Cushman & Wakefield Canada

Part
01
of twenty-one
Part
01

Facility Manager Office Space Pain Points and Motivations

The complexity of pricing in facilities management purchases, the enormous diversity of brands and producers, and the limited time are important pain points for Canadian facilities managers when they try to make decisions about office space purchases.

Cost is More Than a Price Tag

  • Facilities Managers (FMs) are responsible for weighing more than just the rent/purchase price of office property; they must understand and justify maintenance, utility use, safety, lifespan, and a hundred other costs and potential costs associated with an office space.
  • North American (NA) marketing firms that target FMs benefit from front-loading such information, writing informative advertisements that address, or at least touch on, all the complicated costs involved in an FM's decision.

Thousands of Manufacturers, Products, and Companies

  • Being a good FM involves an understanding of all the vendors, manufacturers, and producers in a wide range of fields from construction companies to property management to cleaning and maintenance services and many more.
  • 31 percent of facilities managers admit to feeling like they do know enough about the manufacturers and other companies relevant to their work.
  • In fact, several marketing companies that target FMs have emphasized the value of educating FMs during sales meetings.
  • In fact, according to Wizard Strategies, FMs' are willing and eagerness to be educated by vendors, as they always strive to provide quality work and lower costs.

Not Enough Time

  • Aside from being responsible for making new decisions about office space, FMs need to maintain, upgrade, optimize and document existing facilities, all while often feeling understaffed and underappreciated.
  • An FM is busy with safety and utility management, making sure that the facility is in good condition, and taking care of compliance, which leaves them little time to search for new office space.
  • A lot of FM marketing firms make a point of encouraging efficiency and straight-to-the-point marketing for FMs.

Research Stratagy

Throughout our research we found documentation of pain points specifically experienced by Canadian facilities managers (as opposed to North American facilities managers more generally) to be somewhat sparse, although not nonexistent.

In order to produce the best research brief possible, we chose to include several general, North American sources. However, we made sure that each pain point mentioned could be confirmed by at least one Canada-specific source.
Part
02
of twenty-one
Part
02

CFO Office Space Pain Points and Motivations

Paint points in finding new office space in Canada include a shortage of supply, which leads to high prices and low availability, as well as long lease terms. Motivations include access to larger office space, improving the location for workers to commute, and improving the working environment.

Paint Points

Shortage of Office space and High Prices
  • Office vacancies have dramatically fallen in Canada's largest cities driven by strong office space demand from tech companies.
  • The office space vacancy rate in the center of Toronto has reached an all-time low of 2.7% in the last quarter of 2018, highlighting a chronic shortage.
  • This has led to a rise in prices between the third and the fourth quarter of 2018 of $2.5 per square foot to reach $35.37 per square foot.
  • Other large cities such as Vancouver and Montreal are showing the same trends with a vacancy rate of 3.8% for the former and a slightly higher rate of 9.4% for the latter in the same period.
  • In the third quarter of 2019, vacancy rates for office space fell even lower in Vancouver settling at 2.2%.
  • In terms of prices, Vancouver's rates are even higher than Toronto's at $37.2 per square foot, and are slightly lower in Montreal with prices averaging $22.76 per square foot.
  • The best products have seen their lease rates increase by over 15% year-on-year.
  • According to CBRE, this is due to demand for office space outpacing supply in Canada.
  • Given this situation, Canadian company managers have to spend long periods looking for office space to find their ideal fit.
  • Managers in charge of finding new office space for their company will also be faced with high prices.
Length of the Lease
  • A major issue facing some tech company managers is the length of the lease and negotiating a short one, with many landlords favoring long leases of up to 10 years or more.
  • Due to a historic low in commercial space vacancy rates, landlords have the upper hand in negotiations and can impose their terms to potential tenants.
  • A consequence of this market tightness is that long lease contracts of ten years are becoming standard, as well as high rates.
  • In some areas, landlords can even ask for 15-year leases.

Motivations

Better Location for Staff
  • Company managers in Canada are motivated to move offices to improve their location and shorten the commute for their staff.
  • This can be the case when the office is located far from the center and therefore not as convenient to commute to, far from restaurants and social spaces.
  • This can have an impact on recruitment when the office location is not convenient.
  • The main reason for moving offices downtown is the ability to find and retain talent as people are looking for short and easy commutes.
  • Cities such as Toronto have built tens of thousands of new residential units in their downtown area, which increases the number of workers seeking jobs in the center.
Larger Offices
  • One of the main motivations for finding new offices is to increase floor space to accommodate the company's present and future growth, as tech companies tend to grow rapidly.
  • Tech companies such as Shopify, Article, and Klipfolio have moved offices to accommodate more staff.
Creating Productive Workspaces
  • Tech companies executives can be motivated to look for new space to create their own unique fun and productive workspace.
  • In Canada, some of the companies that have moved and created unique work environments are Shopify, Article, Klipfolio, Sidewalk Labs and Slack.

Research Strategy

We could not find any sources referring to CFOs and new office spaces in Canada. However, we assumed that those paint points and motivations would be shared by any executive responsible for finding office space for Canadian companies and not necessarily the CFO. We also found that the current commercial real estate market is currently extremely tight in Canada due to a shortage of supply, which drives prices up and makes it difficult to find a lease easily. This challenge would apply to any employee from a company looking for office space in Canada, not specifically the CFO.
Part
03
of twenty-one
Part
03

Facility Manager Psychographics

After an exhaustive search through credible reports, it appears that there is not sufficient information available in the public domain to develop a psychographic profile of the typical facility manager in Canada.

Helpful Findings

Job Requirements That Can Also Be Seen As Character Traits

  • The professional factors that a facility manager provides the most importance to include: 1) improving productivity/efficiencies (79.04%), 2) health and safety (76.38%), 3) improving facility image (72.49%), 4) training/education of staff (64.71%), and 5) security (60.90%).
  • Regarding trust, 29.78% of facility managers have faith in their service provider to employ suitable supplies and equipment, while 42.65% of them designate a list of particular items and brands that can be utilized within the facility.
  • When selecting a service provider, a facility manager provides maximum importance to reputation (70.85%) and pricing (68.89%).

Essential Characteristics Of a Successful Facilities Manager

  • Although the source used to obtain the following information does not specifically concentrate on Canada, overall, the essential characteristics that make a facility manager successful are as follows:
  • Influencer: A successful facility manager should exhibit exceptional leadership quality to encourage their followers to succeed at reaching a common goal.
  • Passionate Problem Solver: They need to be able rectify issues, while also adoring the challenge of surmounting these barriers and coming up with solutions.
  • Thirst For Knowledge: Since the industry continuously fluctuates because of fresh technological developments as well as alterations to "the built environment ," a facility manager should have an interest in learning ways to evolve with these shifts.
  • Because of the versatile and alternating nature of facility management, facility managers need "to be flexible, go with the flow and adapt with these changes."
  • Also, a facility manager should have excellent people skills to duly and sensitively handle a broad variety of stakeholders.

