Recently, eminent brokerage firm Jones Lang Lasalle performed research to find out whether or not office space located near transit areas is more valuable. The results, as one would expect, show that tenants value office space located near transit at a much higher rate. Eleven markets in downtown Toronto were studied, and the results showed that office space located within 500 meters of public transit have vacancy rates that are lower by 6.5% than the buildings outside of that radius (i.e. 5.6% vacancy as opposed to 12.1% in the areas outside the radius). In addition, the rental rate in these areas near transit was higher by 38%
JLL reports that this is, unsurprisingly, great news for landlords, but not so much for developers outside the densely populated Toronto downtown core. Due to the lack of public transit in those areas, development has yet to reach the levels of downtown in outlying regions such as Etobicoke South and Scarborough. The TTC and Go Transit lines were built originally to service growing employment in downtown Toronto but in recent years, employment areas have shifted heavily to suburban areas. This keeps them out of the reach of public transit, leading to the average GTA commuter spending 82 minutes travelling each day.
JLL also used the north Yonge Street corridor as an example of a previously public transit-limited area that has in recent years become a booming urban center. The proliferation of public transit lines near the Sheppard-Yonge, North York Center and Finch subway stations have made busy commercial hubs for the city’s northern terminus. Northam Realty Advisors, a real estate company in Northern Toronto, indicated that although subway expansion to Etobicoke, Brampton and Scarborough has failed, Vaughan might potentially be a success. With the planned expansion of the Yonge-University-Spadina line, Vaughan has the chance to be the next successful urban center in the GTA
Source: The Globe and Mail
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