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Found 11 results

  1. Vacancy rates keep rising in third quarter for Canada's commercial real estate sector, report shows (CP) – 44 minutes ago TORONTO — The amount of empty office space across Canada continued to rise in the third quarter due to higher unemployment in white-collar industries and excess inventory in some cities, a new report shows. Vacancy rates for commercial real estate are expected to keep rising "well into 2010" as the country works through the impact of the recent recession, CB Richard Ellis Ltd. said in report released Monday. Vacancy rates rose for the third straight quarter to an average of 9.4 per cent, up from 6.3 per cent for the same time last year, said the real estate services firm. "Limited new job creation in Canada's 'white-collar' industries and the addition of new inventory in two of Canada's three largest office markets are cited as reasons for the increase," according to the National Office and Industrial Trends Third Quarter Report. Commercial vacancy rates rose most noticeably Calgary, Toronto and Vancouver, the report shows. Calgary's third quarter vacancy rate jumped to 13.1 per cent, from 4.7 per cent last year, due to the impacts of a slowdown in the oil and gas industry. "The city's oil and gas industry and commercial market remained inexorably linked, as players both large and small continue to recognize that even Calgary has not been immune to the country's new economic reality," the report states. In Toronto, the commercial vacancy rate rose to 9.1 per cent from 6.6 per cent last year. The vacancy rate in downtown Toronto is expected to climb further in the coming quarter as space becomes available in newly constructed office towers. In Vancouver, vacancy rates climbed to 8.9 per cent from 5.4 per cent for the same time last year. The report said Vancouver is one of the more stable markets in the country thanks to limited new development. Montreal's vacancy rate rose to 10.3 per cent from 8.3 per cent last year, while Halifax's rose to 10.2 per cent from 8.4 per cent. Vacancy rates also rose in the country's smaller office markets, specifically in suburban areas, but at a lesser rate, the report shows. It said cities with government office space also saw more stability in their commercial real estate markets. Ottawa had the lowest overall third quarter vacancy rate in the country of 5.8 per cent compared to five per cent for the same time last year, while Winnipeg's rate came in at 7.5 per cent up from 4.8 per cent last year. The overall vacancy rate in the Waterloo Region, home to such technology firms as Research in Motion (TSX:RIM), edged up slightly to 6.7 per cent from 6.4 per cent last year. The report predicts vacancy rates to keep rising in the fourth quarter and into 2010, "as Canada continues to grind its way out of the recession."
  2. http://globalnews.ca/news/1895026/business-vacancies-skyrocketing-in-montreals-west-island/
  3. McGill College office space experiencing a revival By Allison Lampert, Montreal Gazette October 6, 2010 When 1981 McGill College was sold two years ago, the new owners were purchasing an office building that would soon be almost a third empty. At the time, a major tenant, the law firm Ogilvy Renault, which occupied about 177,000 square feet out of 630,000 square feet of leasable space, was moving to Place Ville Marie. "It's a risk that we took," said Martin Rousseau, leasing director for the new owner, Industrial Alliance Insurance and Financial Services Inc. "But now it's going well, we're very happy." After hitting a vacancy rate of more than 11 per cent and losing some major tenants over the last decade - including CGI Inc., Bell Canada, and the Caisse de dépôt et placement du Québec - the office buildings on McGill College Ave. appear to be going through a revival, real estate brokers say. In recent months, landlords have landed some big name tenants. In 2012, tax and risk management consultancy firm RSM Richter is to move its Montreal offices from Alexis Nihon in Westmount to 1981 McGill College - a coup for Industrial. Last week, Polaris Realty announced the arrival of the Fédération des Caisses Desjardins du Québec to 1253 McGill College. And over the summer, Astral Media moved from Ste. Catherine St. downtown to its new offices on McGill College. "It's been good news for McGill College," said Luciano D'Iorio, president of Terramont Real Estate Services Inc. "There's been a lot of musical chairs." Brokers weren't always so optimistic about the bustling downtown street. With McGill College's vacancy rate hitting 11.3 per cent in 2002, the fear was that other tenants would want to relocate near the Caisse's new headquarters at the Quartier International besides Square Victoria. "Then the story was doom and gloom," said D'Iorio, who's writing a piece on the street's revival for the real estate trade publication Espace Magazine. "There was the fear that tenants wouldn't