Psychographics for Roles Similar to Facility Manager

  • Although the source used to obtain the following information does not specifically concentrate on Canada, overall, the essential psychographic traits are as follows:
  • The most common job title to which the following qualities have been attributed to is facility manager or head of security.
  • Some key psychographics include:


Research Strategy:

Our research began by locating profiles of facility managers in Canada, extensively using LinkedIn. After finding some profiles, we observed their interests, bios, and testimonials from co-workers. Our goal was to find personal information, and then identify commonalities in traits to extrapolate them as generic hobbies, motivations, etc. However, most of the profiles had limited information, and much of the details concerned professional and educational details.

Next, we searched for the social media pages linked to those profiles, including Twitter, Facebook, etc. Nevertheless, security settings restricted most of the profiles, and the few of them that we could access did not contain sufficient data to construct an overall category-specific psychographic.

Afterward, we consulted job posting sites such as Indeed, Glassdoor, among others, to find any requirements regarding personality traits. Additionally, we checked the salary scales provided by these websites, along with dedicated benchmarking sites such as Payscale. We attempted to observe the average income bracket for these roles to find the consumption/spending habits of that class from sources like Decision Analyst, Global Data, Big Commerce, and Mintel, among others. However, the income figures did not match the equivalent levels regarding the segments whose consumption habits we studied. Also, most of the data around spending and consumption habits were for the US market. Moreover, information related to factors such as consumption was not as granular as media consumption habits.

Finally, we scoured through facility management-specific sources, such as Building Magazine, Facilities Net, Canadian Facility Management & Design, CMM Online, Facility Care, etc. We aimed to find research reports, articles, expert blogs, etc. covering the current trends in facility management, hoping to identify the types of people operating in this domain. We also looked for slice-of-life profilings of successful facility managers, as well as any survey on facility managers' roles, besides professional stats. However, the information we came across concerned work-related areas, such as the average size of the team they managed, their area of importance, ways in which they allocated their work budget efficiently, among others.

Due to the limitations and challenges outlined above, we were unable to provide relevant information.
Part
04
of twenty-one
Part
04

CFO Psychographics

Canadian Chief Financial Officers (CFOs) have been less impacted by the general shift toward strategic duties in their role than other, global CFOs. They tend to be highly-educated, support small scale/local charitable projects (especially when allowed to take leadership roles in those charitable projects) and are more accessible to marketing, which front loads useful information, especially information regarding changing accounting practices and compliance. There does not appear to be much information available in the public space about the personal lives, interests, and hobbies of Canadian CFOs as a whole, but some insights emerged from looking at an informally gathered sample.

Education

  • Using the recent winners and finalists of the Canadian CFO of the Year award as a guide, Canadian CFOs tend to have both a CPA and an MBA.
  • This is supported by the results of a survey by CFO magazine of its readers.

Gender

  • The role skews sharply to male executives. As much as 82 percent of CFOs are male, according to a global pole.
  • An analysis of Canadian CFO of the Year candidates and winners broadly confirms this global trend as present in Canada.

Age

  • Globally, CFOs tend to range between the ages of 35 and 45.
  • An analysis of Canadian candidates and winners of the CFO of the Year award trends sharply older than this, but that is almost certainly a bias introduced by the tendency of winners of the national award to be experienced industry leaders.

Income

  • The average CFO salary in Canada is $132,897 in Canadian dollars.
  • This reflects global survey data that indicates that CFOs tend to make more than $100,000 USD.

Business Interests

  • Globally, CFOs have reported that their role has been evolving to be more strategic, turning the CFO into something of a "second-in-command" to CEOs in leadership and less of a "number cruncher."
  • This trend, while present in Canadian CFOs has been shown to be less pronounced, with only 47 percent of Canadian CFOs acknowledging this trend in their work (as opposed to 63 percent globally.)

Personal Lives

There is a dearth of large-sample-size surveys or studies of the personal lives of Canadian CFOs, so information about hobbies, spending patterns and family lives is unavailable in the public sphere.
  • However, a common theme that emerged in examining the private lives of CFOs, both generally and among Canadian CFOs, is a tendency toward supporting small/local charitable organizations, especially those that the CFOs either founded or in which the CFOs have achieved leadership roles.
  • A few examples include:
  • This observation should be considered an informal observation as opposed to hard psychographic data as it emerged from an examination of winners of the Canadian CFO of the Year award. Canadian CFOs, in general, may not reflect this trend. However, within the observed sample, the trend was very strong and very specific.

CFOs as Advertising Targets

  • Modern CFOs have expressed an interest in information-heavy advertising with an emphasis on accounting practices and compliance data.
  • This can be seen as a reaction to increased individual responsibility and liability that CFOs face in the wake of the American Sarbanes-Oxley Act (SOX) and the Canadian Bill 198 (sometimes referred to as Canadian SOX.)
  • These bills created a series of new personal liabilities for CFOs when signing off on financial filings made by their companies.
  • This increased personal responsibility has led to CFOs feeling a need to focus on compliance and procedural details in the way in which they engage with any new information.
  • This can be seen to be en especially powerful trend among Canadian CFOs, 63 percent of whom report that concerns over their ability to focus on strategic priorities because of concerns over compliance, controls and costs-related matters.

Helpful Insights

While not strictly demographic in nature, the following resources emerged during research and seemed especially relevant in examining the challenges of marketing to Canadian CFOs:
  • Although not Canada-specific, and an older article, this informative piece offers specific advice on marketing directly to CFOs and touches on strategies, pain points, demographics and more.
  • This article summarizes the results of a survey of the concerns and interests specific to Canadian CFOs and compares and contrasts their priorities to a global sample. (Unfortunately, the underlying study is not available from publicly accessible sources.)

Research Strategies

Your research team found a bounty of information about targeting marketing to CFOs generally and Canadian CFOs specifically. However, detailed, reliable information about the personal lives, interests, and hobbies of Canadian CFOs proved elusive. This is probably due to the specificity of the targeted demographic. While some studies exist focusing on CFOs generally or C-Suite executives (either generally or in the North American area) usefully segmented data that included personal information about Canadian CFOs does not seem to be accessible in the public sphere.
We began our research with Canadian business publications and North America-specific industry and business press sources, We had hoped to find an extant psychographic profile of Canadian CFOs or a psychographic profile of CFOs globally or in North America that segmented the data in a way that made it possible to isolate the Canadian CFOs. Unfortunately, neither a useful exiting profile emerged, nor did enough information to draw any useful conclusions about Canadian CFOs private interests or habits.

Next, we turned to marketing and market research sources. We had hoped to find enough data about Canadian CFOS to develop a profile from reports and marketing subject matter experts familiar with Canadian CFOs. To this end, we explored sources such as Markets and Markets, IBISWorld as well as marketing and business publications such as Marketing Sherpa, Fortune, Forbes and Business Insider. These sources provided many insights into successful marketing strategies that target CFOs and some data compiled about the interests and concerns of Canadian CFOs specifically. However, little information emerged about psychographic details such as hobbies and personal lives.

