Skyline Review
As it stands, total vacancy in the CBD’s Skyline sits at 11.6 percent and is forecasted to peak
above 13.0 percent over the next 24 months. Since the end of 2012, the CBD has been
experiencing significant negative absorption caused by space rationalization exercises from
tenants, large blocks of space being relocated to the Midtown submarket and increased
sublease availability. Given these factors and recent new construction, we anticipate tenant
favorable conditions in the CBD to remain until at least the beginning of 2017.
ES
RIN
QU
14
E.
ANT
OIN
E
ME
DA
RE
OT
EN
MCG
ILL
TJ
NT
OI
RU
10
TA
1
L
ÉA
TR
NE
D
24
SC
DE
AV
E
8
RUE
ES
IEL
AC
W.
SF
AIN
AN
AN
AD
IEN
S-D
E-M
4
25
NE
ON
5
TA
G
NT
EV
NU
21
16
EM
1 Place Ville Marie
Suite 2121
Montréal, Québec H3B 2C6
Tel +1 514 849 8849
O
NT
VAN
C
www.jll.ca
ES
CA
TH
TE
ES
AIN
RU
RU
E
22 PEE
ON
AV
E
W.
INE
ER
17
7
RU
AM
Francois Letourneau
Associate
[email protected]
23
2
L
EL
S
TO
RO
NE
ON
LIP
R
VE
OU
ED
HIL
AIS
EM
DD
EV
AR
UL
BO
3
RU
EP
RW
.
AC
For more information please contact:
Thomas Forr
Research Manager
[email protected]
IGE
UV
E
OK
RO
RB
HE
ES
RU
19
20
PL
NT
UR
Y
Y
6
3
RE
LE
SIT
13
11
15
12
18
AU
RU
EB
ER
TL
AIN
NIV
AIN
RUE
DS
RU
EW
.
EU
BO
EV
AR
C
RU
UL
UL
UP
AR
SAI
BO
ED
ES
NU
RU
AV
E
RU
ES
AIN
TE
C
RI
EV
ER
EV
AR
DR
EN
EL
EB
AT
HE
RU
QU
E
EE
.
Montreal | Summer 2015
HW
Y1
0
2. 1 Place Ville Marie
11. 1981 McGill College
20. 1002 Sherbrooke W.
3. 900 de Maisonneuve W.
12. 2000 McGill College
21. 700 de la Gauchetière W.
4. 1250 René-Lévesque W.
13. 2020 University
22. 1155 René-Lévesque W.
5. 1100 René-Lévesque W.
14. 800 Square-Victoria
23. 525 Viger W.
6.
15. 1501 McGill College
24. 1190 av. des Canadiens-de-
600 de Maisonneuve W.
7. 1155 Metcalfe
16. 800 René-Lévesque W.
8. 1350 René-Lévesque W.
17. 630 René-Lévesque W.
9. 1360 René-Lévesque W.
18. 1800 McGill College
Montreal
JLL (NYSE: JLL) is a professional services and investment management firm offering specialized real
estate services to clients seeking increased value by owning, occupying and investing in real estate. A
Fortune 500 company with annual fee revenue of $4.7 billion and gross revenue of $5.4 billion, JLL has
more than 230 corporate offices, operates in 80 countries and has a global workforce of approximately
58,000. On behalf of its clients, the firm provides management and real estate outsourcing services for
a property portfolio of 3.4 billion square feet, or 316 million square meters, and completed $118 billion
in sales, acquisitions and finance transactions in 2014. Its investment management business, LaSalle
Investment Management, has $55.3 billion of real estate assets under management. JLL is the brand
name, and a registered trademark, of Jones Lang LaSalle Incorporated. For further information, visit
www.jll.com.
25. 0 av. des Canadiens-deMontreal
©2015 Jones Lang LaSalle IP, Inc. All rights reserved. All information contained herein is from sources deemed
reliable; however, no representation or warranty is made to the accuracy thereof.
MO
N
1. 1000 de La Gauchetière W. 10. 1010 de la Gauchetière W. 19. 1000 Sherbrooke W.
Y
AR
About JLL
Locations
CA
LG
AL
E
TR
9
Montreal Skyline Review
An analysis of the Montreal office market
Occupied floor
Direct vacant floor
Retail
Future available
Sublease vacant floor
Parking, Other unusable space
Montreal’s Skyline market is defined by A and AAA office buildings located in the Central Business District. The key
indicator for inclusion or exclusion in this competitive set is based on rent. The buildings in the Skyline consistently
achieve the highest net rents in the CBD. The current threshold for total full service gross leases is above $40.00
per square foot with newer product commanding over $50.00 per square foot.
75
70
65
60
55
50
45
40
35
30
25
20
15
10
5
Building name/address
Building status
RBA (s.f.)
