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Bay Street still has Canada’s most expensive office space

http://renx.ca/bay-street-still-canadas-expensive-office-space/

 

Bay Street in Toronto has the most expensive office space in Canada, and no other city comes close to matching the $68.52 per square foot average rent that’s being asked for in the heart of the country’s financial district.

 

JLL Canada recently released its “Most Expensive Streets for Office Space” report, which ranks Canadian cities by their highest asking rents. It shows many companies are still willing to pay a premium for the most expensive spaces, and competition is growing to get into prominent financial, retail and government hubs.

 

“The most significant trend that we are seeing across major markets is that there are a large number of new developments underway,” said JLL Canada president Brett Miller. “Although we have only seen minor changes to the top market rents thus far in 2014, we anticipate that as the new inventory comes to market, overall rents will decrease in the older class-A stock whilst headline rents in new developments may raise the top line rents.”

 

Here are the most expensive streets in nine major Canadian cities

 

1. Bay Street, Toronto, $68.52 per square foot

 

Bay Street held strong in first place for the fourth year running. It features the headquarters of major Canadian banks and is home to many investment banks, accounting and law firms. Brookfield Place, at 161 Bay St., continues to command the highest office rents of any building in Canada at $76.54 per square foot. The average market rent in Toronto is $34.82 per square foot. (Bay St. looking north from Front St. shown in the image,)

 

2. 8th Avenue SW, Calgary, $59.06 per square foot

 

8th Avenue SW again has the highest average gross office rents in Calgary. Large vacancies and availabilities along this corridor typically account for significant activity and command market-leading rates. Large oil and gas companies have historically clustered around the central business district in this area. The top rent on the street is $64.40 per square foot and the average market rent in Calgary is $46 per square foot.

 

3. Burrard Street, Vancouver, $58.87 per square foot

 

Burrard Street has dropped to third place despite a slight increase in average asking rent from $58.47 in 2013. Approximately 18.3 per cent of downtown class-A office supply is located on Burrard Street between West Georgia Street and Canada Place.

 

The vacancy rate in these six buildings sits at 1.6 per cent, which justifies this location commanding some of the highest rental rates in the city despite the impending influx of new supply that’s putting downward pressure on rents throughout the central business district.

 

The top rent on the street is $66.06 per square foot and the average market rent in Vancouver is $38.81 per square foot.

 

4. Albert Street, Ottawa, $52.10 per square foot

 

Albert Street remained in fourth position with average rents decreasing slightly from $53.40 per square foot. Albert Street is mainly home to government-related office towers, including numerous foreign embassies, and a few of the largest Canadian business law firms.

 

There seems to be a wait-and-see approach in anticipation of the 2015 federal election regarding the government’s intentions to lease or return more space to the market. The top rent on the street is $53.54 per square foot and the average market rent in Ottawa is $30.90 per square foot.

 

5. 101st Street NW, Edmonton, $46.71 per square foot

 

The average asking rent dropped from $48.19 per square foot, but 101st Street NW is expected to remain the most expensive in Edmonton with the recent commitment to build the arena district, a large-scale, mixed-use project incorporating the city’s new National Hockey League arena. This is expected to revitalize some of the most important corners on the street. The top rent on the street is $54.15 per square foot and the average market rent in Edmonton is $28.30 per square foot.

 

6. René-Lévesque W, Montreal, $44.28 per square foot

 

The average gross rent on the street hasn’t changed significantly year over year, but the total value of tenant inducement packages has nearly doubled. The most expensive building on the street (1250 René-Lévesque W) rents for $52.76 per square foot but has seen some downward pressure of two to four dollars on its net rent due to 170,000 square feet of vacant space left behind by Heenan Blaikie. The average market rent in Montreal is $30.38 per square foot.

 

7. Upper Water Street, Halifax, $36.42 per square foot

 

Upper Water Street has maintained seventh place despite its average asking rent dropping from $36.65 per square foot last year. New construction coming on stream is expected to put downward pressure on rents in existing office buildings. The top rent on the street is $36.62 per square foot and the average market rent in Halifax is $27.44 per square foot.

