Average weekly - 51%
Peak Day - Wednesday 62%
Slow Day - Monday & Friday 31%
At the 18th SRRA Forum held last week, experts discussed challenges to the region’s economy that are a direct impact of the pandemic. First, was an enhanced focus on Human Resources and how employers are managing an employee driven marketplace, next was the degree remote work will change the office industry, road congestion and transit on the streets and finally the economic Impact of COVID.
The Forum concluded that most challenges find there roots in pre-COVID trends and that the sustaining impact of COVID is currently overstated.
Toronto, like many other comparable cities, is slowly returning to a new norm where the majority of office work is returning to offices while establishing how much remote work is effective is still a work in progress
Your SRRA Team,
Links to Articles of Interest
U.S. Experts Remain Optimistic on the Future of Office Leasing
Continuing uncertainty of the future of office portfolios is fueled in part by different levels of office occupancy in cities across the U.S. While generally seeing lower office occupancy levels than Asia and Europe (reflecting differences in the length of commutes and smaller residential spaces for the most part), Christian Ulbrich, the CEO of JLL notes that not all U.S. cities are the same. “We are at about 65% pre-pandemic level here in Chicago, which means that it's at the top among cities now.” This is significantly higher than San Francisco and San Jose, he indicated.
Experts Place Low Office Occupancy Levels at Feet of Timid CEOS
A recent Biznow panel dumped on a lack of willpower on the part of CEOs for failing to get their employees back in the office. “CEOs need to get some huevos and tell their employees that they hired them to work 40 hours a week and get back to the office. I think they've been very timid,” one panelist noted.
Rising Construction Costs Playing a Role in TMU Decision to Build Less
In a decision that will need unpacking to fully understand its implications, Toronto Metropolitan University (formerly Ryerson) has elected to drop plans to put a student residence on top of a new life sciences building planned for downtown. The stated reason is a concern about the rising costs of construction and a shift in priorities in favour of more educational space. The result is a drop in height from 44 to 14 storeys! One hopes that the new building will turn out to be more attractive than the rendering.
https://www.blogto.com/real-estate-toronto/2023/06/202-jarvis-street-toronto/
Canary Wharf Buffeted by Winds of Change – Yet Owners Remain Committed
Newspapers love to tell a story of declining fortunes but the ups and downs experienced by Canary Wharf over the years are providing lots of fodder for those keen to link the area’s future with the tarnished legacy of Margaret Thatcher. Moody’s has downgraded debt for Canary Wharf Group (CWG) ahead of mortgage renewals due in 2024 and 2025. The same ratings firm that famously gave credit default swaps a passing grade prior to the 2008 meltdown has applied a “broad brush” to the project according to one critic. “The downgrade reflects the broader market environment and …there is a tendency for people to look at commercial real estate with a “broad brush approach,” says the CEO of CWG. The area has evolved as a genuine mixed-use neighbourhood, with significant residential, retail and institutional investments alongside the higher profile office projects. Also known for its high-quality public realm, Canary Wharf is now accessible by the Elizabeth Line, which dramatically reduces commuting times for thousands. Meanwhile Goldman Sachs Group says, “Sentiment toward owning office assets remains low.”
https://www.telegraph.co.uk/business/2023/06/11/canary-wharf-london-margaret-thatcher-legacy/
Complexities Abound in the Search for the Right Balance for Work Environments
A new UK survey suggests that although the public and private sectors are treating hybrid working conditions very differently, “pre-pandemic work patterns are — very slowly — reasserting themselves.” Government offices are reporting lower attendance levels than large corporations but this sector is also demonstrating an interest in finding creative ways to balance the desire for productivity with flexibility for their staff, with decisions being made to take on new space.
Multiple Surveys Add to Confusion Over Reality for Office Managers
Perhaps one of the challenges facing companies that would prefer to have their employees back in the office is that survey results conflate attitudes to work with opinions about where that work should take place.“According to Gallup, 79% of the global workforce is not engaged at work.” The threat of a downtown affecting tech workers is mixed in with attitudes expressed by those working in sectors where staffers feel they still have edge because their talents are in demand and hard to replace. “It is important to pay attention and make sure you create an environment where remote workers feel respected, encouraged and listened to in order for them to develop professionally as well as have a good work-life balance,” conclude’s yet another survey.
Blast from the Past? Amazon Statements Echo Sentiments Rarely Heard in 2023
The executive who led Amazon’s real estate journey over the past five years claims that employees are “enthusiastic” about moving into the firm’s newly built headquarters in Alexandrea. The opening of a million square foot Class A office complex is a rare event but Holly Sullivan is bullish on the future of Amazon’s plans, saying that phase two of the project could begin as soon as 2024.
The Push to Convert Office to Residential Becomes an Election Issue in Toronto
Although not at the top of the list of priorities during election debates, at least one candidate has committed to weaken the current requirement to replace office space when conversions are planned. “As it stands, office space in downtown Toronto neighbourhoods must be replaced if it is removed, creating a major barrier for such projects to move ahead in Canada’s largest city,” the article explains. Hullmark is one of several developers keen to press ahead with conversions. An architect with Gensler, a firm that specializes in conversions, admits “Despite growing interest in making it work, the process is not without challenges, he said, and not all office buildings are good candidates.”
And Finally…Toronto’s Mayoralty Race Earns the City a Raspberry on Bloomberg
Not the kind of publicity an ambitious city like Toronto craves….we survived a dip in our international reputation when a previous mayor’s name became associated with drug use….but as this article points out, the stakes have changed.
“The Occupancy Index is supported by the City of Toronto, Financial District BIA, Bloor-Yorkville BIA, The Waterfront BIA, Downtown Yonge BIA, St Lawrence Market BIA and Toronto Entertainment District 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],”