants (zero new ones) into The Hub to free up space for other tenants to expand near their existing space, it's worth it. The Hub is actually a pretty minor addition to Oxford's downtown portfolio; existing clients will eat it up rapidly just as they did the scraps in E&Y tower.

CC3 is a bit different as that single property will be ~30% of Quadreals total floorspace in downtown Toronto. That's a substantial increase.
 
IBM also has their head office in Markham, which is a candidate to move downtown if they want to keep attracting the best talent out of school. Google could also make a bold move.

Beyond the need for office space, becoming the anchor of the Hub is a rare branding opportunity in a city that's quickly becoming known as a global tech hub. A lot of big boys have settled into new/renovated digs recently.. hoping there's a couple more that have been waiting for this all along.
 
These towers will fill no problem, it'll probably take a year or so of marketing, though. It'll be a lot of small companies and tech startups needing space without a doubt, but there are absolutely big players left that could potentially move. I would imagine that there are larger US companies that want to expand in Toronto, such as Amazon or Salesforce. I would also imagine that there are plenty of mid to large-sized Canadian companies that want to expand in/move to Toronto, but it will take a few of those to make up the equivalent of a large tenant.

The largest Canadian companies I can think of that would maybe want to move into these towers are Bell and Rogers. I know their current Toronto offices are pretty dated.
 
sikandar said:
IBM also has their head office in Markham, which is a candidate to move downtown if they want to keep attracting the best talent out of school. Google could also make a bold move.

Beyond the need for office space, becoming the anchor of the Hub is a rare branding opportunity in a city that's quickly becoming known as a global tech hub. A lot of big boys have settled into new/renovated digs recently.. hoping there's a couple more that have been waiting for this all along.
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Google is taking 65 King East, AFAIK, and eventually plans to open in Google City down on the "eastern waterfront".

Oxford, now that they've got another two office towers in the works at Union Park, which they'd like to start construction on in 2023, will want to get shovels n he ground here ASAP, for all the reasons mentioned above, and there' a very good chance that this building will break ground without even a major tenant being announced (although that could still happen too).

42
 
interchange42 said:
Google is taking 65 King East, AFAIK, and eventually plans to open in Google City down on the "eastern waterfront".

Oxford, now that they've got another two office towers in the works at Union Park, which they'd like to start construction on in 2023, will want to get shovels n he ground here ASAP, for all the reasons mentioned above, and there' a very good chance that this building will break ground without even a major tenant being announced (although that could still happen too).

42
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What do you think @Edward Skira; penthouse suite and naming rights; a little splurge............The Skyrise Tower?
 
I really liked the first version of the tower, but this new design does have a certain elegance. It certainly seems to better relate to CC2.
 
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