Dream CEO: Nearly One-Third of Downtown Toronto Office Buildings Obsolete
Nearly one-third of downtown Toronto office buildings have become obsolete, says Dream REIT’s CEO.
“Probably 30 per cent of the space in downtown Toronto requires a tonne of money, a lot of investment and it’s questionable if you put the investment in that the building will be worth enough to justify it,” Michael Cooper told the Globe and Mail. “That’s what I mean by obsolete – when you put a lot of money in but you’re not actually going to increase the value.”
Many downtown office towers are obsolete because they have high operating costs and need an infusion of capital to make them attractive to tenants in today’s milieu, where tenants can be very selective.
When demand was much higher in 2019, tenants were happy to take what they could get in order to have a presence in the country’s financial capital, Cooper told the Globe. But today, nearly 20% of downtown office space is available for lease and prospective tenants can be choosy.
Monte Stewart serves as Content Director - Canada for Connect Commercial Real Estate.
Based in Vancouver, British Columbia, Monte provides daily news coverage of major Canadian commercial real estate markets, including Vancouver, Toronto, Montreal and Calgary. He has written about the real estate sector for various media outlets and Avison Young since the early 2000s.
In addition, he has covered sports, general news and business for several leading wire services and publications, including The Canadian Press, The Associated Press, The Calgary Herald, The Globe and Mail, Research Money, The Daily Oil Bulletin, Natural Gas World and The Toronto Star.
Monte is active in his community as a youth basketball coach and raises funds for such charitable causes as Movember.