MONTRÉAL - In its Real Estate Market Study published today, Newmark Knight Frank Devencore reported that vacancy rates in downtown Montreal's Class "A" and "B" office buildings have fallen to 5.8%. Over the past 12 months, just under 585,000 square feet was absorbed, and there is approximately 2.7 million square feet currently available for lease and sublet. As has been the case for over a year, contiguous spaces greater than 25,000 square feet are increasingly difficult to find.
"Over the past 24 months approximately 1 million square feet of Class "A" and Class "B" office space has been absorbed, so in this post-recession period there has been considerable leasing activity," said Jean Laurin, President and CEO of Newmark Knight Frank Devencore. "As a result, the dynamic of downtown Montreal's office market is about to undergo a significant shift. Two new tower projects have secured anchor tenants: Deloitte LLP has signed on to the 514,000 square-foot Cadillac Fairview development that will be built between Windsor Station and the Bell Centre, and Aimia, which owns and operates Aeroplan, is the lead tenant in the Tour Aimia, which is part of an office tower and condominium complex under construction in the heart of the Quartier International. Other pre-development activity continues as well, with as many as three or four additional projects seeking anchor tenants before proceeding."
Across Canada, the combined Class "A" and Class "B" vacancy rate fell from 6.8% to 4.7% over the past year. Total vacant space in the country's major cities fell from 11.2 million square feet to 9.8 million square feet. At the same time, the total inventory of built space across the country increased by nearly two million square feet, due in large part to new office towers in Calgary and Toronto, which have both been experiencing a development boom.
"As we noted six months ago, the demand for top-tier space in Montreal has begun to severely limit tenant opportunities, and the two major tenancies we have seen announced over the past six months with Aimia and Deloitte speak to the need for new LEED-certified office space," Mr. Laurin said. "These new projects will begin to change the face of downtown Montreal and will certainly generate new leasing opportunities. However, because these projects are 2-3 years from delivery, tenants who have leases coming up for renewal over the next year or so should be strategizing now with their real estate advisors in order to take advantage of current and emerging opportunities. "
About Newmark Knight Frank Devencore
Devencore is the Canadian partner of Newmark Grubb Knight Frank, one of the largest real estate service firms in the world. Newmark Knight Frank Devencore is Canada's largest corporate real estate advisor and brokerage exclusively representing corporate, industrial and retail space users. With offices across the country, Newmark Knight Frank Devencore offers its global clientele comprehensive services that are individually designed to ensure executive real estate decisions are supported by effective strategies and professional execution. To learn more about our capabilities, please visit www.devencorenkf.com.
About Newmark Grubb Knight Frank
A part of BGC Partners, Inc. (NASDAQ:BGCP), Newmark Grubb Knight Frank is one of the largest commercial real estate service firms in the U.S. It brings together the strategic consultative approach to creating value for clients and leading position in the New York market that are hallmarks of Newmark Knight Frank; the complementary strengths of Grubb & Ellis in leasing and management, investment sales, valuation and capital markets services; and BGC's financial strength, proprietary technology, expertise in global capital markets and deep relationships with many of the world's leading financial institutions.
Newmark Grubb Knight Frank, together with its affiliates and London-based partner Knight Frank, employs more than 11,000 professionals, operating from more than 300 offices in established and emerging property markets on five continents. This major force in real estate is meeting the local and global needs of tenants, owners, investors and developers worldwide.
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