As a final strategy, we develop our own profile by gathering a list of Canadian CFOs and exploring their publicly accessible personal details. While no comprehensive list of Canadian CFOs exists in the public sphere, we did discover the "Canadian CFO of the Year" awards with provided a sample of high profile Canadian CFOs, even if we remained weary that as a sample of the whole, this list would be biased to more successful, more high-profile Canadian CFOs than the whole of the demographic. Using this list, we began to look at LinkedIn profiles interviews and other publicly accessible information about Canadian CFOs. Details about personal lives, interests, and pursuits remained scarce. On the whole, Canadian CFOs (and C-suite exes generally) seem to be quiet about personal pursuits in public profiles and interviews. While might be considered an informal observation rather than an established psychographic feature of Canadian CFOs, we did observe a trend toward mentioning personal, local and small scale charitable projects in which the CFOs were involved (i.e. library charities and animal shelter projects.) This has been noted above.


Part
05
of twenty-one
Part
05

Facility Manager Demographics

The typical facility operations and maintenance manager is male and aged between 45 to 64 male, white, based in Ontario, works full-time all year round, has a secondary school diploma or its equivalent, and earns a median salary of CAD 53,595 and an average salary of CAD 60,709. Further details have been provided below.

Age

  • The majority of workers categorized as "facility operation and maintenance managers" are aged between 25-64 years (90.71%), while only 2.77% (calculations below) are aged between 15 to 24.
  • About 6.62% (calculations below) are aged above 64 years.
  • In Nova Scotia, the median aged is 50.8% (calculations below).
  • In British Columbia, 54% of facility operation and maintenance managers are aged between 45-64 years, while 36% are between 25-44 years. (All calculations below)
  • In Eastern Ontario, 68.4% (calculations below) of the workforce under this designation is aged 45 to 64.

Sex

  • Males make up 77.87% of the facility operation and maintenance managers workforce in Canada, with females making up 22.23%. (All calculations below)

Education

  • 8.46% (calculations below) of those who work as facility operation and maintenance managers in Canada do not have any certificate, diploma, or degree and only 3.63% (calculations below) have a university certificate that is below bachelors.
  • 28.47% (calculations below) of facility operation and maintenance managers have a secondary school diploma or its equivalent while 13.31% (calculations below) have an apprenticeship or trades certificate.
  • 26.29% (calculations below) of facility operation and maintenance managers have non-university diplomas or certificates while approximately 19.83% (calculations below) have a bachelor's degree or above.

Race

  • About 87.48% of all facility operation and maintenance managers are whites, while 12.52% (calculations below) belong to a visible minority group.
  • There are 1,055 black facility operations and maintenance managers in Canada, which makes up about 1.83% (calculations below).
  • Facility operation and maintenance managers of Latin American descent make up 1.16% (calculations below) of this workforce, while 0.39% (calculations below) have multiple visible minorities.

Location

  • The majority of facility operation and maintenance managers are located in Ontario (40.14%), Quebec (14.76%), Alberta (15.1%), and British Columbia (15.46%). (All calculations below)
  • Other prominent locations for this workforce include Nova Scotia (2.54%), Manitoba (3.72%), Saskatchewan (3.72%), New Brunswick (1.86%), and Newfoundland and Labrador (1.51%). (All calculations below)

Income

  • The overall median income for this workforce is CAD 60,524, while the average income is CAD 73,307.
  • For managers with no certificate, diploma, or degree, the median salary is CAD 46,188 (median), while the average salary is CAD 51,480.
  • Managers with a secondary school diploma or its equivalent earn a median salary of CAD 53,595 and an average salary of CAD 60,709.
  • Facility operation and maintenance managers with apprenticeship or trades certificate, the median salary is CAD 73,088, while the average salary is CAD 83,320.
  • Managers with non-university diplomas or certificates earn a median salary of CAD 66,935 and an average salary of CAD 83,196.
  • Facility operation and maintenance managers with a university certificate below bachelor level earn a median salary of CAD 66,275 and an average salary of CAD 75,144.
  • Facility operation and maintenance managers with a bachelor's degree and above earn a median salary of CAD 68,075 and an average annual salary of CAD 81,198.

Employment

  • 71.94% of facility operations and maintenance managers work full-time round the year, while 2.65% work part-time all year round. (All calculations below)
  • 25.40% of this workforce work for only some part of the year. (All calculations below)

Research Strategy

We commenced our research into the demographics of the typical facility manager by searching to the Statistics Canada website as they publish occupation and industry-specific data. While we found data on the demographics of facility operations and maintenance managers, we found that it was taken during the 2016 Census. This workforce is defined as those who "plan, organize, direct, control and evaluate the operations of commercial, transportation and recreational facilities and the included real estate."

In search of more recent data, we looked through industry associations such as the local chapters of the International Facility Management Industry and PEMAC for reports that put the demographics of facility managers into perspective. These sources were not helpful as the data and information we found we centered around upcoming events, membership, and other general information.

We also looked through region-specific sources to see if they provided more recent data on the demographics of facility managers in their respective regions. However, we found that these local sources (here, here, and here) referenced the data from the 2016 census.

Due to the lack of more recent data on the demographics of facility managers in Canada, we have defaulted to the data presented from the 2016 census. Please note that we had to make use of the data categories tool at the top of the data tables page to extract the desired result. These result pages cannot be hyperlinked as they are not static pages and merely default to an error page. Additionally, the research team could not determine the home ownership and the family status of this workforce.

Calculations

Total workforce: 57,640

Sex

Education

Age

Race

Location

Income

  • Overall Median Income: CAD 60,524
  • Overall Average Income: CAD 73,307
  • No certificate, diploma, or degree: CAD 46,188 (median); CAD 51,480 (average)
  • Secondary school diploma or equivalent: CAD 53,595 (median); CAD 60,709 (average)
  • Trades Certificate: CAD 73,088 (median); CAD 82,320 (average)
  • Non-university diploma or certificates: CAD 66,935 (median); CAD 83,196 (average)
  • University certificate below bachelors: CAD 66,275 (median); CAD 75,144 (average)
  • Bachelors and above: CAD 68,075 (median); CAD 81,198 (average)

Employment


Part
06
of twenty-one
Part
06

CFO Demographics

Chief financial officers (CFOs) in Canada have at least a bachelor’s degree in the finance or accounting field, a Chartered Professional Accountant of Canada license and are required to have additional training in finance and business operations. The majority of CFOs in Canada are males.


Age and employment

  • The CFO Signals survey has been tracking CFOs in North America for the past 9 years. The breakdown of the region’s participating countries is U.S. (83%), Canada (11%), and Mexico (6%).
  • 60% of the CFOs between 41 and 50 years of age had previous work experience in financial planning and analysis.
  • 45% of CFOs that were 45 years old and younger, had previous work experience in the area of investor relations experience.
  • Those over 60 years old tend to have previous work experience as a controller while those over 55 years, probably worked as chief accounting officers, or in the area of internal auditing and operations.

Sex

  • In 2018, the number of Canadian women who held powerful management positions such as chief financial officer and chief executive officer and were top earners declined, when compared with 2013.
  • In fact, there were only 3 female CFOs recorded in 2018 for the Toronto Stock Exchange (TSX) 60 companies and this was a decrease from 8, in 2012.
  • This means that CFO positions in Canada are male-dominated.