Percent Leased
Average Direct Rent (Gross)
Year built/renovated
Landlord
1000 de La
Gauchetière W.
Existing
897,970
86.4%
$53.87
1992
Ivanhoé Cambridge
1 Place
Ville Marie
Existing
1,591,391
75.7%
$50.33
1962
Ivanhoé Cambridge
1250
1100
René-Lévesque W. René-Lévesque W.
Existing
1,005,756
81.2%
$52.39
1991
Oxford Properties
Existing
570,216
96.3%
$44.51
1986
Oxford Properties
KPMG
Tower
Existing
507,531
84.6%
$46.36
1987
Oxford Properties
Sun Life
Tower
Existing
968,297
96.4%
$43.24
1931
Bentall Kennedy
1350
1360
René-Lévesque W. René-Lévesque W.
Existing
535,124
89.4%
$36.82
2003
Canderel
Montreal skyline overview
Existing
401,772
87.6%
$37.71
2004
Canderel
1010 de la
Gauchetière W.
Existing
397,931
75.7%
$39.61
1968
Canderel
Laurentian Bank
Tower
Industrial Alliance
Tower
Existing
640,938
64.9%
$43.81
1982
Industrial Alliance
Existing
339,000
89.4%
$43.39
1985
Industrial Alliance
Intact
Tower
Stock Exchange
Tower
Existing
373,185
69.8%
$39.52
1973
Industrial Alliance
Existing
984,397
94.9%
$42.67
1965
Magil Laurentian
McGill College
Tower
Existing
406,296
91.2%
$56.64
1991
Polaris Realty
800
René-Lévesque W.
Existing
606,891
84.5%
$39.88
1967
Polaris Realty
TELUS
Tower
Existing
590,306
78.2%
$39.54
1962
Redbourne
3.0%
This demand for new LEED certified space is resulting in the largest construction boom
in over a decade. The CBD’s office market will see the completion of four new buildings
totaling 1.5 million square feet of space between 2014 and 2017. These new developments
are giving tenants additional eco-friendly alternatives to the CBD’s seven existing LEED
certified properties.
10.0%
10.3%
9.3%
6.0%
8.3%
7.3%
4.0%
2.0%
0.0%
2005
2006
4.1%
4.4%
2007
2008
7.1%
6.3%
11.6%
1.0%
1002
Sherbrooke W.
Existing
331,456
95.8%
$42.27
1990
Monit
700 de la
Gauchetière W.
Existing
925,825
97.8%
$40.96
1983
DREAM
CIBC
Tower
AIMIA
Tower
Existing
555,183
98.2%
$41.00
1962
Group Petra
Existing
240,425
45.6%
$51.87
2014
Kevric
Deloitte
Tower
Under construction
495,067
68.4%
$62.44
2015
Cadillac Fairview
Manulife
Tower
L'Avenue
Under construction
76,000
0.0%
$48.41
2017
Broccolini
Under construction
471,200
57.9%
$60.50
2017
Ivanhoé Cambridge
4.1%
2009
2010
2011
1.0%
1.9%
7.6%
6.0%
-0.5%
2013
0.6%
1.4%
-1.9%
-3.0%
2012
0.1%
-1.0%
-5.0%
2014
-1.6%
-4.1%
2005
2006
2007
2008
2009
-4.1%
2010
2011
2012
2013
2014
Q1 2015
Q1 2015
Skyline leverage
Skyline dominant sectors
Financial Services
5%
Professional Services
4%
11%
Legal Services
In the short term, the market is experiencing temporary pain as the vacancy in new towers
and second generation buildings will take some time to be absorbed. The competition
is increasing amongst landlords in the Skyline with nine out of these fourteen owners
having large blocks of contiguous space over 50,000 square feet available for lease.
This increased inventory of new, converted or existing buildings has created tremendous
opportunities for tenants to consolidate and find suitable office accommodations under
favorable market conditions.
Existing
268,862
94.7%
$43.75
1974
Monit
5.0%
14.0%
8.0%
1000
Sherbrooke W.
Existing
506,495
86.2%
$39.58
1989
Redbourne
Annual net absorption as percent of inventory
Direct vacancy %
12.0%
The Central Business District’s (CBD) office market is experiencing a structural shift in
demand caused by the desire from tenants to modernize, optimize and rationalize their
office space. The need to be more environmentally conscious and pressures to reduce
total occupancy costs are creating new leasing opportunities for tenants across the market.
However, these sustainable upgrades and space optimization exercises by office space
users have left big blocks of vacant space across the CBD’s Skyline.
Bell Media
Tower
Tenant-Favourable Market
36%
Neutral Market
Technology
11%
Public Institutions &
Governmental
Landlord-Favourable Market
Engineering & Resources
Others
14%
19%
2015
2016
2017