The key to success in any market lies in meeting the expectations of the customers or consumers. The more proactive and responsive a business is in meeting the expectations of its target audience, the greater share it captures from the market ensuring dominance. Same is the relationship between the office space expectations of businesses and the commercial real estate owners in Toronto.
The office space expectations of businesses in Toronto have changed over the years and now for real estate investors it stands as a great challenge to meet those expectations in order to survive in the market. Both, the commercial real estate investors and the developers will have to understand and act according to the expectations of the businesses regarding their office space, otherwise all they will have is an empty building yielding nothing else than maintenance cost.
“Real estate experts agree that suburban office space will continue on being challenged in 2015 in Canada.” – Urban Land Institute
With an increase in urbanization and the preference of downtown over suburbs by the masses, businesses have also established their offices in the urban parts of the city. Thus, the most rudimentary expectations of a business is to find an office space that is located in downtown, contains all the elements that create a healthy work environment and above all which is easily accessible to their workforce that would eliminate the need for commute. Suburban establishments with vast spaces and cafeterias are no more on the wish list of businesses, so for commercial real estate investors and developers, downtown Toronto is the place where they have to meet the expectations of businesses.
Technological advancements and the increasing use of technology in business processes is another element that has greatly influenced the office space expectations of businesses, which in turn has influenced the commercial real estate in Toronto. The use of technology has led to efficient utilization of office space and now businesses require spaces that can allow them to incorporate and run agile technological solutions. The existing commercial real estate owners in Toronto face the challenge of making their existing office spaces more adaptive to efficient technological solutions; else, they will have to think of something totally out of the box when it comes to competing for tenants in the highly competitive market.
The cost of office space is undeniably one of the crucial components in the whole ‘expectation package’ of the businesses. The highly competitive market of Toronto makes the businesses to use every possible trick to survive – cutting cost is one of them. Businesses expect their office space to be the best in terms of its location and offerings whilst being within their budget. Hence, the commercial real estate owners in Toronto have to consider the fact that while making their office spaces more tailored to the need of businesses, they do not exceed the cost factor. If it happens, then the probability of receiving tenants will be the same as it would be with the office spaces that are not adaptive to expectations of businesses.
In addition to the office space expectations of general businesses, the expectations of medical offices have also changed, which again has a direct and grave impact on the commercial real estate of the city. Due to the budget deficit, the health care spending in Ontario will decrease this year, implying that medical offices will be going for cost effective office spaces instead of lavish spaces at their disposal. Similarly, the shift from being sole practitioner to multi-physician clinics is also one of the major factors that calls for efficient utilization of medical office space in Toronto. Ergo, the medical office space owners in Toronto will now have to consider development or redevelopment of office space from a different perspective, which might be on contrary to what they might have been doing in the past.
The ever increasing dynamic expectations regarding office space have and will continue on effecting commercial real estate of Toronto. The real estate developers and investors will have to reconsider their strategies and be creative in their approach to ensure that they meet the office space expectations of businesses successfully.