Looking for new office space: five tips from the pros

Commercial realtor Avison Young predicts office vacancy rates in Mississauga and GTA West will rise slightly this year. With that in mind, here are some tips on how businesses can find new office space:

1. Know that you have a lot of options

Avison Young principal Brett Elofson told YourMississaugaBiz.com that Mississauga and GTA West offer a “plethora” of places to find a new office, ranging from Meadowvale and the City Centre downtown to the Airport Corporate Centre near Pearson.

While the office rental market isn’t causing landlords to be desperate for tenants, Elofson said the business is pretty healthy right now.

2. New buildings being built offer you more choice 

Larger tenants (more than 200 employees) are moving to new buildings because the rents are often lower. “There’s really not a big cost advantage to staying in older product right now,” Elofson said. “It can be easily rationalized on a cost basis to look at LEED or environmentally friendly buildings.”

In fact, Avison Young senior research analyst Anthony Hong said that demand here is so high a lot of local developers are building speculative new office buildings, assuming they’ll find tenants to occupy them.

“If you really dive into the stats, in new Class A properties, the vacancy rates are extremely low,” Elofson said.

If a company is looking for a new office building to be built for their company, Elofson said they should look at least two years for the planning, real estate and construction.

However, Hong said a lot of buildings will already be coming down the pipeline in 2013, which will lead to an overall slight increase in vacancies.

3. You can budget less space per employee than in the past

Avison Young says companies are seeking less space per worker – from 270 to 300 square feet for each employee in the past to 15o feet today. That reflects more open office spaces, smaller, more efficient furniture and technology advancements that allow for many people to work from home.

It’s important to have the technical and physical facilities needed to incorporate these employees, be it through speaker or video-phone enabled meeting rooms or the necessary software installed on staff computers.

4. Design is easier to take into account these days

Elofson said that companies are more receptive to using space planners, consultants and smaller areas than before. He said at Avison Young, principals are moving from a standard office size of 12 foot by 12 foot offices to 10 foot by 10 foot offices in a new building. “We’re having record profits, but there’s a move to efficiency,” Elofson explained. “In previous years, the more successful you were the more opulent you were with your real estate whereas today the more profitable you are it’s not necessarily reflected in the size of your office.”

5. It’s not always the rent, consider transit and other amenities

Elofson said businesses are generally willing to pay more to get more, especially in the case of Class A buildings. “Tenants are focused on employee commute times, restaurants and amenities like proximity to transportation,” he said. “Whereas rent is always a big driver, but (businesses ask) what else they’re getting for their money.”

Elofson also said that in Mississauga, the proximity to Pearson International Airport is considered an asset for a building. “Executives fly in and if it’s a five-minute taxi ride to their office, that’s a good thing,” he said.

 

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