BEHIND THE DESK: KEY LEARNINGS FROM THE ......Colliers International excludes unequivocally all...

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BEHIND THE DESK:

KEY LEARNINGS FROM THE OFFICE MARKET

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Halifax, NS The Halifax Regional Municipality is the capital of the province of Nova Sco:a, Canada. Halifax is the largest popula:on centre in Atlan:c Canada and the largest city in Canada, east of Quebec City. Halifax is a major economic centre in eastern Canada with a large concentra:on of government services and private office companies. – Source HRM website

Population: 413,700 (2012 - Statistics Canada)

Atlantic Canada - Office Market

4Q 2012 Office Market Vacancy Rate: 10.28%

Class A inventory Class B inventory Class C inventory TOTAL:

2,747,611 SF 7,098,018 SF 951,205 SF 10,796,834 SF

Net Rent (Class A) Net Rent (Class B) Net Rent (Class C) Total ($Avg/]2):

$17.22/psf/YR $13.31/psf/YR $11.03/psf/YR $13.65/psf/YR

Addi:onal Rent (Class A) Addi:onal Rent (Class B) Addi:onal Rent (Class C) Total ($Avg/]2):

$12.22/psf $11.65/psf $9.69/psf $11.40/psf

All Data is approximate and calculated using average market variables. Source: TURNER DRAKE & PARTNERS


St. John’s, NL St. John's is the capital and largest city in Newfoundland and Labrador, and is the oldest English-‐founded city in North America. It is located on the eastern :p of the Avalon Peninsula on the island of Newfoundland. – Source hip://en.wikipedia.org/wiki/St.Johns




1,251,649 SF 1,247,502 SF 582,463 SF 3,081,614 SF




$10.04/psf $8.44/psf $7.57psf $8.44/psf




Saint John, NB Saint John, is the largest city in the province of New Brunswick, and the second largest in the mari:me provinces. The Fundy City was the first incorporated city in Canada and is situated along the north shore of the Bay of Fundy at the mouth of the Saint John River. – Source hip://en.wikipedia.org/wiki/SaintJohn




736,670 SF 1,171,762 SF 588,572 SF 2,497,004 SF




$12.16/psf $9.03/psf $7.06psf $9.34/psf




Fredericton, NB Fredericton is the capital of the Canadian province of New Brunswick. The city is situated in the west-‐central por:on of the province and is one of the main urban centres in southern New Brunswick. The Saint John River flows west to east as it bisects the city and provides the dominant natural feature for the municipality. – Source hip://en.wikipedia.org/wiki/Fredericton




936,605 SF 957,702 SF 303,811 SF 2,198,118 SF




$11.77/psf $8.91/psf $7.29psf $9.19/psf




Moncton, NB Moncton is a Canadian city located in Westmorland County in southeastern New Brunswick. Situated in the Pe:tcodiac River Valley, it lies at the geographic centre of the Mari:me Provinces. The city has gained the nickname "Hub City" due to its central loca:on and it’s role as the railway and land transporta:on hub for the Mari:mes. – Source hip://en.wikipedia.org/wiki/Moncton website

Population: 143,000 (Greater Moncton Area – 2012 Statistics Canada)



