Gta Sublease Report May 2009
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c o l l i e rs i n t e r n at i o n a l
G TA S u b l e as e R e p o rt O F F I C E M A R K E T U P D AT E
|
M AY 2 0 0 9
Subleases by numbers During the month of May the growth of sublet space increased from 2% in April to almost 6%. All markets added new sublet space with Midtown (26% or 47,213 square feet) and GTA West (5.4% or 49,888 square feet) taking the lead. The total number of units available for sublease increased by less than 2% and now totals 424. As seen in April, with the exception of GTA East, all markets had more sublets at the end of May. Average unit sizes have expanded by 3% after they shrank by 7% in April. Larger units are predominantly found in suburban markets. The average asking net rent discount on sublet space compared to direct space at the end of May sits at 11% (12% in April) on average for the GTA. Both Downtown and GTA East continue to offer the largest discount of 18% and 16%, respectively.
# of Sublease Availabilities*
Sublease Size in sf - Mean
Total sf of Subleases
Remaining Term in months - Mean
Average Asking Net Rent psf
GTA
424
7,828
3,318,990
40
$15.43
Downtown
175
7,245
1,267,875
39
$19.58
Midtown
40
5,701
228,038
48
$15.29
GTA North
28
7,361
206,099
47
$17.47
GTA West
110
8,809
968,995
36
$13.64
GTA East
71
9,127
647,983
40
$10.87
* Note: For this statistic the smallest available units are considered. Any contiguous & divisible units are NOT included.
tRemaining
Term of Subleases in the GTA Office Market
Average Time on the Market of Available Sublease Space by Markets
The distribution of sublets by remaining lease term has stayed close to what was observed at the end of April. At the end of May, 48% of the sublease listings quoted a remaining term of three years or more, just 2% less than a month ago.
The average number of months currently available sublet space has been marketed continues to hover around 5 months. GTA North and GTA West averages decreased by a month, while all other markets’ averages hiked up marginally.
120
GTa West GTa east
81
76
80 # of Subleases
6.3
98
100
62
62
60 45
GTa Total
40
Downtown
20
GTa north
0 12 Months or less
13 to 24 Months
25 to 36 Months
37 to 48 Months
49 to 60 Months
More than 60 Months
5.4 5.0 4.6 4.1
midtown
2.9 0.0
1.0
2.0
3.0
4.0
SubleaseS by SIZE
2,500 - 4,999 sf 110 Listings 399,839 sf 27%
Most of the sublet listings remain to be of smaller nature as companies shed underutilized space to reduce rental expenses. Listings with a size range between 0 and 10,000 square feet continue to represent the majority of both the total square footage available for sublease (55%), and the number of sublet listings (70%).
0 - 2,499 sf - 99 Listings 157,851 sf 23%
25,000 sf or more - 12 Listings 368,592 sf 3%
www.colliers.com/toronto
5.0
6.0
7.0
Months
5,000 - 9,999 sf 91 Listings 631,990 sf 21%
10,000 - 14,999 sf - 54 Listings 644,153 sf 13% 15,000 sf - 19,999 sf - 36 Listings 617,690 sf 9% 20,000 sf to 24,999 sf - 22 Listings 498,875 sf 5%
GTA Sublease Report | May 2009 | Office Market Update
Availability Trend* Available office space increased between the end of April and the end of May at a much slower pace than observed in the prior period (0.3% versus 4%). As a matter of a fact, direct available space decreased by 1% or 130,000 square feet. Sublet supply on the contrary continued to increase by 5.9% or 180,000 square feet, similar to the growth rate observed in the period between the end of March and end of April. This suggests that landlords make direct available space more attractive to the few tenants in the market as they tend to offer more alluring tenant incentives than sub-landlords. By comparing central and suburban markets it becomes evident that central markets added more sublet space on both a percentage basis and in absolute numbers. Central markets increased by 7.3% or 98,000 square feet and suburban markets increased by 4.8% or 83,531 square feet. * in surveyed office buildings of 10,000 sf or more in size
