Lots of doom and gloom and for the first time for me I agree with all the negative prognosis. IMHO I'm hoping for the best and preparing for he worst as best as I am able. Put on your seat belts this is going to be a bumpy ride!
 
ProjectEnd said:
On the whole, would you say we're heading into secure economic waters? The kind where big, multinational corporations want to take on project-initiating anchor leases, and development and construction companies, sure of their costs, want to embark on building them?
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Are you thinking of being a Bell Media 'journalist' in your next career PE? That is definitely a leading question. LOL

For the record......... of course times are challenging...............and you don't see me forecasting an unprecedented boom.

However, I'm not as gloomy as you.

I know some of who governments are talking to behind the scenes............. a small portion of which I report out here, generally when things are public in some way.
There are large players, looking at large investments in Canada.

Will that all come to pass in the next 12 months? Probably not. Will much of it come to pass in the next few years, I think so.
The exact timing.........and the details are very much up in the air.

ProjectEnd said:
I didn't even mention that Union Park (which lost an office tower in its most recent resubmission), Union Centre, The HUB, and CC3 have been removed from CBRE's forecasting charts since 2023. And 11 Bay is now gone completely once Amazon pulled out (no second position on the asset). Meanwhile, Allied has deleted its Development Department except for a skeleton crew as its mandate is no new construction for the foreseeable future.

It's...not good.
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I concur with your project list assessment above except for one site. There have been recent meetings on one of those. Again, nothing may come of it; but its not quite dead yet.

I will note, the vacancy rate in Downtown South is ~8%. That's high by Toronto's recent standards, but enough to spur new builds in much of the world.

For those looking for some insight, this is a good piece: https://thelogic.co/news/the-big-read/toronto-downtown-office-vacancy-rates/?lt=1

***

For all of that, perhaps, UT we could let this thread rest a bit.............no announcements are imminent.
 
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nightstreak said:
Office towers are built with anticipated demand, not this week's demand. Return to office is in full swing as has been discussed in this thread, and large square footage vacancy isn't at what you believe. These developments get paid off over decades and can keep floors vacant while awaiting market growth, but they do need to have a flagship tenant before getting started. Toronto is growing, the pandemic is over, office availability will continue to constrain.
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The spec builders of the 1960s, 1970s and 1980s were all bust by the mid 1990s. Institutional investors have taken over and their interests aren't building office towers but, making the most on their investments. There is little patience with real estate managers that don't deliver immediately on a 10 figure investment. There's also no benefit building for the future particularly when costs are already astronomically high. Lease rates will be much higher with higher absorption and lower vacancy with similar costs to build. The only thing that would spur construction is one or two large tenants (there are much fewer than you think) committing to at significantly higher lease rates than the going rate. It doesn't make any sense.
 
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maestro said:
The spec builders of the 1960s, 1970s and 1980s were all bust by the mid 1990s. Institutional investors have taken over and their interests aren't building office towers but, making the most on their investments. There is little patience with real estate managers that don't deliver immediately on a 10 figure investment. There's also no benefit building for the future particularly when costs are already astronomically high. Lease rates will be much higher with higher absorption and lower vacancy with similar costs to build. The only thing that would spur construction is one or two large tenants (there are much fewer than you think) committing to at significantly higher lease rates than the going rate. It doesn't make any sense.
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Well said. Another reminder: CIBC 2 hasn't had a single new lease since 2018. It'll be over half vacant when it comes online later this year (810k still available of 1.430k total).
 
ProjectEnd said:
Well said. Another reminder: CIBC 2 hasn't had a single new lease since 2018. It'll be over half vacant when it comes online later this year (810k still available of 1.430k total).
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Ummm..... CPP took 330,000ft2 last year.

I only show 370,000ft2 vacant out of 1.5M
 
Sorry for the bump but this building is looking finished and very nice. A nice tall office building with glass atrium would look very nice beside this.
IMG_0086.jpeg
 
LUVIT! said:
Lots of doom and gloom and for the first time for me I agree with all the negative prognosis. IMHO I'm hoping for the best and preparing for he worst as best as I am able. Put on your seat belts this is going to be a bumpy ride!
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No need to put the seat belts on because there isn’t going to be any ride, never mind a bumpy one at that.
 
dont need another glass tower. the towers are dead. Time to maintain what we have and build more green space.
 
KevR said:
dont need another glass tower. the towers are dead. Time to maintain what we have and build more green space.
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Since someone paid gazillions for the site and is busily updating plans, I doubt it will ever become a green/park area. That said, it seems unlikely at the moment that it will be another new 100% office tower but ......
 
KevR said:
dont need another glass tower. the towers are dead. Time to maintain what we have and build more green space.
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Without commenting on what is or is not happening here........

Toronto's Class A office market (core) is far from dead. The vacancy rate is sub 9% and declining. B and C buildings are a different story.
 
KevR said:
dont need another glass tower. the towers are dead. Time to maintain what we have and build more green space.
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The area already has a good amount of green space, the site is literally diagonally between Love Park and the CIBC park
 
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