want to be on McGill College." In the third quarter, the Montreal market for Class A office space - as in most of the country - showed an improvement in vacancy rates, an October report by Cannacord Genuity says. In Montreal, the vacancy rates for Class A office buildings are now under the equilibrium point of 10 per cent level, D'Iorio says. But rents for Class A buildings dropped slightly in the third quarter compared to the second quarter, said the Cannacord report, citing data from CB Richard Ellis. Rousseau of Industrial says he's optimistic despite still having the following three blocks of space left to rent: 35,000 square feet, 24,000 square feet and 5,000 square feet. "Historically it's an attractive address," he said of McGill College. [email protected]
  4. Revitalizing Calgary's core: Some possibilities for rebirth 'Calgary has reinvented itself before ... from a ranching/agriculture-based economy to oil and gas' By Richard White, CBC News Posted: Jun 17, 2016 While it is shocking that Calgary's downtown skyscraper vacancy rate skyrocketed to 20 per cent at the end of March, and that it could soon surpass the vacancy record of 22 per cent set in 1983 (twice what it was a year ago), we should keep some perspective. These numbers are not unheard of in major corporate headquarter cities. Back in the 1970s, New York City was in decline. By the mid-70s, the city came close to bankruptcy and its office vacancy rate hit 20 per cent. In 1993, Toronto's downtown office vacancy rate hit 20.4 per cent. Vancouver's rose to 17.4 per cent in 2004. And these may not even be records, as data only goes back to 1990 for those cities. Today, New York City, Toronto and Vancouver's downtowns are booming. All downtowns go through periods of growth, decline and rebirth. Montreal's decline and rebirth In the '60s, the case could still be made Montreal was Canada's business capital. Its downtown was a major office headquarters for Quebec's natural resource industry as well as a thriving financial industry, including the head offices of the Bank of Montreal, Royal Bank of Canada and insurance giant Sun Life. In 1962, when the Place Ville Marie office designed by iconic architects I.M. Pei and Henry N. Cobb opened, it symbolized Montreal's arrival as a world-class city. This was further reinforced with the hosting of Expo '67, the arrival of Montreal Expos baseball team in 1969, and the 1976 Olympics. However, the '70s brought the threat of separation, which prompted many corporate headquarters and their executives to move to Toronto. By 1971, Toronto's population surpassed Montreal's. The 1976 Montreal Olympics, the most expensive in history, plunged the city into a legacy of debt and decline for decades. Today, Montreal has reinvented itself as an international tourist destination and a major player in the gaming and music industries. New York's return from the brink In 1975, New York City was on the brink of bankruptcy. The gradual economic and social decay set in during the '60s. The city's subway system was regarded as unsafe due to crime and frequent mechanical breakdowns. Central Park was the site of numerous muggings and rapes; homeless persons and drug dealers occupied boarded-up and abandoned buildings. Times Square became an ugly, seedy place dominated by crime, drugs and prostitution. Today, New York City is back as one of the world's most successful cities, economically and culturally, and Times Square is again one of the world's most popular urban tourist attractions. Calgary's future Perhaps Calgary has already begun to reinvent itself. Despite the growing vacancy rate downtown, the CBRE's First Quarter 2016 Report says, "Not all commercial real estate in the city has been affected, though. Suburban office space held steady from the last quarter, and the industrial real estate market is still robust because it's not tied to oil and gas." Indeed, Calgary has become one of North America's largest inland port cities, including two state-of-the art intermodal rail operations. Calgary is now the distribution headquarters for Western Canada, a position once held by Winnipeg. And so Calgary's industrial sectors employ more people than the energy sector. Calgary Economic Development is working with the real estate community to implement a "Head Office/Downtown Office Plan" with three action items. One idea is the repurposing of smaller older office spaces as incubators and innovation hubs to attract millennials and/or entrepreneurs. A good example of this is in West Hillhurst, where Arlene Dickenson has converted an old office building at the corner of Memorial Drive and Kensington Road that was once home to an engineering firm into District Ventures, home to several startup packaged goods companies. Another repurposing idea would be to convert some older office buildings into residential uses. In the U.S., programs like Vacant Places Into Vibrant Spaces have been successful but mostly for office to residential conversions