Waterloo-based BlackBerry announced in March that it had reached a deal to sell the majority of its real estate holdings.
Though it will continue to call Waterloo home, the mobile communications company is selling more than 4 million square feet of office space and vacant lands. The majority of the property is spread throughout the Region of Waterloo, with additional properties in Ottawa and Mississauga also up for sale.
Despite BlackBerry’s struggles, the development industry still has high hopes for real estate growth in Waterloo. As a result of overall growth in the tech sector, expansion of post-secondary universities and plans for new rapid transit networks, the region is thriving.
The fourth largest community in Ontario and the 10th largest in Canada, the Region of Waterloo’s population was approximately 530,000 as of 2011, and is expected to grow by about 200,000 new residents over the next 20 years.
“This is not a one-horse town and the reality of the tech sector here is that we have 30,000 employees in 800 companies,” Peter Whatmore, senior vice-president and executive director of CBRE Limited’s Southwestern Ontario division said in CBRE’s 2014 Market Outlook report. “In this mature market, I see opportunity ahead not anything that could be described as bleak.”
In December, the University of Waterloo acquired land and five buildings from BlackBerry for $41 million. The university will occupy three of the office buildings, while BlackBerry will lease back the remaining two for up to five years. The communications company also plans to lease back some of the space included in its March transaction, though a buyer has not yet been announced.
CBRE Limited reported that despite the return of office space to the market by BlackBerry, there was a healthy demand for office space in the region throughout 2013. The office transaction volume was 346,935 square feet in 2013, up from 150,000 square feet in 2012. Despite BlackBerry’s sale, the overall vacancy rate only rose 0.9 per cent in 2013.
The Region of Waterloo is focused on urban development, and is looking at ways to accommodate the population increase without creating greater congestion or environmental issues.
Progress is already under way. Rob Horne, commissioner of planning, housing and community services for the Region of Waterloo, told attendees of the Canadian Urban Institute’s Growth Plan talk this past March that the region has risen the challenge of growth management by creating transportation links between subdivisions and promoting good density in already built-up areas.
A Region of Waterloo report on Ion, the new regional rapid transit system, says that in 2003, only 15 per cent of development was occurring in existing built-up areas. By 2011, it was up to 50 per cent. Ion will connect the region’s cities — Waterloo, Kitchener and Cambridge — through a combination of separated light rail transit and adapted bus rapid transit.
The region is funding roads as well as transit, Horne said, noting that since much of the region is car dependent, making investments in both is crucial for its continued growth.
Another way that the Region of Waterloo is adding increased density is by encouraging development on brownfield sites, which has room for growth due to the area’s history as a manufacturing centre. The region has implemented incentives such as development charge exemptions and environmental site assessment grants for these lands.
There is already development underway on some brownfield sites, such as the Breithaupt Block, formerly home to an auto-parts manufacturer and now the site of Google’s newest offices in the Region of Waterloo.
Continued investment in transportation infrastructure and incentives for developers will continue to make the region an attractive place for residents to live and employers to invest.
Leah Wong is the online editor of Canadian Property Management.