available Sublease Space
17,415,607
4,244 Transactions 1,324 Professionals
16,683,207 16,734,711
16,000,910
16,000,000
16,046,126 14,856,566
14,563,318
14,243,451
14,348,510
13,889,803
14,000,000
13,330,296
12,000,000
available Space in sf
284 million sq. ft. under management
Contact information
18,000,000
10,000,000
22.8% 19.4%
20.7%
20.5%
21.7%
8,000,000
19.6% 17.4%
16.5%
18.0%
18.2%
18.6%
6,000,000 4,000,000 3,379,243
3,318,350
3,272,612
2,000,000
2,458,383
2,948,442
3,010,886 2,312,997
2,581,139
Q3 2008
Q4 2008
2,916,752
3,098,558
3,280,420
Q1 2007
Q2 2007
Q3 2007
Q4 2007
Q1 2008
Q2 2008
Q1 2009
apr-09
may-09
GTA CENTRAL MARKETS - ALL CLASSES: Q1 2007 - Q1 2009 + April + May Total available Space
8,000,000 7,385,492
available Sublease Space
% of available Sublease Space of Total available Space
7,077,431
7,000,000
7,113,418 6,440,408
6,483,507
6,480,440
7,308,562
7,378,814
John Arnoldi Managing Director Office Practice Group 416.777.2200 [email protected] Ian MacCulloch Vice President - Research Canada 416.643.3708 [email protected] Duerten Lindenbeck Senior Research Analyst 416.643.3764 [email protected]
6,439,544
6,391,543 5,888,260
6,000,000
available Space in sf
$220 million in revenue
% of available Sublease Space of Total available Space
20,000,000
To view this report online, visit www.colliers.com/toronto
5,000,000
4,000,000 20.0%
16.9%
3,000,000
19.9% 18.0%
18.0%
17.4%
18.0%
17.7%
1,161,438
1,258,564
Q4 2008
Q1 2009
18.5%
19.7%
15.8%
2,000,000
1,251,693 1,229,159
1,000,000
1,017,747
1,298,357
1,165,094
1,271,793
1,059,999
1,355,438
1,453,769
Q1 2007
Q2 2007
Q3 2007
Q4 2007
Q1 2008
Q2 2008
Q3 2008
apr-09
may-09
GTA SUBURBAN MARKETS - All Classes: Q1 2007 - Q1 2009 + April + May Total available Space
available Sublease Space
% of available Sublease Space of Total available Space
12,000,000
10,000,000
10,030,115 9,374,645 9,355,898 8,859,580
8,932,707 8,416,157
8,162,088 7,775,932
8,000,000
available Space in sf
19 offices in Canada
$6.1B Total transaction value
GTA - All Classes: Q1 2007 - Q1 2009 + April + May Total available Space
Colliers Fast Facts
6,000,000
7,791,643
7,908,966 7,442,036
21.2% 20.6%
19.7%
19.0%
19.5%
17.1%
18.0%
18.6%
18.6%
19.5%
16.8%
4,000,000
2,000,000
2,127,550
1,828,104
1,440,636
1,605,239
1,480,463
1,522,437
1,252,998
1,419,701
1,658,188
Q3 2008
Q4 2008
Q1 2009
1,743,120
1,826,651
Q1 2007
Q2 2007
Q3 2007
Q4 2007
Colliers International www.colliers.com/toronto
Q1 2008
Q2 2008
apr-09
may-09
To receive this publication electronically, please email [email protected] and specify “GTA Sublease Report” in the subject line. Colliers International respects your privacy. If you would prefer to be removed from this mailing list, please email [email protected] and specify “GTA Sublease Report” in the subject line. This is a research document of Colliers Macaulay Nicolls (Ontario) Inc., Brokerage © 2009. Questions related to information herein should be directed to the Research Department at 416.777.2200.The information contained in this report was provided by sources deemed to be reliable, however, no guarantee is made as to the accuracy or reliability. As new, corrected or updated information is obtained, it is incorporated into both current and historical data, which may invalidate comparison to previously issued reports. Colliers Macaulay Nicolls (Ontario) Inc., Brokerage © 2009 is an owner member of Colliers International, a worldwide real estate partnership with offices in the Americas, Europe, Asia, Australia and Africa.