of older buildings with smaller floor plates. They don't work for offices buildings with floor plates over 7,500 square feet (which is the case for most of Calgary's empty high-rise office space), as it is expensive and difficult to meet residential building codes, which are very different from commercial ones, making it tough to compete with new residential construction. In an ideal world, Calgary could become a global talent hub, where skilled workers who have been displaced from the energy and related industries continue to live in Calgary but become a remote workforce for energy projects around the world. Temporary and permanent satellite offices could be established in Calgary with teams of engineers, geologists, accountants, bankers etc. working on projects around the world. The obvious strategy would be to woo international companies in the finance, insurance, transportation, agriculture, digital media and renewable resources to set up a Canadian or North American office in Calgary, maybe even relocate here. With cities like San Francisco, Seattle and Boston facing major affordable housing crises for millennial workers, Calgary could become a very attractive place for a satellite office for companies in those cities. One "off the wall" idea postulated by George Brookman, CEO of West Canadian Industries, would be to promote Calgary as an "International Centre for Energy Dispute Resolution," similar to the Netherland's TAMARA (Transportation And Maritime Arbitration Rotterdam-Amsterdam), which offers an extrajudicial platform for conducting professional arbitration for settling disputes. However, one wonders: Could Calgary compete with London and New York, which are already leaders in the international arbitration business? Incentivize rebirth Calgary has reinvented itself before, evolving from a ranching/agriculture-based economy to oil and gas in the middle of the 20th century. Indeed, the downtown core, which is an office ghetto today, would benefit immensely if incentives could be made to convert a dozen or so office buildings into condos, apartments or hotels to foster a rebirth of the core as a place to live. Calgary at a Crossroads is CBC Calgary's special focus on life in our city during the downturn. A look at Calgary's culture, identity and what it means to be Calgarian. Read more stories from the series at Calgary at a Crossroads. http://www.cbc.ca/news/canada/calgary/calgary-core-kickstart-richard-white-1.3638276
  5. July 28, 2010 Economic Snapshot Office vacancy rates hit five-year high, despite uptick in office jobs JOHN CLINKARD consulting economist, CanaData The national office vacancy rate reached 9% in the second quarter of 2010, continuing a trend that started in the fourth quarter of 2008. This rate was up from 8.8% in the first quarter and was its highest level since the second quarter of 2005. According to the most recent numbers from Cushman & Wakefield, the increase was largely due to the addition of 1.5 million square feet of new supply. And it occurred despite the fact that 911,800 square feet of space were absorbed in the quarter. The office vacancy rate retreated slightly in Calgary (from 13.4% to 13.3%) and Winnipeg (from 9.3% to 9.0%) but increased in the remaining eight major metro areas. Among the 10 largest census metro areas, St John’s, N.L. had the lowest office vacancy rate in the country (5.5%), despite a significant decline in office-based employment over the past year. Ottawa recorded the second lowest office vacancy rate (6.6%) due in large part to a strong (+7.6% year over year) increase in office-based employment in the second quarter. Other major metro areas with below (national) average vacancy rates in the second quarter included: Saint John, N.B. (7.9%), Toronto (8.1%), and Vancouver (8.4%). In Montreal the office vacancy rate increased from 9.1% to 9.2%, its highest level since the third quarter of 2007. The office vacancy rate for the 10 largest metro areas in Canada is now at its highest level in five years, and year-to-date commercial building permits are down by 3.5% year over year in May. As such, the near-term outlook for new office construction is quite guarded. The outlook is further clouded by the concerns about the health of the U.S./global recovery. Having said this, the relative strength of office-based employment in Ottawa, Montreal, Toronto and Vancouver continues to point to a pickup in office construction late in 2010 or early in 2011. John Clinkard has over 30 years’ experience as an economist in international, national and regional research and analysis with leading financial institutions and media outlets in Canada. :(:(
