Average weekly - 62%
Peak Day - Wednesday 72%
Low Day - Friday 38%
We are a few weeks away from the 4th Anniversary of the day work from anywhere except the office began. We are planning a special edition of the Index for March 1st. Expect the following highlights in the “Anniversary Index”:
· Positive news about the future of the office building industry.
· A breakdown of leaders in the return to the office.
· Challenges facing congestion and increasing transit use.
As for the data in this week’s Index, there are some notable trends:
· Some institutional plateauing has occurred below the Index.
· More return mandates include obligations to work at least Monday or Friday.
· Employers see the Index at 70% by the summer.
For those who holiday around March Break enjoy the break.
Your SRRA team.
Links to Articles of Interest
Hybrid Work Said to be Feeding Office Vacancies - Colliers
Citing a new report from Colliers Canada that links rising office vacancies to hybrid work, Colliers suggests that only well-located buildings on transit with lots of amenities can persuade hold-outs to spend more time in the office. This article also poses a fundamental question: ‘What do workers want?’ Presumably, continued employment is a given.
You Are Not Imagining This! A Massive New Office Tower Under Construction Adjacent to Union Station!
This is not an early April fool…As this article explains, when completed the second tower of CIBC Square will rise to 50 storeys, making it the tallest office building under construction in the country…that’s right. It isn’t a condo! Ironically one of the joint venture partners is Ivanhoé Cambridge, a subsidiary of the Caisse, which has been busily trimming its office portfolio. (see next article) Pinnacle’s SkyTower project will top out at 105 storeys.
Caisse CEO Offers a Bleak View of Office Real Estate
Terms like ‘office bloodbath’ attract attention, but the CEO’s negative take on the office market (including selling off much of its Ivanhoé Cambridge portfolio) is nothing compared to troubles linked to the organization’s rail-based projects, with subsidiary Alstom having to issue public apologies for ‘service interruptions’ on its new Light Rail project in Montreal.
Shades of the ‘Search for the Holy Grail’ – WeWork Finds New Ways to Survive
Like the knight who challenges his attacker to do his worst while steadily losing limbs, WeWork has managed to persuade landlords in New York and Boston to modify office leases.
Gloomy Headline Belies Underlying Hopeful CBRE Messages Re Office Leasing
Despite the negative tone of this headline, a careful reading of the article reveals that CBRE and others see hopeful signs for downtown Toronto office lease rates. No major projects underway so vacancies bound to return to more normal levels.
StatsCan Reports Ontario Losing Younger Population to Other Jurisdictions
Faced with rising costs of living, Ontario’s youth is pulling up stakes for greener pastures. StatsCan says that Alberta the only Canadian province to gain from net migration patterns.
Citadel Hedge Fund to ‘Lean In’ to Working in the Office
“We can be more productive at home, but innovation happens in the office and I think that's the difference,” says newly appointed ‘workplace officer.’ Speaking at a real estate conference, Paul Darrah dismissed trend to ‘doomsday scenarios’ for the office market, saying his company to launch major new office towers in Boston and Miami.
Paying Attention to the Data is Key – JLL Reports that High Vacancies in a Small Number of Buildings Are Weighing Down Averages
Headlines in New York frequently cite record high vacancy rates but JLL suggests that the numbers can be misleading. A small pool of underperforming office buildings is bearing the brunt of lost occupancy and dragging down absorption data, JLL reports.
New York and Miami Leading Higher Numbers Returning to the Office
Using cell-phone data (not as accurate as SRRA’s methodology), Placer.ai reports higher February numbers year over year in U.S. cities with a focus on financial services but still shy of pre-COVID numbers.
Canada’s Tax Man Paying Attention to Your Work Habits
After granting tax concessions that allowed remote workers to claim home office expenses during the pandemic, the CRA is now ruling that “Employees must have worked remotely more than 50 per cent of the time to be eligible for the deduction,” the Globe reports. Curiously, repainting your space is a valid expense but claiming for an ergonomic chair isn’t. Someone should point this out to Health Canada.
“The Occupancy Index is supported by the City of Toronto, Downtown Yonge BIA, and Downtown West BIA. It is a measure of the percentage of office employees returning to the office compared to the number of employees who would normally have come to their offices pre-COVID. For a detailed description of the calculation please contact Iain Dobson at [email protected],”