khris
Senior Member
January 23, 2009 01:44 PM - Large commercial real estate developments are struggling mightily in the new era of economic downturn in the GTA, with one notable exception: the area surrounding Pearson International Airport.
A year-end report released on Thursday by Cushman & Wakefield Lepage says there's one bright spot in the general gloom-and-doom of the recession, and that's the western GTA.
"Demand was anemic over the fourth quarter and there is strong expectation that job losses in the Canadian market, particularly in Ontario, will result in a significant upswing in the (large commercial) vacancy rate over the next six quarters," the realty company's report warned.
Overall, vacancy rates increased to 5.5 per cent in the fourth quarter from the third. However, in the GTA West area, vacancy rates rose only slightly, to 5.7 per cent in the fourth quarter of 2008, from 5.5 per cent in the third quarter. That figure "remains intolerably tight," the realty company reported.
That compares to other suburban markets such as the eastern GTA, which saw vacancies rise to 8.4 per cent from 7.8 per cent during the same quarter.
Mark Stainer, senior managing director for Cushman & Wakefield Lepage, said the western GTA market has seen the retreat of several U.S. companies, but has held up well.
"Housing is affordable, you're close to the airport and the U.S. and major highways, so there has been a bit of disconnect between the west market and the rest of the GTA," he said.
Some are even pressing on with new projects, such as the Hospitals of Ontario Pension Plan, which is responsible for about $4 billion worth of real estate.
HOOPP is one of the few breaking new ground.
Last October, as the financial crisis started to unfold, HOOPP started work on a $60-million office building in Mississauga, the Aerocentre V, near the airport. The 225,000-sq.-ft. building in the Airport Corporate Centre, which should be ready for occupancy next year, is all the more risky during an economic downturn because it's completely speculative, meaning it has no dedicated lead tenant.
It's even planned to be a LEED Gold certified candidate building, which means it's being built to the highest environmental standards.
"We have a lot of multinational tenants who want to be close to the airport, so this area has always fared well during recessions," said HOOPP portfolio manager Lisa Lafave. "We really can't manage by the headlines; we have to look at areas that we feel still have some upside for growth."
Source
A year-end report released on Thursday by Cushman & Wakefield Lepage says there's one bright spot in the general gloom-and-doom of the recession, and that's the western GTA.
"Demand was anemic over the fourth quarter and there is strong expectation that job losses in the Canadian market, particularly in Ontario, will result in a significant upswing in the (large commercial) vacancy rate over the next six quarters," the realty company's report warned.
Overall, vacancy rates increased to 5.5 per cent in the fourth quarter from the third. However, in the GTA West area, vacancy rates rose only slightly, to 5.7 per cent in the fourth quarter of 2008, from 5.5 per cent in the third quarter. That figure "remains intolerably tight," the realty company reported.
That compares to other suburban markets such as the eastern GTA, which saw vacancies rise to 8.4 per cent from 7.8 per cent during the same quarter.
Mark Stainer, senior managing director for Cushman & Wakefield Lepage, said the western GTA market has seen the retreat of several U.S. companies, but has held up well.
"Housing is affordable, you're close to the airport and the U.S. and major highways, so there has been a bit of disconnect between the west market and the rest of the GTA," he said.
Some are even pressing on with new projects, such as the Hospitals of Ontario Pension Plan, which is responsible for about $4 billion worth of real estate.
HOOPP is one of the few breaking new ground.
Last October, as the financial crisis started to unfold, HOOPP started work on a $60-million office building in Mississauga, the Aerocentre V, near the airport. The 225,000-sq.-ft. building in the Airport Corporate Centre, which should be ready for occupancy next year, is all the more risky during an economic downturn because it's completely speculative, meaning it has no dedicated lead tenant.
It's even planned to be a LEED Gold certified candidate building, which means it's being built to the highest environmental standards.
"We have a lot of multinational tenants who want to be close to the airport, so this area has always fared well during recessions," said HOOPP portfolio manager Lisa Lafave. "We really can't manage by the headlines; we have to look at areas that we feel still have some upside for growth."
Source