G TA S u b l e as e R e p o rt O F F I C E M A R K E T U P D AT E
|
M AY 2 0 0 9
Subleases by numbers During the month of May the growth of sublet space increased from 2% in April to almost 6%. All markets added new sublet space with Midtown (26% or 47,213 square feet) and GTA West (5.4% or 49,888 square feet) taking the lead. The total number of units available for sublease increased by less than 2% and now totals 424. As seen in April, with the exception of GTA East, all markets had more sublets at the end of May. Average unit sizes have expanded by 3% after they shrank by 7% in April. Larger units are predominantly found in suburban markets. The average asking net rent discount on sublet space compared to direct space at the end of May sits at 11% (12% in April) on average for the GTA. Both Downtown and GTA East continue to offer the largest discount of 18% and 16%, respectively.
# of Sublease Availabilities*
Sublease Size in sf - Mean
Total sf of Subleases
Remaining Term in months - Mean
Average Asking Net Rent psf
GTA
424
7,828
3,318,990
40
$15.43
Downtown
175
7,245
1,267,875
39
$19.58
Midtown
40
5,701
228,038
48
$15.29
GTA North
28
7,361
206,099
47
$17.47
GTA West
110
8,809
968,995
36
$13.64
GTA East
71
9,127
647,983
40
$10.87
* Note: For this statistic the smallest available units are considered. Any contiguous & divisible units are NOT included.
tRemaining
Term of Subleases in the GTA Office Market
Average Time on the Market of Available Sublease Space by Markets
The distribution of sublets by remaining lease term has stayed close to what was observed at the end of April. At the end of May, 48% of the sublease listings quoted a remaining term of three years or more, just 2% less than a month ago.
The average number of months currently available sublet space has been marketed continues to hover around 5 months. GTA North and GTA West averages decreased by a month, while all other markets’ averages hiked up marginally.
120
GTa West GTa east
81
76
80 # of Subleases
6.3
98
100
62
62
60 45
GTa Total
40
Downtown
20
GTa north
0 12 Months or less
13 to 24 Months
25 to 36 Months
37 to 48 Months
49 to 60 Months
More than 60 Months
5.4 5.0 4.6 4.1
midtown
2.9 0.0
1.0
2.0
3.0
4.0
SubleaseS by SIZE
2,500 - 4,999 sf 110 Listings 399,839 sf 27%
Most of the sublet listings remain to be of smaller nature as companies shed underutilized space to reduce rental expenses. Listings with a size range between 0 and 10,000 square feet continue to represent the majority of both the total square footage available for sublease (55%), and the number of sublet listings (70%).
0 - 2,499 sf - 99 Listings 157,851 sf 23%
25,000 sf or more - 12 Listings 368,592 sf 3%
www.colliers.com/toronto
5.0
6.0
7.0
Months
5,000 - 9,999 sf 91 Listings 631,990 sf 21%
10,000 - 14,999 sf - 54 Listings 644,153 sf 13% 15,000 sf - 19,999 sf - 36 Listings 617,690 sf 9% 20,000 sf to 24,999 sf - 22 Listings 498,875 sf 5%
GTA Sublease Report | May 2009 | Office Market Update
Availability Trend* Available office space increased between the end of April and the end of May at a much slower pace than observed in the prior period (0.3% versus 4%). As a matter of a fact, direct available space decreased by 1% or 130,000 square feet. Sublet supply on the contrary continued to increase by 5.9% or 180,000 square feet, similar to the growth rate observed in the period between the end of March and end of April. This suggests that landlords make direct available space more attractive to the few tenants in the market as they tend to offer more alluring tenant incentives than sub-landlords. By comparing central and suburban markets it becomes evident that central markets added more sublet space on both a percentage basis and in absolute numbers. Central markets increased by 7.3% or 98,000 square feet and suburban markets increased by 4.8% or 83,531 square feet. * in surveyed office buildings of 10,000 sf or more in size
