The Globe and Mail has recently been analyzing conflicts in property management in major Canadian cities, and have started with their observations in Toronto. It would seem that the same bidding wars that characterize the housing market are also affecting the commercial market. Analysts see this as a highly unusual phenomenon, as these kinds of bidding competitions have not been seen in Toronto in quite some time.
As it stands, the amount of vacancy in B class office space is quite low: 3.7% when a balanced market requires 7-9%. Rental rates are increasing, but the accompanying space hasn’t been able to meet the demands of tenants. The forecast, however, calls for construction of office towers in the near future in order to alleviate the situation. With any luck, these bidding wars will die down over time.
Source: The Globe and Mail