Income level and location

Level of education

  • CFOs usually have finance or accounting degree, chartered accountancy qualification such as the Chartered Professional Accountant of Canada (CPA) license and/or master’s degree in business administration (MBA).
  • Rotman School of Business has reported that in 2014, 70% of CFOs belonging to the top 100 publicly-owned companies in Canada had an accounting designation while there was a decline in the number (24%) of those who acquired a Master’s degree.
  • CFOs also need to have experience in finance, business and operations.

Race

  • As of 2016, the number of women of color who hold the position of CFO in the U.S. was 11.8%, which was an increase from 10.2% in 2007.

Additional information

Global

  • As of 2016, the average age of a CFO is 50.7 years.
  • Fortune 500 companies have seen an increase in the number of female CFOs from 6.8% in 2006 to 13% in 2016.


Research strategy

Pre-compiled demographic information for CFOs in Canada was limited and proved challenging to come by. As a result of this, we were unable to provide information about race, home ownership and children for CFOs in Canada.
We began our research by first consulting reputable sources such as PWC, Deloitte, SpencerStuart among others to find survey reports providing information such as age, sex, income level, race, employment, location, home ownership, children, and level of education for the typical CFOs in Canada. We found some information from a survey which was conducted in North America (U.S., Canada, and Mexico) pertaining to the age and previous work experience of persons who are CFOs in the region. However, we continued our search because this information was limited and inclusive of other countries’ information.

Our second step was to look for Canadian government websites/databases like Statistics Canada in the hope of finding statistics about Canada’s employment. However, here we found a list of all the CFOs in Canada and that 61.4% of females and 70.1% of men were participants in the labor force. This method was unsuccessful because the information found was not sufficient or relevant enough to create a demographic profile for CFOs in Canada. We had hoped to find statistics that could be used to further direct our research or triangulate a response.

In our third approach, we searched for business news, articles, expert blogs and news hoping to find comments or interviews about CFOs in Canada, which could unearth valuable information including their education, expectations, lifestyle or even ethnicity. We thought this approach would be a success because these sources usually make reference to market/industry reports or surveys which are sometimes behind a pay wall but provide good insights. Information about education and sex was found using this method. We also used career/job search websites to provide salary information including regional/location averages.

Next, we decided to expand the scope to include helpful insights from the U.S. (and North America) because both the U.S. and Canada belong to the same region (North America) and are neighboring countries. We believed that there might be similarities in the demographic information surrounding CFOs. Here, we found information about race, age and employment. All information found was provided.

Part
07
of twenty-one
Part
07

Commercial Real Estate Marketing Trends: Canada

Commercial real estate marketing trends in Canada include the adoption of property technology, digital marketing tools, and virtual reality. Despite these current trends, the real estate industry is known for its relatively slow adoption of technology and will have to improve its adoption to guarantee its growth.

Property Technology

  • Property technology for marketing commercial real estate in Canada includes the use of AI, data optimization, online platforms, and the cloud.
  • These tools can be used to improve the listing, searching, selling and buying of properties.
  • They can also facilitate the transfer of deeds and mortgage brokering.
  • According to PwC, the Canadian property technology market has grown from a $4.6 billion industry in 2016 to $7.3 billion in 2018.
  • The adoption of property technology for commercial real estate marketing has increased and is due to grow further to target the millennial market.
  • Realtors can use technology to share screens and presentations with clients remotely, accept digital signatures, and make the most of apps such as Loom to conduct business and market properties.
  • Examples of companies that have embraced this trend are Colliers and Brookfield, who have partnered with technology companies such as Techstars or invested heavily in property technology.

Digital Marketing Tools

  • Real estate professionals are now using digital marketing tools that can greatly assist them in dealing with clients.
  • These include chatbots or digital assistant tools such as Microsoft's Cortana that can help determine important emails and remind realtors to reply to their customers.
  • Some AI tools can even analyze the tone of emails and whether clients are angry.
  • Chatbots such as IMRE's version can automatically respond through text and social media to simple queries and questions from potential clients instead of a realtor.
  • The use of these marketing bots is rising in the real estate space, with companies such as ListGlobally using two versions called ManyChat and Intercom.
  • Other tools can provide analytics related to website or Linkedin page visits.
  • These tools have the ability to respond to leads, nurture flows and attract new clients whilst realtors are busy visiting properties or closing deals.
  • Real estate experts have agreed that realtors and real estate marketers would have to adapt their digital resources to their clients or risk losing business to more tech-savvy competitors.
  • The adoption of such automation technology will be important to guarantee the growth of the industry.
  • The use of virtual or augmented reality is another trend that is characterizing the commercial real estate marketing in Canada.
  • This means that potential clients would be able to visit a property online and remotely, either through 2D media or using virtual headsets.
Part
08
of twenty-one
Part
08

Toronto Commercial Real Estate Companies

Three of the top commercial real estate companies in the greater Toronto area focused on office space are Dream Office REIT, Brookfield Property Group, and Cadillac Fairview Corporation.

Dream Office REIT

  • Dream Office REIT is headquartered in Toronto and is the top commercial real estate company in Canada in terms of office space with 23 million square feet in 2016.
  • The company's portfolio primarily comprises offices in central business districts and suburban areas in major Canadian urban centers.
  • Approximately 79% of the company's portfolio is located in Toronto and the surrounding area.
  • Dream Office REIT does not specialize in any specific industry. Some industries that lease office space from Dream Office REIT include government, medical, coworking, legal, recruiting, agriculture, and more.

Brookfield Property Group

Cadillac Fairview Corporation

Research Strategy

To select three of the top commercial real estate companies in the greater Toronto area that are focused on office space, we attempted to find a directly available list that has ranked such companies using an objective metric. Although we were not able to find any such source over the past 24 months, we did find one for 2016 that is based on the number of square feet owned, managed, and developed in Canada. We assumed these are still among the top companies in Canada, as they all show they are still operating in the country and in Toronto specifically. We selected the first three that were headquartered in Toronto and used the companies' websites to find the remaining information.
Part
09
of twenty-one
Part
09

Toronto Commercial Real Estate Outlook

The commercial real estate market in the Toronto and Greater Toronto area is expected to continue to be strong in 2020, specifically the industrial, multifamily and senior housing areas. Office spaces are expected to grow in development in the suburbs of Toronto, and the retail sector is not expected to sell well.

How Commercial Real Estate in Toronto is Expected to Grow

New and Upcoming Areas

Types of Commercial Real Estate Predicted to Sell Well

  • Industrial buildings are predicted to remain strong in 2020, and e-commerce warehouse buildings are also expected to get physically bigger. Warehousing and fulfillment are expected to be the top development opportunities in 2020, as an increase in customer expectations for same-day e-commerce deliveries drives demand for large-scale facilities that are near transportation routes and population centers.
  • The multifamily category is also predicted to sell well, because it offers affordable options that Canadians want, including co-living arrangements, traditional rental housing and moderately priced condos.
  • In addition, senior housing is considered one of the best bets for 2020 due to high demand. The industry is responding by providing options with a mix of flexibility, convenience, security and high-end amenities.

