A new Light Rail Transit system, a burgeoning and highly-educated population and the three-million-square-foot Blackberry real estate portfolio sale will make the Region of Waterloo one of Canada’s most dynamic over the next several years, says a new Market Outlook Report on commercial real estate by Colliers International.
“The Blackberry portfolio sale has been an incredible game-changer for Waterloo Region, and office users have options like never before,” said Karl Innanen, Managing Director, Colliers International Waterloo Region.
“Blackberry’s monopoly of the buildings in North Waterloo had pushed smaller office users out of both the leasing and buying market in that area. Now that space has come to market, users who want to position themselves by the future LRT route, the universities and the Research & Technology Park have the opportunity they’ve wanted for more than a decade. There is now a huge influx of product available to tenants,” he added.
Waterloo Region is among the most competitive office markets in Canada and leasing is happening because of few choices downtown and zero free parking options for employees, which impacts most leasing decisions. As a result, traditional downtown office towers are challenged to retain current tenants and struggling to attract new ones.
Innanen said, “Supply stimulates demand and this growth has spread to the industrial real estate sector as well, where Class ‘A’ space is in high demand and when buildings are erected, they fill quickly. Even property owners who modernize and improve ‘B’ class buildings have the opportunity to gain tenancies, while buildings with long-term vacancies continue to stay empty with better options available.”
“Tenants want what tenants want, and they are more than willing to pay for that ‘right’ space,” said Colliers International Vice President John Frezell. “There is a flight to productivity, to higher building efficiency, to employee retention and to creating culture. The culture is worth more than the lease savings they would get by going somewhere else.”
“For companies leasing office space, there has never been more opportunity,” added John Lind, Colliers International Senior Sales Representative. “They now have an opportunity to position their business along the planned LRT routes for ease of access for employees and clients and developers are seizing this opportunity to redevelop along those planned routes.”
Colliers International Market Outlook also says the real estate mantra of ‘location, location, location’ rings true for Waterloo Region. Ease of proximity to the GTA and major population centres throughout Southwestern Ontario, along with car parts manufacturers being close to Toyota, and ease of commuter and employee access to Highway 401, provides many benefits to the Region.
- Waterloo Region is known as Canada’s Technoligy Triangle (CTT). CTT partners with the cities of Cambridge, Kitchener, Waterloo and the townships of North Dumfries, Wilmot, Wellesley and Woolwich.
- Waterloo Region has access to over 2.7 million people within a 45 minute drive, and is an ideal gateway to markets around the world.
- Waterloo Region is home to Google, Desire2Learn, BlackBerry, OpenText, Sybase iAnywhere, Christie Digital, Sandvine, COM DEV, Dalsa, Agfa HealthCare.
- The City of Kitchener offers a comprehensive package of financial incentives known as the Kitchener EDGE (Encouraging Development for Growth Efficiency) to assist local businesses in successfully reaching their goals.
- Good parking, and access to public transit.
- Contains Waterloo Region’s largest urban office market.
- Almost equally divided between suburban and downtown market.
- Largest downtown market in Waterloo Region.
- Downtown Kitchener is undergoing revitalization.
- Prominent Brick & Beam node developing – former factory buildings converted into office buildings hosting information industry and art and design workspaces. Projects include 72 Victoria St S, the Tannery, and the Breithaupt Block, all located in the “Warehouse District” (also known as “innovation District”) which also includes The School of Pharmacy.
- Highest number of underground and covered parking garages in Waterloo Region.
- Highest vacancy rates in Waterloo Region.
- Lower CAM and taxes as compared to Kitchener and Waterloo.
- Relatively small market for the Region.
- Best access to Hwy 401 in the Region.
- High number of owner occupied buildings.