The vacancy rate in the core currently sits at 3.3 per cent, but is expected to move past five per cent in early 2011 as several large blocks of space are vacated, according to commercial real estate services firm CB Richard Ellis.
Approximately 230,000 square feet inside the Sun Life Centre is slated to open up in January. It comes as a result of Sun Life Financial consolidating its operations on Preston Street and the departure of EDS Canada Inc., which was acquired by Hewlett-Packard in 2008.
Furthermore, significant blocks of direct and sublet space are being marketed at Place Bell, while a full floor at 45 O’Connor St. is available for sublease.
“Although this increase in vacancy is significant, do not expect downward pressure on rental rates in the short term,” CB Richard Ellis says in its quarterly office report.
“Traditionally a vacancy rate of less than eight per cent is still considered a landlord’s market. More over, the bulk of the vacancy exists in two large institutionally owned facilities and it is unlikely that these ownership groups will feel the immediate need to reduce rents to attract new tenancies.”
Instead, CB Richard Ellis suggests the building owners will sit on the vacant space and hope market conditions will quickly improve.