Types of Commercial Real Estate Predicted Not to Sell Well

  • The retail sector is predicted not to sell well in 2020, and this is no surprise considering the recent announcements of closings of well-known names in the retail sector. Regional malls, power centers and outlet centers are expected to be at the bottom of the list of development prospects in commercial real estate.
  • Retailers are expected to have a smaller footprint in the future, with some scaling down their storefronts to display available products, and others redeveloping their properties to include co-working offices, residential uses and community services.



Part
10
of twenty-one
Part
10

Costar and Commercial Real Estate

Costar's product solutions for the commercial real estate industry include CoStar Suite, CoStar Property, CoStar COMPS, CoStar Tenant, CoStar Market Analytics, CoStar Lease Accounting, CoStar Portfolio Strategy, CoStar Lease Comps, CoStar Lease Analysis, CoStar Mobile, CoStar Risk Analytics, CoStar Investment Analysis, CoStar Real Estate Manager, CoStar Brokerage Applications and CoStar Private Sale Network. An overview of these solutions has been provided below.

Costar's product solutions

Costar Suite

  • CoStar Suite provides all the information needed to find, analyze and value commercial real estate. It consists of CoStar Property, CoStar COMPS, CoStar Tenant, CoStar Lease Analysis, CoStar Lease Comps and CoStar Go.

CoStar Property

CoStar COMPS

  • CoStar COMPS provides "the industry’s largest database of commercial real estate sale comparables", so that one can discover what properties are selling for and come up with a fair price for both sellers and buyers.

CoStar Tenant

CoStar Market Analytics

CoStar Lease Accounting

CoStar Portfolio Strategy

CoStar Lease Comps

CoStar Lease Analysis

  • CoStar Lease Analysis simplifies sophisticated cash flow analysis. It allows one to key in cash flows and metrics, and create lease comparisons by "simply entering in proposal terms".

CoStar Mobile

  • The CoStar Mobile App provides all the real-time data and allows users to carry out several important tasks at their fingertips.

CoStar Risk Analytics

  • CoStar Risk Analytics makes the complications of risk analysis simple by providing users with the information they need to measure risk, design analytics, comply with regulations, manage portfolios, and be confident in their decisions.

CoStar Investment Analysis

CoStar Real Estate Manager

CoStar Brokerage Applications

  • CoStar Brokerage Applications provides brokerage firms with the professional tools they need to effectively manage their day-to-day business, such as CRM and commission accounting.

CoStar Private Sale Network

Research Strategy

We have provided general data for Costar because they do not specify how their solutions cater to the Canada demographic. The company has an office in Toronto, Canada, so we have assumed that these solutions also apply to Canada.
Part
11
of twenty-one
Part
11

Best Practices for Reaching Tenants

Two best practices for commercial real estate companies to market to potential tenants are to create all essential content for digital marketing. This would include a compelling property description, professional photography, beautiful videos, and maps showcasing the surrounding amenities. Additionally, another best practice is to digitally promote the commercial space effectively. This would include a laser like focus on the company website, an effective use of social media and use of commercial real estate listing sites, and use of paid online advertising with trade journals.

Create All Essential Content

  • A best practice for commercial real estate companies to market to potential clients is to create all essential content for digital marketing. This means that there should be a compelling property description, professional photography, beautiful videos, and maps showcasing the surrounding amenities.
  • A well-crafted commercial property description for a retail space should be concise and precise. Aim for 100-200 words. It should highlight key selling points, define who the property is for, and stay away from jargon and cliches. In essence, it should provide informative copy in a short and clear manner with key supporting statistics, without over explaining.
  • Photography goes a long way to effectively market a property. Photos should be carefully selected from work by a professional to highlight the absolute best aspects of the property. It’s difficult to truly convey what it feels like to be inside of a property. Hire someone who has experience doing so and any marketing efforts will benefit from it.
  • Videos, like photographs, can be a lens used to peek into the property and see how it is structured. Using great video content will highlight the key amenities referenced in the description, showcase the best elements of the property, and provide a visual reference for the floor plan. A great idea is to use drone videos to showcase the property from the air. This can beautifully capture the area to better understand the location.
  • Surrounding amenities within a trade area or neighborhood of the target property are critical to highlight. Create an interactive real estate map to display and reinforce as many of these details to help strengthen the value proposition for the property.

Promote the Commercial Space

Research Strategy

We were unable to find anything surrounding best practices for commercial real estate companies to market to potential tenants specific to just Canada, so we expanded to the United States. We assumed that there would be little difference anyway, given that digital marketing best practices would likely be very similar. We focused on best practices surrounding digital marketing as we found a joint study by Loopnet and Google done back in 2014 that surveyed tenants and investors in commercial real estate in the United States. Even then 59% said that they begin their commercial real estate search with an online tool or marketplace. 25% said they use a search engine to start their online search. Given the ubiquitous use of the internet, we extrapolated that this would only have increased.
Part
12
of twenty-one
Part
12

Best Practices for Reaching Landlords

A commercial real estate company appealing to landlords in Canada would do well to develop a robust content marketing strategy, appeal to optimism in the industry, and work on building and maintaining personal relationships with Canadian landlords.

Channel: Content Marketing Works

  • Content marketing, such as maintaining blogs, newsletters, and developing informative videos drives engagement from landlords who need a lot of information to do their jobs.
  • Canadian landlords engage with blog content and learn from experiences shared by other landlords and sources in related industries.
  • There are hundreds of Canadian firms that specialize in content marketing, many of which have experience in the real estate and commercial real estate fields.
  • Gauging success in content marketing is easy, as clicks and conversions can be tracked.

Messaging: Appeal to Optimism

  • The globally, commercial real estate stakeholders (including landlords, developers, etc.) expect the commercial real estate market to remain bullish.
  • Many landlords are requiring their own properties or otherwise shifting their models to capitalize on a "landlords market" in Canada.
  • Canada is seeing record tech job growth, a trend that is poised to continue, and landlords are keen to capitalize on this.
  • This is happening just as oil and other heavy industry jobs are flagging in Canada, making this a transitional moment with rare opportunities.
  • It can be difficult to gauge the success for a strategy such as appealing to optimism, but being aware of trends in a market is vital to garnering respect.

Channel: Build Relationships

  • Even in the modern technological and telecommunications age, real estate remains a relationship business.
  • Building up personal relationships and individual trust with landlords is key.
  • Many commercial real estate deals occur "off-market."
  • Attendance at conferences and other meet ups is vital to forming and building relationships with landlords.
  • Developing a robust contacts list and keeping in touch with parties in the industry creates a pool of resources for future dealings in the commercial real estate field and allows one to measure the success of the strategy by the number and utility of the relationships built.
Part
13
of twenty-one
Part
13

Commercial Real Estate and Social Media

The best social media platforms for Canadian commercial real estate companies to advertise are LinkedIn and Facebook.