 

8. Portage Avenue, Winnipeg, $35.67 per square foot

 

Portage Avenue held strong in eighth place, with its average rent increasing from $35.17 per square foot. The class-A market remains tight and is expected to remain so through 2015. The top rent on the street is $37.32 per square foot and the average market rent in Winnipeg is $23.62 per square foot.

 

9. Laurier Boulevard, Québec City, $27.50 per square foot

 

Laurier Boulevard held its ninth-place position despite the average rent dropping from $28.14 per square foot. There’s been no notable increase in the average gross rent and the vacancy rate on the street remains low at 5.2 per cent compared to the rest of the market’s 7.8 per cent. The top rent on the street is $28.98 per square foot and the average market rent in Québec City is $21.89 per square foot.

 

JLL manages more than 50 million square feet of facilities across Canada and offers tenant and landlord representation, project and development services, investment sales, advisory and appraisal services, debt capital markets and integrated facilities management services to owners and tenants.

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Look at the "average market rent" per city. The differences observed between the major cities are amazingly small. How can this be explained? Also of interest is the top to average ratio per city, eg. Toronto $76.54/$34.82; Montreal $52.76/$30.38. --Awaiting comments from "experts".

 

And btw, I have always found Albert st. in Ottawa to be pretty dull, if not ugly, so I guess its "value" is derived primarily from its close proximity to centers of power such as the NHQs (National HeadQuarters) of federal government departments and agencies. Hopefully, the arrival of the downtown underground rail tunnel (which will replace the endless procession of city buses passing on the street) will enable some much needed beautification at ground level.

Edited by Né entre les rapides
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I would be curious to know the différences on commercial taxes beetwen each cities. Maybe Montréal is offering a better deal in terms of square foot average but loosing it's advantage with the high taxes.

 

Because if the price is much better in Montréal than in Toronto or Calgary, per example, it should be more interesting for national companies to set office here, I think so !

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Because if the price is much better in Montréal than in Toronto or Calgary, per example, it should be more interesting for national companies to set office here, I think so !

 

I do not believe that office rental rates are a significant factor in determining the location of a national head office. Proximity (being where the action is) and provincial personal income tax differentials are surely more important. In addition, history and tradition also matter for some, while language (not only for working but for education and general environment) can also be a consideration in the particular case of Montreal.

 

Taken together, I would expect that the above factors explain most of the current geographic location of companies' headquarters across Canada.

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I would be curious to know the différences on commercial taxes beetwen each cities. Maybe Montréal is offering a better deal in terms of square foot average but loosing it's advantage with the high taxes.

 

Because if the price is much better in Montréal than in Toronto or Calgary, per example, it should be more interesting for national companies to set office here, I think so !

 

malheureusement ce n'est pas le cas. Les compagnies préfèrent payer des gros loyers pour être dans les endroits stratégiques (Toronto, Calgary) au lieu de payer un peu moins chers et venir s'installer à Montréal. Comme je disais lors de la réunion vendredi dernier, le problème à MOntréal est que nous avons beaucoup de difficultée à attirer des nouvelles compagnies ici...c'est toujours les mêmes compagnies qui se déplacent d'une tour à l'autre. Nous devons attirer des compagnies de l'extérieur de la province, mais avec toute les inconvénients de Montréal, les compagnies rpéfèrent s'installer ailleurs!

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1. TAXES PROVINCIALE

2. TAXES MUNICIPALE

3. BUREAUCRACY

4. LANGUE

4a - Difficulté d'avoir une main-d'oeuvre bilingue

4b - Difficulté d'attirer des unilinge anglophones (re 1,2,3,4a)

 

Je suis d'accord avec toi sauf pour le 4a, je crois que Montréal est mieux placé que la plupart des autres villes pour de la main d'œuvre bilingue (avec Moncton).

 

Par contre le prix beaucoup plus élevé du pied carré dans les édifices de Toronto doit constituer un inconvénient car si l'On parle strictement d'argent, alors que ce soit les taxes municipales qui soient élevés ou le prix du pied carré.....à la fin ca fait monter le prix d'une façon ou d'une autre, non ?

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