  6. Office vacancy rates to go even higher: report Financial Post Published: Wednesday, August 05, 2009 Neither Calgary nor Toronto can expect any immediate relief, as both will see millions of square feet of new supply coming onto the market over the next 24 to 36 months (seven million for Calgary and five million for Toronto). Sean DeCory/National Post Neither Calgary nor Toronto can expect any immediate relief, as both will see millions of square feet of new supply coming onto the market over the next 24 to 36 months (seven million for Calgary and ... OTTAWA -- Vacancies in Canada's office market have surged to 8.5% and will climb toward levels not seen since the dot-com bust earlier this decade before finally levelling out, commercial broker Avison Young said in a report Wednesday. "The vacancy rate will definitely be trending up in the coming quarters," said Bill Argeropoulos, director of research at Avison Young. "We're not sure if it will breach the recent high of 11.5% in 2003, but we do see the vacancy perhaps breaching the 10% barrier in the coming quarters and perhaps into 2010, largely because of new supply coming into the market." Furthermore, said Avison Young chief executive Mark Rose: "The global financial crisis has had a significant impact on market psychology, creating inertia and paralyzing decision-making. Recovery . . . will occur only when corporate profits return, unemployment rates drop and decision-makers believe were are trending upwards." In the past 12 months, vacancies have climbed more than two percentage points from the 6.1% rate of mid-year in 2008, and Mr. Argeropoulos said it will likely be the end of 2011 before national rates begin to level off. Mississauga holds the distinction of having the highest office vacancy rate in the country at 10.8%. Toronto experienced the highest annual change among eastern cities, climbing from 6.6% to 9.6% in the past 12 months, a three-year high. Calgary, meanwhile, underwent the highest change in vacancy rates among western cities, soaring from 3.6% in mid-2008 to 9.3% by mid-2009. Neither Calgary nor Toronto can expect any immediate relief as both will see millions of square feet of new supply coming onto the market over the next 24 to 36 months (seven million for Calgary and five million for Toronto). Both will definitely surpass the 10% vacancy rate in the months ahead, Mr. Argeropoulos said. Calgary also saw the largest plunge in rental rates, with downtown Class A space collapsing to $30 per square foot from $46. This is still the most expensive in the country, however, along with Edmonton, where prices are also at $30. Nationally, lease rates for downtown Class A space fell to $22 per square foot in mid-2009 from $25 the year before. Prices ranged from a low of $13 in Quebec City to Calgary and Edmonton's $30. Avison's mid-year office survey tallies results for 12 regions across the country. Canwest News Service ____________________________________________________________________________________________ Unused office space up 75% in Q2: report Garry Marr, Financial Post Published: Tuesday, June 23, 2009 The amount of unused office space business put on the sublease market grew by almost 75% last quarter from a year ago, a further indication of the crumbling economy. CB Richard Ellis Ltd. said more than 7.7 million square feet of office space came back into the market across the country, an increase from the more than 4.4 million that hit the market in the same quarter a year ago. The sheer size of the increasing sublease market drove the national vacancy rate to 8.3% from 6.4% a year ago. "The deepening recession has prompted businesses across the country to continue to identify ways to trim overhead and pare back their need for phantom space," said John O'Bryan, vice-chairman of CB Richard Ellis. "The trend of doing with less right now is especially evident in Canada's major office markets. However, it is important to note that the commercial real estate market typically lags behind the residential market by a few months, so we are simply now experiencing the slowdown that other markets went through in the last quarter." Mr. O'Bryan said the Canadian market continues to fare better than United States markets where vacancy rates reached 15.9% at the end of the first quarter. Canadian vacancy rates were only 7.5% at the end of the first. "If we were in the U. S. right now looking at a national occupancy rate of 91.7%, there would be a widespread sense of optimism regarding the health of the country's commercial market." But there are clear signs across the country that the office market has been hit hard by the economy with vacancies rising everywhere. In Vancouver, the beaten-down technology and resource sectors helped drive sublet activity. The effect was to push the vacancy rate from 5.6% to 7.8%. The once-airtight Calgary office market has sprung a leak as lower oil prices have led many of Alberta's junior oil and gas companies to cut their space. In the second quarter, Calgary's vacancy rate rose to 10.2% from 4.6% a year ago. CB Richard Ellis says it will rise to 20% by the end of 2009. Vacancies in Toronto, the largest office market in the country, rose to 8.4% in the second quarter, up from 6.7% a year ago. CB Richard Ellis expects rates to continue to rise in 2009 and 2010. In Montreal, softness in the commercial market drove vacancy rates up from 8.5% to 9.7%, on a year-over-year basis. The real estate company said cost-containment measures by large tenants have impacted the market. Backed by the federal government, Ottawa is proving to have the best office market in the country. The overall vacancy rate grew to 5.1%, only a slight jump from the 4.9% a year ago. Ottawa's suburban offices, which are more dependent on the private sector, were hit harder than the government-dominated downtown core. [email protected] Here's the complete report : http://www.avisonyoung.com/library/pdf/National/MidYear09-National-Office.pdf