LinkedIn

  • According to the Canadian Internet Registration Authority (CIRA), one of the most popular social media network in Canada for 2019 is LinkedIn. The channel ranked second with 35% popularity.
  • For 2018, based on CIRA, 45% Canadians engage in LinkedIn. At least once per week, 44% who read or search for information, content, posts, or comments from others, 13% who posts comments or content and 10% of Canadians who use LinkedIn, share or repost from other accounts or sources.
  • According to ShareLaunch, the most effective social media platform for real estate is includes commercial real estate is LinkedIn. Most of the companies, even business leaders in the world, use LinkedIn to advertise, gain more audiences and spread brand awareness.
  • Other Canadian experts and influencers which help promote commercial real estate use LinkedIn, John Crombie, working at Triovest, a heavyweight in Canadian commercial real estate has a total of 4,178 followers which includes LinkedIn. Crombie is one of the 20 influencers with big online followings or strong overall reputations within Canadian real estate.
  • According to Clutch, CAPREIT Apartments with 50% of commercial brokerage services is one of the top commercial real estate companies in Canada for 2019 reviews. CAPREIT has a total of 15,950 followers on its LinkedIn account.

Facebook

  • According to the Canadian Internet Registration Authority (CIRA), Facebook ranks first in the most popular social media networks in Canada for 2019. 77% of users are engaging in Facebook in Canada.
  • Based on CIRA, 80% of users is engaging on Facebook. At least once per week, 87% read or search for information, 39% post comments or content, and 37% of Canadians who use Facebook share or repost from other accounts or sources.
  • As Facebook is the world’s largest social network, it has the most extensive collection of brand pages and private groups in the world. This gives opportunities for real estate companies to advertise.
  • There are many (Facebook) real estate groups with thousands of members. Commercial Real Estate GTA, although it is stated that this group refers only to the Greater Toronto Area, has a total of 2,000 members who discuss all available properties around Canada. This group accepts commercial real estate companies and allows them to promote the company’s brand identity.
  • According to Clutch, Wealthsimple with 100% commercial financing, funding, and investment that is located in Toronto, is one of the top commercial real estate companies in Canada for 2019 reviews. On the company’s Facebook page, it has a significant advantage in spreading the company’s name, which it gained 85,563 likes and 88,623 followers.

Research Strategy

The team of researchers started by looking at articles, updates, and news about Canadians social media to look for information about platforms or channels that most Canadians were engaging. We gathered data from Clutch Top Reviews among other credible sources, focusing on the top companies that provide commercial real estate in Canada.
Part
14
of twenty-one
Part
14

Success Metrics

An analysis of Cushman Wakefield in the areas of marketing shows that its activities are comparable to its competitors. Full data is available in rows 7-10 in the attached spreadsheet and is summarized below.

Cushman Wakefield

Marketing Tactics

Social Media

  • Their YouTube channel has 3.16K subscribers and the most recent video is called "What's on the mind of Toronto's top business leaders?"
  • Cushman Wakefield has 70.3 thousand followers on Twitter and 33.9 thousand followers on Facebook.

CBRE

Marketing Tactics

  • In the early teens, CBRE launched “Client Advantage”, one of the first digital, social and print advertising programs which celebrated successful client outcomes.
  • The ads were featured around the world including the Financial Times, Les Echos, GlobeSt, Real Estate Alert and The Commercial Observer.
  • CBRE still uses case studies in its advertising campaigns.

Social Media

BGIS

Marketing Tactics

Social Media

  • In comparison to some of their competitors, BGIS makes minimal use of social media. While they make regular posts to social media, they have a small number of followers.
  • They have 1,045 followers on Facebook, 2,279 on Twitter and 27,620 followers on LinkedIn.

Colliers International

Marketing Tactics

Social Media

  • Collier International has 353,853 followers on LinkedIn, 980 followers on Facebook and 6,607 followers on Twitter.
  • On their YouTube channel, they have 425 subscribers and have produced sporadic videos, the latest 5 months ago.

Morguard

Marketing Tactics

  • Morguard also uses research and marketing reports, case studies and press releases.
  • They also communicate their many awards. For the seventh year in a row, Morguard received an excellence in marketing campaign award from the International Council of Shopping Centres ("ICSC")
  • Their tag lines in "Real Estate Potential. Realized."

Social Media

  • While Morguard posts regularly on Twitter, LinkedIn and Instagram, the number of followers is small in comparison to other competitors.
  • They have 523 followers on Twitter, 13,424 followers on LinkedIn and 2,609 followers on Instagram.

Avison Young

Marketing Tactics

Social Media

  • Avison Young posts regularly on Twitter and LinkedIn but only has 252 Twitter followers and 22,381 LinkedIn Followers.
  • They also have 413 subscribers on YouTube.


Part
15
of twenty-one
Part
15

Cushman & Wakefield Competitors, Part 4

Cushman & Wakefield emphasizes its established reputation, CBRE claims it is committed to client satisfaction, while Brookfield Global Integrated Solutions markets its corporate social responsibility and sustainability practices. For Brookfield Global Integrated Solutions, it was found that the company doesn't advertise in Ontario specifically. The attached spreadsheet has been filled with the available information.

Cushman & Wakefield

  • Cushman & Wakefield emphasizes the wide array of real estate types it leases and sells. Its main tagline for Ontario is "Helping clients transform the way people work, shop and live". The company also brings attention to its reputation and heritage.
  • Cushman & Wakefield appears to advertise its Ontario services through social media. It doesn't appear to use print or TV channels to advertise.
  • Cushman & Wakefield has multiple company social media accounts that are specific to certain areas, such as the Kitchener-Waterloo area. There, the company announces new real estate expansions and events.

CBRE Canada

  • CBRE advertises its services in Ontario, Canada by emphasizing their commitment to client satisfaction. The company emphasizes the importance of commercial real estate in Toronto and claims it offers "unmatched market knowledge" when it comes to commercial real estate.
  • CBRE doesn't appear to have social media accounts specific to regions. It operates social media accounts which are relevant to Canada as a whole. There, the company is sharing insights relating to the commercial real estate market in Canada, of which some are focused on Toronto and other parts of Ontario.

Brookfield Global Integrated Solutions

  • Brookfield doesn't appear to advertise its services specifically in Ontario. The company operates social media accounts which are specific to North America as a whole and doesn't even have a Canada-specific social media account. Because the company is headquartered in Ontario, insights specific to the company as a whole have been provided.
  • BGIS emphasizes the fact that it is one of the first companies to achieve the ISO 45001 certification. The company also claims it is the leader in the industry, when it comes to corporate social responsibility and sustainability. These are the fundamentals of the company's marketing, which is visible on social media. On other marketing channels, the company doesn't appear to be present.

RESEARCH STRATEGY

Cushman and Wakefield doesn't appear to advertise commercial real estate specifically, but rather advertises all of its services together. Brookfield Global Integrated Solutions doesn't appear to advertise its services specifically in Ontario, while there don't appear to be metrics that indicate the companies' marketing efforts are paying off (the companies haven't received large amounts of attention on social media and they haven't disclosed information surrounding the success of their marketing efforts). Here is how we approached this research:

We examined each of the companies websites, reports and press releases, where we aimed to find information surrounding companies' marketing efforts in the Ontario area provided by the companies themselves, but in case of Brookfield Global Integrated Solutions, this information wasn't provided. In case of Cushman and Wakefield, the advertising efforts focused on all of the company's services in Ontario, rather than commercial real estate specifically. The companies haven't published any information surrounding how effective their marketing efforts are, such as return on investment or similar metrics.

