New York City office space is usually one of the hottest comodities on the market – everyone wants to work and run a business in a city that’s as busy, with as many customers, a talented labor force and dozens of opportunities for growth, like Manhattan. But even with new buildings opening throughout the Big Apple – including World Trade Center One and Hudson Yards – it’s about to be passed in terms of office space volumes by a city to the north.
According to a recent report by Bloomberg News, Toronto will add more prime office space then any other city in the Americas by 2014, fueled by low borrowing costs and high demand. Traditionally Toronto has been at the core of the Canadian financial industry, much the way NYC is the core of the US financial industry, with firms such as Royal Bank of Canada as well as Deloitte & Touche LLC occupying vast amounts of space in Downtown Toronto. Toronto’s central location and high population – with over 50 residential towers being built within the past decade, an extremely educated labor market and developed downtown core – makes it an ideal place for both Canadian and multi-national firms to call home. One of the reasons for the growth in office space is demand from firms such as Google, who’s Canadian team operates in Toronto and is looking to expand even further in the city.
In 2012, Toronto’s space available only grew 100,000 sq. ft. and is operating at a vacancy rate of 5.1%, near historic lows. For comparison, the New York City office space vacancy rate is about 7%, with over 900,000 sq. feet of space being added this year, mostly attributable to the opening of World Trade Center One in the Financial District.
While New York City still leads the Americas as the leading center of commerce, Toronto appears to be growing consistently, and is posed to remain one of the premier business cities worldwide.