Toronto West Office Market Report - Avison Young

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The Toronto West office market, while enjoying healthy gains in ... Elsewhere, Community Care Access Centre renewed its
3 RD QUARTER 2014

Toronto West Office Market Report Partnership. Performance.

Market Overview The Toronto West office market, while enjoying healthy gains in certain nodes—notably Mississauga City Centre, the Highway 427 Corridor, and the Airport Corporate Centre (ACC)—has struggled in recent months, resulting in occupancy levels falling 314,000 square feet (sf), collectively. The total amount of available office space across the region continues to grow, albeit slowly, finishing the third quarter of 2014 at 16.6%—up from 16.1% last quarter. Vacancy also rose during the quarter, escalating 70 basis points to 14.4% as the market continued to experience an imbalance between supply and demand. Apart from downtownToronto,TorontoWest is the most active development market in the Greater Toronto Area, with just over 1.5 million square feet (msf) under construction. The numbers reflect the continuing growth of nodes such as the ACC, Oakville and Meadowvale, with the latter boasting more than 260,000 sf of development underway, spread out across three projects: 2455 Meadowpine Boulevard (114,000 sf); First Meadowvale Centre—Phase III (100,000 sf); and 7080 Derrycrest Drive (47,000 sf). The project on Meadowpine Boulevard, a redevelopment of an existing building, is slated for completion by the spring of 2015, while construction teams at the First Meadowvale Centre—a speculative build targeting LEED Gold certification and gaining market interest—have just broken ground and are expected to have the shell up by July 2015. Canon Canada’s headquarters at 8000 Airport Road (190,000 sf) broke ground in early May, while Target and Pepsi are already in new product in the ACC, demonstrating the confidence that large, multinational companies have in Toronto West as a viable location option for commanding their operations in Canada. Despite lingering double-digit availability and vacancy, transaction volumes remain steady in both the existing stock and new developments. Rolling over from the second quarter, MMM Group preleased 55,000 sf in First Gulf’s development at 514 South Service Road East in Oakville, a site which had previously been home to an aged industrial building. The project consists of demolishing the existing facility and erecting a multilevel office space totaling 105,000 sf, and is due to be completed by summer of 2016. Similarly, Schaeffler Technologies has preleased 14,000 sf at 1375 North Service Road East in Oakville, the site of the second phase of Carttera Properties’ Joshua Creek Corporate Centre project which, when completed, will consist of 150,000 sf of LEED Silver flex office space with prime QEW exposure and excellent proximity to the future Oakwoods Centre and Oakwoods Business Park, also Carttera Properties projects. Elsewhere, Community Care Access Centre renewed its premises comprising 39,300 sf at 199 County Court Boulevard in Brampton; Avnet Inc. extended its term on 26,000 sf at 6950 Creditview Drive in Meadowvale; Sephora capitalized on a long-term sublease (25,000 sf) at 5560 Explorer Drive in the ACC; and Ipex Incorporated inked a new deal for 22,800 sf at 1425 North Service Road in Oakville.

C O M PA R I S O N O F L E A S I N G O P T I O N S F O R T E N A N T S - T O R O N T O W E S T

Toronto West - Occupancy Costs - All Classes

TORONTO WEST SIGNIFICANT TRANSACTIONS

For more information on this report, please contact Avison Young:

Bill Argeropoulos

416.673.4029

John Markle

905.283.2396

Vice President & Director of Research, Canada

avisonyoung.com © 2014 Avison Young Commercial Real Estate (Ontario) Inc., Brokerage E. & O.E.: The information contained herein was obtained from sources which we deem reliable and, while thought to be correct, is not guaranteed by Avison Young. Acknowledgement: Data for graphs, charts and tables used in this report are sourced from Avison Young and Altus InSite. Some of the data in this report has been gathered from third party sources and has not been independently verified by Avison Young. Avison Young makes no warranties or representations as to the completeness or accuracy thereof.

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