Yuppies spark demand for downtown commercial

by Caitlin Nobes27 Apr 2012

"In general, the flight to the suburbs is not expected to happen for most (business) organizations as the competition for young talent continues to heighten and firms continue to look at opportunities in close proximity to Union Station," reads the spring 2012 office market report from Colliers International. "As the Finance, Insurance, and Real Estate (FIRE) sectors continue to be strong in Toronto, there will be downward pressure on commercial vacancy and upward pressure on rental rates"

That growth is being driven by the continued increase in condominium development downtown.

Downtown developments -- a Mecca for talented young workers -- make up more than half of current construction, with 1.5 million square feet currently under construction, out of the 2.5 million square feet across the GTA.

“Downtown has increasingly become a popular living destination for many young professionals, who want to live in close proximity to their workplaces,” the report says. “The City of Toronto has more construction cranes building high rises and skyscrapers than any other North American city and nearly triple the amount in New York City.”

Developments are continuing despite tightening lending policies at banks and some condominium developers asking for larger down payments.

Convenient transportation remains crucial and locations near Union Station are highly sought after, especially in light of the upgrades expected to be done by 2016.

The report suggests other parts of GTA will remain stable, or grow. GTA East, including Scarborough, Pickering and Oshawa, is likely to see growth as tenants needing options for sites larger than 30,000 square feet look towards these regions, the report says.

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