A Look Back on 2013 Tenant Trends
As 2013 draws to a close, we wanted to share our perspective on recent tenant trends in the Greater Toronto Area (GTA) this past year:
1. Compression of space:
Since the economic downturn of 2008, tenants are finding ways to do more with less. And even though the uncertainty seems to be dissipating, the trend towards efficiency of space continues to exist. Tenants are changing the way they look at their size requirements and starting to fit more people into less or the same square footage through hoteling, smaller work stations, more collaborative spaces and less private offices.
Our team recently represented a large European organization and successfully negotiated to relocate them from a 90,000 sq.ft. facility into 70,000 sq. ft. This particular client is keeping the same number of employees, but the company has found creative solutions to make these numbers work, including desk sharing between staff who are only periodically in the office and taking advantage of efficient work design and floor plans.
The movie Office Space (top photo) demonstrates an exaggerated view of a reduced workspace. While comedic, it’s far from the reality. A more accurate depiction is the photo on the bottom. Organizations are fostering collaboration through workplace strategy, supported by Human Resources, to ensure increase productivity for employees.
A recent article in the Globe and Mail demonstrates national insurance firms like Manulife Financial leading this trend. See link below.
2. Parking Needs:
Compression of space is having a direct impact on parking requirements in the GTA. Parking allocations are typically based on a ratio per square footage leased, but with tenants fitting more employees into less square footage, tenants need more parking to make the numbers work.
These days we are seeing tenants like Davis + Henderson, Ingram Micro and others requesting higher than the average 4 per 1,000 sq. ft. parking ratios and most landlords in the suburban markets are being challenged to come up with solutions to accommodate these needs.
3) Access to Transit:
Access to transit is becoming a paramount concern for tenants these days. Being on a major bus route or within close proximity to a GO or subway station is starting to look very attractive for two reasons:
1. It not only provides alternative options for employees to get to work, but it also helps alleviate some of the on-site parking needs. 2. It helps the younger, emerging talent living downtown gain hassle-free access to the suburbs.
Bank of Montreal and PWC are major organizations that started this trend by relocating into suburban buildings that offered superior transit accessibility via the TTC and GO Train/Metrolinx into and out of the downtown core.