1,124,142 SF 1,575,038 SF 219,891 SF 2,919,071 SF




$10.91/psf $8.57/psf $6.38/psf $9.11/psf




OFFICE MARKET COMPARISON - CANADA

0.00%

5.00%

10.00%

15.00%

20.00%

25.00%

Metro Vancouver

Calgary Edmonton GTA GMA Halifax NS Moncton NB Fredericton NB

Saint John NB St. John's NL

Q4 2012 Vacancy Rate

$-‐ $5.00 $10.00 $15.00 $20.00 $25.00 $30.00 $35.00 $40.00 $45.00

Metro Vancouver

Calgary Edmonton GTA GMA Halifax NS Moncton NB Fredericton NB

Saint John NB

St. John's NL

Q4 2012 Class A Net Rental Rate

Source: Colliers Interna1onal


Q1 2013 OFFICE MARKET - UNITED STATES

USA OFFICE – Top Markets Metro Region Metro Inventory Metro Vacancy Rate New Construc:on (Sq/Ft) Class A Net Rent Washington 426,943,713 14.90% 1,903,564 $32.86 Chicago 317,412,093 14.75% 50,000 $27.26 Dallas 275,933,501 16.90% 1,745,969 $23.35 New York 449,451,243 13.90% N/A $43.76 Atlanta 220,969,906 17.11% 1,184,097 $22.18 Los Angeles 199,697,500 18.01% 2,076,600 $34.08 Houston 197,846,140 13.92% 9,260,804 $28.43 Boston 172,277,331 16.60% 4,971,116 $25.25 Detroit 165,859,227 19.00% 11,232 $22.88 Philadelphia 152,963,169 13.85% 322,005 $24.77 New Jersey -‐ Northern 137,463,824 15.54% 737,600 $26.36 Denver 137,406,045 13.30% 1,040,642 $24.06 Phoenix 131,029,713 20.52% 226,270 $23.32 Cleveland 123,501,205 12.57% 732,254 $21.08 Piisburgh 122,471,936 8.11% 1,684,374 $22.35 Bal:more 116,114,548 12.80% N/A $24.99 Minneapolis 112,805,021 14.34% 581,700 $13.80 Seaile/Puget Sound 112,739,651 11.47% 308,899 $33.31 Source: Colliers Interna1onal

Office Vacancy Rate

0.00% 5.00% 10.00% 15.00% 20.00% 25.00%

$-‐ $10.00 $20.00 $30.00 $40.00 $50.00

Washington

Chicago

Dallas

New

York

Atlanta

Los A

ngeles

Houston

Boston

De

troit

Philade

lphia

New

Jersey

Denver

Phoe

nix

Cleveland

Piisburgh

Bal:more

Minne

apolis

Seai

le/

Office Class A Net Rental Rates


OFFICE MARKET COMPARISON - UNITED STATES & ATLANTIC CANADA


Office Market Class A Net Rental Rates

$-‐

$5.00

$10.00

$15.00

$20.00

$25.00

$30.00

$35.00

$40.00

$45.00

$50.00


OFFICE MARKET COMPARISON - UNITED STATES & ATLANTIC CANADA


Office Market Vacancy Rates

0.00%

5.00%

10.00%

15.00%

20.00%

25.00%


Atlantic Canada Office Market

Q&A:

•  How has Atlan:c Canada's office markets performed over the past few years?

•  What are the projec:ons for:

•  Inventory levels?

•  Tenant demands?

•  Leasing rates?

•  Cap rates?

•  Do LEED & Green building prac:ces play a significant role in tenant demand and new build?

•  Are we seeing demand sa:sfied in St. John's, NFLD or will there be an oversupply as a result of the current development boom?

•  Are poli:cal policies to drive more office demand in downtown Halifax beginning to work or will we con:nue to see a hollowing of the core and much stronger growth in the suburbs?

•  What are the major trends in Moncton, Fredericton and Saint John, NB?

•  Is there any growth in tenant demand for greener buildings among new developments and upgrading of the exis:ng stock?


•  What is the current performance/status of all the Atlan:c Office Markets?

•  What do you an:cipate will be the future of the Atlan:c Office Markets?

•  What are tenants looking for from landlords today?

•  What are the challenges/benefits between downtown office space and suburban office space in each market?

•  Call centre industry update; how has it changed over the last few years?

•  How does Atlan:c Canada compete with the rest of Canada & Interna:onally?

•  Green buildings; does the investment pay off? LEED vs. BOMA

•  What has been the influence of pension funds in the development of office product?

•  Do poli:cal policies need to play a role in the office sector?

•  What will be the future of Class "C" office space in the Atlan:c real estate market?

•  What are the Federal and Provincial Government leasing challenges you face in the Atlan:c market?

Atlantic Canada Office Market

ADDITIONAL Q&A:

NEW BRUNSWICK SERVICES TEAM

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NEW BRUNSWICK

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Dir: +1 506 870 2707

Fax: +1 506 383 1202 Email: [email protected]

JEFF LEAMAN Commercial Sales and Leasing

Dir: +1 506 870 2703


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Dir: +1 506 870 2701


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Dir: +1 506 870 2700


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Dir: +1 506 870 2710


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BEHIND THE DESK: KEY LEARNINGS FROM THE ......Colliers International excludes unequivocally all...

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