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IBM has invested a small fortune on their facilities and traffic infrastructure in Markham. I doubt they'll be moving anywhere, the relocation costs alone would be prohibitive. They may have received some very beneficial tax incentives from the city also for all the development work they did.
 
Big Daddy said:
Rental rates in the "burbs" are much more affordable. Can't think of a single reason a company like IBM would move back downtown.
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Not one single reason? In a competitive technology based field, would not talent pool availability count? For a company seeking new hires, I would suspect the pool of qualified candidates would be greater in downtown Toronto than for IBM's Markham location.
 
It depends on the extent to which these companies want to attract young, innovative, creative car-less types in their 20-30s. I'd say IBM fits the bill.
 
Canadian Chocho said:
Maybe because tech firms are starting to cluster downtown. Didn't google move into a new office downtown last year or something?
http://m.phys.org/news/2012-08-tech-firms-shift-silicon-valley.html
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This is true for smaller or medium sized tech companies, but usually not for larger campuses like IBM, Google, Microsoft or Facebook. (Many of these have satellite offices in urban areas however, the biggest probably being Google NYC)

One big factor in choosing whether you want a suburban or urban office location is who you want to attract and retain as employees. If you're after the younger, single crowd, they would most likely value a downtown office within walking distance of their condo at King & Spadina or Liberty Village. A suburban office park in Markham would more likely attract those who want or need a larger house for less money per square foot, or those who appreciate the quality of Chinese restaurants in the area, or those who enjoy the suburban lifestyle.

Office location is a big factor when recruiting talent. Imagine you're trying to recruit a recent graduate. If you're office is say at King & Bathurst downtown Toronto, you can sell them on the exciting lifestyle, good food, bars and coffee, and urban environment (and lots of other young single people around). On the other hand, they might be considering an offer (of much more money) from Google in California. In that case, they either have to live in a very suburban area (with beautiful natural surroundings), or live in SF and take an hour bus each way every day.

That's why smaller companies can use office location to their advantage when recruiting.

I don't think IBM would simply move everyone from Markham to Downtown, there would be too many employees that would hate the move. Creating an additional office is plausible though.
 
Interesting, you're sort of suggesting large firms can have different offices to appeal to their various employee demographics?
 
buildup said:
Interesting, you're sort of suggesting large firms can have different offices to appeal to their various employee demographics?
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In IBM's case, maybe. But in the other cases (say Facebook), I think it's more of a necessity due to space requirements and rent/property prices. That's why they have to create their own villages with food and everything to appease their workers since there are no restaurants around lol.

I'm sure a company like Facebook would prefer their campus be near SF. They wouldn't have to deal with busing (or even ferrying) their people from there every day (and having those people be attacked by protestors).

This gives companies like Twitter and Amazon an advantage when recruiting certain types of people, which are two examples of larger companies who are actually inside the city (SF & Seattle), or smaller companies like Foursquare which is in Manhattan, or a start-up company in downtown Toronto. If you're company is in an office park in Markham or Mississauga or Waterloo however, you don't have the urban advantage when competing against companies in Silicon Valley for talent.
 
buildup said:
Interesting, you're sort of suggesting large firms can have different offices to appeal to their various employee demographics?
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Actually sorry I think I misinterpreted your question. Usually, you're right they only have one office per city. I was just speculating that if IBM didn't want to piss of their Markham employees but still wanted to recruit from the downtown population, they could open a secondary office downtown.
 
possibly, but a secondary office wouldn't be the anchor tenant in a 1.5 million square foot office building. It may take 100k square feet in unleased space in another building. Apple took Southcore, Cisco took waterpark place, Google is the only one to anchor a building, and even then its a very small one. (Richmond adelaide 2 I think)
 
maestro said:
Accounting firms are out and I can't think of a law firm quite big enough to headline a tower of this size. I think a bank is a sound wager and probably go with Scotia seeing they sold their building, bought ING Direct and, have been rumoured as shoppers for new space.
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I suspect Scotia proper will stay put at Scotia Plaza, but based on the various clues sprinkled out over the past year, it certainly would fit if the anchor tenant was Tangerine, nee ING Direct, now a Scotia subsidiary.
 
The bank towers downtown only house head office and senior management. Everyone else is in cheaper accomodations around the city. The office towers, if owned by the bank, are considered "profit centres" and creates a better return by leasing out the space as opposed to having staff there. Most are now leasing their space whenever possible becausr they get a huge discout by taking a lot of space and because they have a pretty good covenant. There really is no incentive to have your "staff" downtown. Royal Bank has a very large office building at 401 and Mississauga RD..

Microsoft has a large office there as well (their Canadian Head Office) while still having advertising people at 222 Bay St.


Update - I believe this is now changing due to the number pf people moving downtown. I hope this trend continues.
 
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There really is no incentive to have your "staff" downtown. Royal Bank has a very large office building at 401 and Mississauga RD..
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And opened one recently at Wellington and Simcoe (RBC Centre) and another being built on Queen's Quay. Lots of incentive to have staff downtown. There's a reason we are seeing an office boom downtown and not outside the core. And yes Scotia was the last. They sold it in 2012 to Dundee and H&R.
 
The two banks I'm quite familiar with have subleased their space to others on the rare occasion however, I've never heard of them leasing more space than they actually need. They own a few small buildings through acquisitions but, divested of their real estate holdings over the past couple of decades.

Both have hundreds of thousands of square feet housing several thousand employees in multi-level basements (largely converted vaults) under the bank towers. Poor saps.
 
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