  7. In past recessions, city's developers learned the effects of overbuilding the hard way. Caution is paying off this time around ELEANOR BEATON Globe and Mail Update Two years ago, Yves-André Godon was scouring Montreal for an anchor tenant for his company's proposed 400,000-square-foot downtown office tower. At the time, Montreal's office market was looking rosy. The vacancy rate was a healthy 9.3 per cent and 6 per cent of the city's available office space was being leased each quarter – a record absorption rate, Mr. Godon says. The time looked ripe for the managing director of SITQ Canada, an international real estate investment company based in Montreal, to forge ahead with the development. But Mr. Godon hesitated. Even though it had been years since the city had seen new Class A office space built, he says many large-scale tenants seemed content to stay put; SITQ was having trouble attracting an anchor tenant quickly enough. “We didn't want to do anything on a speculative basis,” he says. Given the economy's subsequent downturn, Mr. Godon's instincts appear to have been right. It's a cautionary stance that was learned the hard way. During past recessions, overbuilding caused Montreal's office market to suffer more than in other parts of the country. But today, as other major cities contend with rising vacancy rates and the simultaneous delivery of millions of square feet of new office space, the kind of discipline that Mr. Godon displayed is helping to shield Montreal from the same drastic effects of the downturn. Montreal developers “lived through a lot of pain,” says Jean Laurin, president and chief executive officer of real estate advisory Devencore Ltd. “Few developers are going ahead until they find tenants.” As a result, “we have not had any exposure to overbuilding,” adds Robert Mercier, president of real estate services firm DTZ Barnicke (Quebec). The dearth of new developments is not the only factor. Also contributing is continued strong demand from tenants who are not players in the industries hit hardest by the downturn, such as energy, experts say. The combination means that Montreal now has one of the most stable office markets in the country. Even though at 9.7 per cent, Montreal's vacancy rate is higher than Toronto's (8.4 per cent) or Vancouver's (7.8 per cent), according to second-quarter figures from real estate firm CB Richard Ellis, downtown office vacancy rates in Montreal have risen less than in other major Canadian cities. Montreal's sublet space as a percentage of overall vacancy – a leading indicator of the health of the office leasing market – is, at 11 per cent, far lower than in other major cities, a sign that most tenants are holding onto their space, rather than putting it back on the market. The city is contending with a much smaller rise in sublet space than other cities. Insiders estimate that 10,000 to 15,000 square feet of sublease space comes back on the market each week. Unlike Calgary and Toronto, what little sublet space Montreal does put back into the market isn't competing for tenants with a glut of brand-new supply. Other than a recently constructed 840,000-square-foot Bell Canada Campus, the city has seen virtually no new office construction in recent years. In contrast, Toronto's central business district is facing the delivery of up to 3.1 million square feet of new office space, according to CB Richard Ellis. With little new development in the downtown in recent years, large-scale tenants in Montreal have few rental options, and therefore tend to stay put, further stabilizing the market. “Leasing is very strong on the renewal front,” Mr. Laurin says. Montreal also benefits from a diverse user base, says Brett Miller, executive vice-president of CB Richard Ellis in Quebec. He points out that the city's major employers represent solidly performing industries from the engineering, IT and video gaming industries. While Montreal may be performing well in comparison to other major cities, industry veterans aren't forgetting the lessons learned from the past. Developers such as Mr. Godon aren't planning any new developments until the economy recovers. “We're back to Real Estate 101,” he says. “That means focusing on serving the tenants we have, rather than looking for new projects.”
