Vacancy rates in downtown Montreal’s Class A and B office buildings has risen to 9.0 per cent over the first half of 2015, while availability rates spiked to 15.5 per cent, according to Newmark Knight Frank Devencore’s recent Real Estate Market Study.
Research suggests that the availability increase is a result of 1.4 million square feet of new office space in the market. Meanwhile, tenants are demanding brick-and-beam spaces in redeveloped industrial properties, while also looking to reduce the amount of space that they lease. Tenants are also relocating offices due to cost and the opportunity to renew their brands.
“High availability rates tend to give the market an added spark,” said Jean Laurin, president and chief executive officer of Newmark Knight Frank Devencore. “Landlords are motivated to secure transactions with solid tenants, and those landlords who have the most amount of vacant space have the greatest motivation. As a result, the opportunities for tenants to secure advantageous lease transactions are more plentiful than they have been in a number of years.”
While the collapse of global oil prices are driving high vacancy rates in places like Calgary and Edmonton, Laurin adds there is a “buoyant mood” in Montreal as major infrastructure work in the city is underway.