available Sublease Space
17,415,607
4,244 Transactions 1,324 Professionals
16,683,207 16,734,711
16,000,910
16,000,000
16,046,126 14,856,566
14,563,318
14,243,451
14,348,510
13,889,803
14,000,000
13,330,296
12,000,000
available Space in sf
284 million sq. ft. under management
Contact information
18,000,000
10,000,000
22.8% 19.4%
20.7%
20.5%
21.7%
8,000,000
19.6% 17.4%
16.5%
18.0%
18.2%
18.6%
6,000,000 4,000,000 3,379,243
3,318,350
3,272,612
2,000,000
2,458,383
2,948,442
3,010,886 2,312,997
2,581,139
Q3 2008
Q4 2008
2,916,752
3,098,558
3,280,420
Q1 2007
Q2 2007
Q3 2007
Q4 2007
Q1 2008
Q2 2008
Q1 2009
apr-09
may-09
GTA CENTRAL MARKETS - ALL CLASSES: Q1 2007 - Q1 2009 + April + May Total available Space
8,000,000 7,385,492
available Sublease Space
% of available Sublease Space of Total available Space
7,077,431
7,000,000
7,113,418 6,440,408
6,483,507
6,480,440
7,308,562
7,378,814
John Arnoldi Managing Director Office Practice Group 416.777.2200 [email protected] Ian MacCulloch Vice President - Research Canada 416.643.3708 [email protected] Duerten Lindenbeck Senior Research Analyst 416.643.3764 [email protected]
6,439,544
6,391,543 5,888,260
6,000,000
available Space in sf
$220 million in revenue
% of available Sublease Space of Total available Space
20,000,000
To view this report online, visit www.colliers.com/toronto
5,000,000
4,000,000 20.0%
16.9%
3,000,000
19.9% 18.0%
18.0%
17.4%
18.0%
17.7%
1,161,438
1,258,564
Q4 2008
Q1 2009
18.5%
19.7%
15.8%
2,000,000
1,251,693 1,229,159
1,000,000
1,017,747
1,298,357
1,165,094
1,271,793
1,059,999
1,355,438
1,453,769
Q1 2007
Q2 2007
Q3 2007
Q4 2007
Q1 2008
Q2 2008
Q3 2008
apr-09
may-09
GTA SUBURBAN MARKETS - All Classes: Q1 2007 - Q1 2009 + April + May Total available Space
available Sublease Space
% of available Sublease Space of Total available Space
12,000,000
10,000,000
10,030,115 9,374,645 9,355,898 8,859,580
8,932,707 8,416,157
8,162,088 7,775,932
8,000,000
available Space in sf
19 offices in Canada
$6.1B Total transaction value
GTA - All Classes: Q1 2007 - Q1 2009 + April + May Total available Space
Colliers Fast Facts
6,000,000
7,791,643
7,908,966 7,442,036
21.2% 20.6%
19.7%
19.0%
19.5%
17.1%
18.0%
18.6%
18.6%
19.5%
16.8%
4,000,000
2,000,000
2,127,550
1,828,104
1,440,636
1,605,239
1,480,463
1,522,437
1,252,998
1,419,701
1,658,188
Q3 2008
Q4 2008
Q1 2009
1,743,120
1,826,651
Q1 2007
Q2 2007
Q3 2007
Q4 2007
Colliers International www.colliers.com/toronto
Q1 2008
Q2 2008
apr-09
may-09
To receive this publication electronically, please email [email protected] and specify “GTA Sublease Report” in the subject line. Colliers International respects your privacy. If you would prefer to be removed from this mailing list, please email [email protected] and specify “GTA Sublease Report” in the subject line. This is a research document of Colliers Macaulay Nicolls (Ontario) Inc., Brokerage © 2009. Questions related to information herein should be directed to the Research Department at 416.777.2200.The information contained in this report was provided by sources deemed to be reliable, however, no guarantee is made as to the accuracy or reliability. As new, corrected or updated information is obtained, it is incorporated into both current and historical data, which may invalidate comparison to previously issued reports. Colliers Macaulay Nicolls (Ontario) Inc., Brokerage © 2009 is an owner member of Colliers International, a worldwide real estate partnership with offices in the Americas, Europe, Asia, Australia and Africa.
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