  8. Je pense que ça va vous faire plaisir... LORI MCLEOD Globe and Mail Update April 16, 2008 at 1:43 PM EDT Montreal has edged ahead of midtown Manhattan to create an all-Canadian list of the top five office rental markets in North America in the first quarter of 2008, according to a study released Wednesday by real estate brokerage Cushman Wakefield & LePage. Canada's five largest cities had the lowest office vacancy rates of the 15 major leasing markets in North America in the first three months of the year, according to Cushman Wakefield's data. Downtown Montreal took fifth spot on the list with a vacancy rate of 5.8 per cent, but posted the largest year-over-year drop at 3.5 percentage points due to strong demand and a lack of new supply. This caused it to squeak by midtown Manhattan, the strongest market in the United States, with an office vacancy rate of 6 per cent. “Montreal has experienced years of virtual stagnation in the office leasing market. But slow and steady economic growth and a lack of new development over the past decade have transitioned Montreal from a tenant market to a landlord market,” Colum Bastable, president and chief executive officer of Cushman & Wakefield, said in a statement. At a vacancy rate of just 2.6 per cent, Vancouver had the tightest downtown office rental market of the 15 cities included in the study. This was followed by Calgary at 3.6 per cent, Toronto at 3.9 per cent, Ottawa at 4.1 per cent and Montreal at 5.8 per cent. The city with the highest downtown office vacancy rate was Dallas at 28.7 per cent, far greater than the next on the list, Los Angeles, at 13.5 per cent. The sharpest rise in vacancy rate occurred in Calgary, growing to 4.5 per cent in the first quarter from a low of 1.4 per cent in the same period of 2007. Vacancies remained tight in Class A downtown buildings in the city at a rate of just 1.8 per cent. Despite a weakening provincial economy and three new office towers under construction, Toronto's vacancy rates continue to decline, Mr. Bastable said. The study also measured vacancy rates in suburban areas, where Canada's market was again tighter than that of the U.S. Toronto's suburbs had the lowest vacancy rate of these markets in the first quarter at 7.2 per cent, followed by those of Calgary at 7.4 per cent, Ottawa at 7.5 per cent, Vancouver at 9.3 per cent and Montreal at 11.2 per cent. The suburbs of Dallas had the highest vacancy rate at 21.5 per cent, followed by those of central New Jersey at 20.3 per cent and Chicago at 19 per cent. “All of Canada's major markets are well positioned to weather an economic downturn. Years of conservative and prudent development, along with low interest rates, will work to keep supply and demand in relative equilibrium even as the economy and demand slacken,” Mr. Bastable said. source: http://www.theglobeandmail.com/servl...tory/Business/
  9. http://www.montrealgazette.com/business/Outlook+rosy+Montreal+real+estate/2238533/story.html
  10. jesseps

    Bye Bye Dubai?

    (Courtesy of Inhabitat) Now thats a hell of a thing, build million dollar buildings just to destroy them
  11. Avison Young Montreal | 2008 Review and 2009 Forecast | 2008 In Review At the start of 2008, a strong Canadian dollar negatively impacted the province’s export industry. However, Montreal still posted positive economic growth of 1.7% for the year.2008 was a challenging year for the Montreal economy. The combination of a strong Canadian dollar for most of the year and the recent financial crisis in the United States negatively impacted the province’s export industry. Quebec’s economy is positioned in industrial sectors that are lagging or in a slump, such as the clothing, forestry, furniture and manufacturing industries. However, despite all this, Montreal still posted positive economic growth of 1.7% in 2008. Employment grew by 1.3% in the year and is anticipated to increase by another 1.5% in 2009. Consumer spending remained high and has contributed tremendously to economic growth. Office Engineering firms, many of whom are expanding to support major infrastructure projects in the province, spurred demand for office space. Downtown office vacancy closed the year at 5.4%, a significant drop from 6.2% at the end of 2007 and 9% at the end of 2006. The decrease in vacancyrates in the downtown market was accompanied by only a slight increase in rental rates. The suburban office vacancy rate has remained stable over the past four years, and closed the year at 13.1%. In 2008, 400,000 square feet (sq. ft.) of space was absorbed in the market, significantly lower than the 2007 absorption of 1.37 million sq. ft. Absorption of office space has been modest due to lack of quality space. Certainly, what is left of quality office space in downtown Montreal is quickly being absorbed, and options for tenants are becoming increasingly limited. Industrial Montreal’s manufacturing sector has been strongly affected by the rise in the value of the Canadian dollar. As a result, the industrial market has moved away from manufacturing to logistics and distribution type industries that drove demand for industrial space in Montreal. These types of companies require smaller spaces with greater clear heights. Consequently, vacancy rates increased for large spaces of 100,000 sq. ft. and more, whereas spaces between 15,000 and 25,000 sq. ft. became increasingly more difficult to find. Buildings with clear heights of 24 feet are in great demand and have an extremely low vacancy rate of approximately 1%. The rental rates for these buildings have therefore increased. Limited availability