The number of vacant offices in the city center will continue to rise

The rate of vacant offices in downtown Montreal is already at a 20-year high, a study shows.

Posted at 6:00 am

Andre Dubuc

Andre Dubuc
The press

At worst, the city center’s declining attractiveness to service workers will help empty the equivalent of 11 skyscrapers like Place Ville Marie, according to a document released Friday by the Board of Trade of Metropolitan Montreal (CCMM).

This study concludes the previous one of February 25th, which focused on the new forms of work and consumption organization in the inner city. In particular, this involves the administration of surplus offices.

Thus, without accounting for other factors, downtown would have 107,550 square meters (or 11.4 million square feet) of excess office space. The downtown office vacancy rate, currently at a 20-year high of 15.8%, could rise to 21%. Before the pandemic, the rate was just 5.4%.

The city center is hit from two sides

First, the popularity of teleworking is negatively impacting demand for downtown office space. “By 2022, the introduction of hybrid working models will reduce the number of workers present in the city center every day by 19 to 25%,” says the document, the drafting of which was particularly inspired by a survey of 255 start-ups and SMEs.

The potential shock to office demand is likely to be spread over time, with about 7% of leases expiring each year, he points out.

Doubly bad luck, in this demand crunch, downtown new office towers are being delivered in the same period, adding a total of 147,000 square meters (or 1.58 million ft²) to the stock. . Think, among other things, of the new headquarters of the National Bank.

However, the CCMM believes the reality will be less dramatic as Montreal attracts foreign investment and some of the downtown businesses grow. However, the older office buildings, the so-called category B and C, suffer from this.

In order to limit the damage in the short and medium term, the chamber is active and makes proposals rooms and co., a virtual marketplace that will facilitate collaboration between companies with excess office space and companies looking for office space, especially SMEs and growing start-ups. The aim is to “expand the competitive advantages of the city center such as prestige and public transport connections and to revitalize jobs,” says the study.

Looks like “Save-who-can”

In the first quarter of 2022, large companies did not shy away from subletting large areas again, according to the real estate agency CBRE in its latest report on the market situation in the city center. The equivalent of two towers like 1000 de la Gauchetière is currently available for sublease in the business district. Laurentian Bank, increasingly managed out of Toronto, has released 10,800 sqm (or 116,000 sq ft) at 1360 René-Lévesque Boulevard West for sublease. Another example is Ottawa-based Shopify, which has subleased 11,350 square meters (or 122,000 square feet) of office space at 525 Viger Avenue West. “Several large offices have been vacated as companies attempt to downsize to create a flexible work environment,” explains CBRE.

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