Next, we decided to search for third-party reports on the companies' marketing efforts, aiming to find external descriptions of commercial real estate marketing efforts specific to Ontario and estimates of the marketing effectiveness. To find this, we searched industry-specific local publications, such as Toronto Storeys and the Ontario Real Estate Association, but we found no relevant information this way. In these types of sources, appointments of marketing managers were mentioned, but marketing efforts weren't described in detail.

As the last resort, we decided to search interviews with the companies' CEOs and the marketing leadership. We aimed to find direct statements from individuals in charge of the company's marketing efforts. For these purposes, we searched local publications such as the Toronto Business Journal and Marketing Magazine Canada, but we found that the local CEOs haven't addressed marketing efforts in interviews, while the companies' marketing leadership hasn't participated in interviews and hasn't given public statements.

It is worth mentioning that we also went through lists of companies' commercial real estate located in Ontario, in order to find whether these have been mentioned on social media, but we found no mentions of companies' real estate properties on social media, which indicates the companies don't use social media to advertise each real estate specifically, but rather to advertise all properties altogether. Brokers don't advertise the properties on their social media accounts, but some companies' brokers are present on real estate networks such as Realtor.ca.
Part
16
of twenty-one
Part
16

Cushman & Wakefield Competitors, Part 3

A comparison of Colliers International, Morguard and Avison Young has been provided in columns F to H, rows 4 to 6 of the attached spreadsheet.

Summary of findings

Part
17
of twenty-one
Part
17

Cushman & Wakefield Competitors, Part 2

Rows 4 -6, columns C-E of the attached spreadsheet have been filled out with information about the competitive advantage, market positioning, and services offered by Cushman & Wakefield and its competitors — CBRE Canada and Brookfield Global Integrated Solutions (BGIS). The details are presented below and on the attached spreadsheet.

Cushman & Wakefield

Positioning
Competitive Advantage
Services

CBRE Canada

Positioning
Competitive Advantage
Services

BGIS

Positioning
Competitive Advantage
Services

Research Methodology

To find the information on the competitive advantage, market positioning, and services offered by Cushman & Wakefield and its competitors — CBRE Canada and Brookfield Global Integrated Solutions (BGIS), your research team started by examining the respective company websites focusing on the Ontario region. It turned out that only Cushman & Wakefield has a website dedicated to the GTA region, which includes most parts of Ontario. However, we had to rely on the marketing information these companies provide for the Canadian market because their headquarters are based in Ontario, Canada. In this regard, we examined the services these companies offer, how they position themselves through their messaging, and the unique attributes that make them stand out by analyzing the information they have presented on their website. Next, we conducted a thorough search through local marketing agencies and media outlets to check whether they have prepared content regarding the competitiveness of these companies. On that note, we also checked reviews of these companies on websites such as Trustpilot to uncover their advantages and disadvantages. We then aggregated all the information we discovered to create a competitive landscape of the three companies based on the services they provide, their positioning, and competitive advantages.
Part
18
of twenty-one
Part
18

Cushman & Wakefield Competitors, Part 1

An analysis of Cushman Wakefield in the areas of marketing shows that its activities are comparable to its competitors. Full data is available in rows 7-10 in the attached spreadsheet and is summarized below.

Cushman Wakefield

Marketing Tactics

  • Cushman Wakefield uses quarterly research bulletins for investors targeted by topic, sector and location.
  • They also have a website specific to southwestern Ontario. They also publish case studies for prospective clients.
  • Their tag line is "Welcome to the centre of what's next".

Social Media

  • Their YouTube channel has 3.16K subscribers and the most recent video is called "What's on the mind of Toronto's top business leaders?"
  • Cushman Wakefield has 70.3 thousand followers on Twitter and 33.9 thousand followers on Facebook.

CBRE

Marketing Tactics

  • In the early teens, CBRE launched “Client Advantage”, one of the first digital, social and print advertising programs which celebrated successful client outcomes.
  • The ads were featured around the world including the Financial Times, Les Echos, GlobeSt, Real Estate Alert and The Commercial Observer.
  • CBRE still uses case studies in its advertising campaigns.

Social Media

  • While CBRE Facebook in Canada has only 45 followers, CBRE corporate Facebook page as 594,518.
  • CBRE has 131.3 thousand followers on Twitter and 6.13 thousand subscribers on YouTube.

BGIS

Marketing Tactics

  • BGIS has pursued the strategy of being an award-winning company and then advertising these awards widely. In just one year, they posted five awards.
  • BGIS named 2019’s Top Corporation in Supplier Diversity.
  • BGIS Ranked one of Canada’s 50 Best Corporate Citizens for 2019.
  • BGIS Receives ISO 22301:2012 Certification — First of its kind within the Integrated Facilities Management industry.
  • BGIS Procurement Team wins big at Procurecon and Supply Professional 2019 EPIC Awards.
  • BGIS leads the way in Occupational Health and Safety Standards achieving ISO 45001 Certification globally.
  • Their tag line is "BGIS leads the way in".

Social Media

  • In comparison to some of their competitors, BGIS makes minimal use of social media. While they make regular posts to social media, they have a small number of followers.
  • They have 1,045 followers on Facebook, 2,279 on Twitter and 27,620 followers on LinkedIn.

Colliers International

Marketing Tactics

  • Collier International produces multiple Canadian research reports from 9 cities in Ontario.
  • Collier runs advertisements in Canadian business magazines.
  • Their tag line is "Firm of Choice in Real Estate Industry"

Social Media

  • Collier International has 353,853 followers on LinkedIn, 980 followers on Facebook and 6,607 followers on Twitter.
  • On their YouTube channel, they have 425 subscribers and have produced sporadic videos, the latest 5 months ago.

Morguard

Marketing Tactics

  • Morguard also uses research and marketing reports, case studies and press releases.
  • They also communicate their many awards. For the seventh year in a row, Morguard received an excellence in marketing campaign award from the International Council of Shopping Centres ("ICSC")
  • Their tag lines in "Real Estate Potential. Realized."

Social Media

  • While Morguard posts regularly on Twitter, LinkedIn and Instagram, the number of followers is small in comparison to other competitors.
  • They have 523 followers on Twitter, 13,424 followers on LinkedIn and 2,609 followers on Instagram.

Avison Young

Marketing Tactics

  • Avison Young has extensive marketing channels, including research and market reports and white papers.
  • There are extensive CEO interviews in print, as well as video and audio casts,
  • They also have extensive blog posts on their website.

Social Media

  • Avison Young posts regularly on Twitter and LinkedIn but only has 252 Twitter followers and 22,381 LinkedIn Followers.
  • They also have 413 subscribers on YouTube.


