Office condos in Toronto and Vancouver are setting a competitive pace as lease rates continue to rise in these expensive urban centres.
Examples include Silver, a 38-storey mixed-use tower in the inner-city submarket of Burnaby, B.C. that will feature 10,852 square feet of office space, 5,862 square feet of retail and 284 residential units, and Toronto’s Yonge Park Plaza, a mixed hotel-office building that will contain more than 250,000 square feet of office space.
The demand for owning office space isn’t much of a financial difference compared to leasing, says a new Colliers report. Intensifying urbanization and a desire for high quality buildings that are centrally located continue to push lease rates up.
In Vancouver, high demand indicates a need for more quality office condos, but supply is limited. The majority of interest lies in the Broadway corridor and downtown markets, but the suburbs see more transactions because it houses more office condos. In 2015, there were 30 sales recorded in metro Vancouver, compared to 126 in the suburbs.
New office condos with an array of different spaces are popping up across Toronto, with the central north market signaling the highest activity at 49 condos. Sales activity has been steadily increasing as developers add this asset type to diversify portfolios, reports Colliers. From 2010 to 2015, 177 transactions were recorded among 66 different buildings, with the majority of units close to downtown and central midtown transportation and near major highways.
Photo, Silver in Burnaby, B.C.