“The attractiveness of renovated warehouse space turned into chic office space is especially high amongst creative agencies and technology companies, who attract younger employees,” said John Arnoldi, the executive managing director for the Toronto brokerage of Colliers International. “Brick and Beam space, primarily found in the Entertainment District and Downtown West, is commanding gross rents in the $40 range, attesting to the appeal of these unique buildings.”
But while Colliers’ report offers tangible proof that this style trend has valid price implications, agents on the ground argue it’s not for every client.
“You’re not typically going to find bankers and lawyers going for that, but media and communications companies, the creative fields are looking for that,” says Alexandra Cozart, a sales rep in Colliers’ Toronto office. “(The trend) is going more open-concept, open-collaboration is more in-demand.”
Still, more businesses, even those outside of the creative field, are increasingly moving away from tall cubicles and old carpeting.
“It’s a change and it’s what employees are wanting,” Cozart says. “It’s (a look) that Allied (REIT) has done a lot with, in the Spadina area and the west end and it’s taken off.”
Further, the company said average rents for office spaces in Class A buildings in Toronto’s downtown core were about $16 to $20 more per square foot, compared to those buildings outside the core. Gross rents, meanwhile, were about $20 to $30 more per square foot.
Office vacancy rates in downtown Toronto fell to just 2.7 per cent during the first quarter of the year. The company said it expects that to remain low as demand for space in the core increases. The vacancy rate for the entire Greater Toronto Area also decreased, falling to 5.3 per cent for the quarter.
Commercial brokering is tough work, but a new report suggests those focused on an increasingly popular property type are winning higher commissions for their efforts.