Part
19
of twenty-one
Part
19

Toronto Office Space Trends, Part 2

Three additional trends around the Toronto, Canada office space market include a rise in office leasing activity, a decrease in long-term leases and down-sizing of office spaces.

Rise in office leasing activity

  • There has been an increase in office leasing activity in Toronto, which had one of the lowest downtown office vacancy levels in North America in 2019 (less than 3%).
  • This rise in activity is driven by tech job growth in Toronto. The job pool for tech companies grew by 54% from 2013 to 2018 and according to CBRE’s 2019 Scoring Tech Talent report, Toronto is the fastest growing market in North America for tech talent.
  • Tech companies account for over a third of the demand for downtown Toronto office space, and 20% of the 9.1 million square feet of pre-leased space in new planned development. Moreover, tech companies are willing to pay more for streets, buildings or neighborhoods which have other tech companies that they can collaborate with.

Decrease in long-term leases

  • There is a general movement away from long-term leases, causing lenders to rethink office properties. According to someone interviewed by PwC, “Lease terms of seven years will not be seen anymore.
  • This trend is driven by the growth in co-working, with short-term leases becoming the norm. There are several benefits that come with short-term leases, including saving on costs and business agility.
  • The supply of co-working spaces in Toronto has grown by 14% over the past year, with demand exceeding supply. These spaces also account for 3.1 million square feet of office space in the city.

Downsizing of office spaces

  • Housing spaces have gradually been decreasing in size, and office spaces have started to follow suit. In the last 20 years, the amount of space needed for each employee has shrunk.
  • This trend is driven by technology, more flexible office spaces, saving on cost, as well as a millennial workforce which does not mind having smaller workstations. In addition, companies are not willing to "maintain big offices for managers who are rarely in them".

Research Strategy

We identified the trends by looking through key industry reports or the opinions of the major players in the industry, specifically in Toronto and Canada. We chose those that were included in at least two reliable sources.



Part
20
of twenty-one
Part
20

Toronto Office Space Trends, Part 1

With the vacancy rate being low and the demand being high, some trends impacting Toronto's office space are increasing rents, new construction of office spaces and a growing need for cooking of flexible workspaces.

Increasing Rent Rate

  • Toronto is in a buyer's market and with that comes landlords having the ability to 'name their price'. Now, properties that rent for $35 per square foot are now being leased for $40 and above. This trend is being driven by the increase in demand and shortage of office spaces.
  • A report from Avison Young shows that the number of vacant offices dropped while the rent rate increased and continues to do so. At the same time, the demand for office spaces is concentrated in Toronto West as well as the downtown areas. With this rate increase, and in the absence more office being made available, landlords are naming their prices.
  • Also, driving this trend is the high influx of tech companies coming into the city. According to the CBRE, more than 30% of the demand for office space in downtown Toronto is coming from tech companies, that have grown and now need to add personnel and by extension space. These companies are clustering, that is, wanting to be close to areas that are highly concentrated with other tech companies and have been willing to pay the price tag that comes with it.

New Office Construction and Pre-Leasing

  • The high demand for office space is driving the need for new construction. Toronto is projected to construct an additional 10 million square feet of office space with the next five years. This is expected to cushion the impact of the low vacancy rate in the market.
  • Tenants are now securing spaces before it is constructed. In fact, pre-leasing office developments are being completed 1 year away from the completion of construction.
  • The Ontario Teachers’ Pension Plan has pre-leased over 79,000 square feet for its upcoming head office. This scheduled for completion 2022. The TD Bank Group will be occupying 840,000 square feet based on a long-term lease. The Toronto Region Board of Trade will be renting plans to rent 90,000 square feet of space in the Menkes new developments.

Growing need for Flexible Office/Coworking Spaces

  • In Toronto, flexible offices or coworking spaces occupy 3.1 million square feet of space. According to one report, it has grown by 14% between July 2018 and the same period in 2019. This is being driven by the "strong entrepreneurial culture", together with the Millennial workforce.
  • Additionally, with the low vacancy rate being experienced in Toronto, the result is an increase in demand for office spaces. This then drives the need for more flexible office spaces. This issue will continue as tenants will be looking to expand in the downtown area.
  • In addition, small businesses are among the drivers of this trend. As their operations grow beyond their homes, they expand to commercial office spaces. However, instead of paying high rental prices, they opt to share space, especially since they are not always in the office.

Research Strategy

For each trend, we identified, we ensured that it was supported by key industry reports or the opinions of the major players in the industry, specifically in Toronto. Additionally, we used no less than three sources corroborating the findings or arguments of the other, thus confirming each trend.
Part
21
of twenty-one
Part
21

Canadian Office Space

The net absorption in the Canadian office space real estate market declined by 21.05% between 2018 and 2019, while it declined 12.38% between 2017 and 2019. The year-to-date absorption between the beginning of 2019 and the third quarter of 2019 was 4.94 million sq. ft. Further details have been provided below.

Net Absorption in Canada's Office Space Real Estate

  • In 2017, the net absorption in Canada's office space market was 6.38 million sq. ft. while the net absorption in 2018 was 7.08 million sq. ft.
  • Between the first quarter and third quarter of 2019, the net absorption of office space in Canada was 4.94 million sq. ft.
  • A report by CBRE Limited estimates that the net absorption in 2019 would be 5.59 million sq. ft. Based on this figure, the year-on-year decline between 2018 and 2019 would be -21.05% (calculations below).
  • Between 2017 and 2019, the net absorption declined by -12.38% (calculations below).
  • The overall new supply of office space in 2019 is expected to reach 3.77 million sq. ft. while the total office space under construction is estimated to reach 16.72 million sq. ft.
  • The office space vacancy rate in 2017, 2018, and 2019 is 13%, 11.9%, and 11.4%, respectively.

Research Strategy

To determine the volume of office space that was rented or sold in Canada we started our research from government sources such as Statistics Canada and the Ministry of Infrastructure to see if these sources published any relevant data on the subject matter. Our findings show that none of these sources published any data related to the volume of office space rented or sold in Canada. The only real- estate-related data available on Statistics Canada were about construction and housing.

Our next approach was to search through market research firms or companies that regularly publish data on the commercial real estate sector in Canada, especially the office space segment. We found multiple reports from companies such as CBRE Limited, Avison Young, and JLL. Our findings indicate that the prevalent metrics in these sources that could provide a measure of the office space sold was net absorption. These sources did not stipulate the volume of office space real estate rented or sold.

We found that net absorption is defined as "the net change in physically occupied space between the current measurement period and the last measurement period taking into consideration office space vacated and newly constructed office space in the same area during the same period." This definition means net absorption is a measure of the office space that was rented since it takes into consideration the net change in space vacated, newly constructed and then the space occupied. Hence, we have used net absorption as a proxy to express the volume of office space leased in Canada.

Calculations

2018-2019

  • Estimated 2019 net absorption: 5.59 million sq. ft.
  • 2018 net absorption: 7.08 million sq. ft.
  • Year-on-Year growth: [(This Year — Last Year) / Last Year] 100; [(5.59–7.08)/7.08] * 100 = -21.05%

2017-2019

Sources
Sources

From Part 08
From Part 11
From Part 14