of appropriate space motivated tenants to construct built–to-suit projects that provide the amenities they require. Many of the older, more obsolete buildings are being demolished or completely renovated by developers. Retail Substantial consumer demand in Montreal created an active retail market in 2008, and retail sales rose by 5.5% in the year. In the downtown core’s central area, rental rates have quadrupled and vacancies are nonexistent. Rental rates closed the year at between $200 to $215 psf at the corner of Ste-Catherine and Peel Streets. Newcomers to Ste-Catherine Street include Apple Computer’s first Montreal retail location at 1321 Ste-Catherine Street West and H&M at the corner of Peel Street, with 20,000 sq. ft. Investment The financial crisis in the United States has softened the investment market in Montreal. Assets offered for sale require a longer exposure period. Investors using financial leverage as the basis for investment are having trouble completing acquisitions, thus diminishing the occurrence of successful transactions. As a result capitalization rates increased by approximately 25 basis points this year. Despite this, many successful transactions were completed earlier in 2008. Industrial Alliance Insurance and Financial Services Inc. invested approximately $100 million to acquire a 50% interest in 1981 McGill College, together with a major financial partner that acquired the remaining 50%. Cominar REIT acquired 2001 McGill College for $165 million. Canderel and Proment sold the first Phase of the Bell Campus for $185 million to a German real estate investment fund. 2009 Forecast Office Montreal is the only city in Canada with no significant downtown office construction projects. Until recently, large tenants have been able to find suitable alternatives that were much less expensive than proposed new projects. However, as vacancy rates continue to plunge, the availability of quality space will become even more limited. Tenants will soon have no choice but to consider one of the new construction projects. Expect to see the beginning of one or two office construction projects in 2009. Potential office developments include Canderel’s development of 1201-1215 Phillips Square, Hines’ development of 900 de Maisonneuve, Magil Laurentienne’s office or mixed-use building at 701 University and Westcliff’s development of Phase 2 of Place de la Cité Internationale. Quebec’s 2008 budget aimed to stimulate business investment by eliminating tax on capital for manufacturers and by offering a tax credit for the purchase of manufacturing equipment and a tax credit for new information technology companies. Accordingly, the Province of Quebec agreed to provide investment banking giant Morgan Stanley with $60 million in tax credits for opening a new global technical support centre in Montreal. Morgan Stanley is currently searching for office space in anticipation of bringing staff levels to 500 or more. Phase 1 of the new Bell campus on Nun’s Island was officially opened in August of this year. Phase 2 is anticipated to be ready for occupancy in February 2009. It will comprise 235,000 sq. ft. of office space and amenities, bringing the total to 840,000 sq. ft. A third phase is also planned, thus bringing the campus total to approximately 1.4 million sq. ft. The downtown core office market has absorbed a large percentage of the space formerly occupied by Bell. Retail In 2009, Canadians will likely be faced with weakening job prospects, tighter credit conditions and economic uncertainty, thus leading to moderated consumer spending. Retail sales are expected to grow by only 3.5% in 2009, as opposed to the 5.5% growth seen in 2008. Demand for space on Ste-Catherine Street will slow dramatically in 2009. As a result, retail vacancy rates are anticipated to increase and if retail sales continue to lag, we expect to see some retailers walking away from stores that do not perform. This will give tenants the upper hand in lease negotiations. Industrial The diminishing strength of the Canadian dollar will benefit the export industry in 2009. Demand for industrial space will likely come from the logistics, distribution and aerospace industries. We anticipate the overall vacancy rate to increase, as more space comes to market and older buildings that lack required ceiling heights remain empty. However, the vacancy rate for smaller buildings with adequate clear heights will remain low. Rental rates for the older, more obsolete buildings will decrease and rates for newer, smaller spaces with adequate ceiling heights will remain flat. Industrial construction activity will continue to slow in 2009 as a result of financing difficulties coupled with high land and construction costs. However, industrial growth will continue off the island of Montreal due to lower land costs and higher availability. Investment Banks have tightened credit significantly and consequently, financing is more difficult to obtain. Borrowers that lack liquidity will likely have difficulty acquiring assets. This, however, will leave the door open for REITs and international investors with capital at their disposal. In 2009, we anticipate a general slowdown in the investment market. The majority of investment sales deals in 2009 will be concentrated on a few portfolio deals; mostly smaller transactions involving retail and warehouse properties. Prices for commercial real estate product will likely decrease and cap rates will increase by 50 to 100 basis points. http://www.avisonyoung.com/library/pdf/National/forecast2009.pdf Également présent dans la section "Ressources".