Colliers’ Annual Market Outlook Breakfast Examines the Highs and Lows of the Waterloo Region Real Estate Market
Kitchener, February 27, 2014 – When it comes to the Waterloo Region commercial real estate market, “the only constant is change”, according to Karl Innanen, Managing Director of Colliers International Waterloo Region office. In a record year for attendance, the Waterloo Region office held their annual Market Outlook Breakfast this morning at THEMUSEUM in Downtown Kitchener. The presentation was centered around the theme of “change”, and drew an eclectic mix of developers, government officials, designers, architects, lenders and investors.
Innanen, one of the speakers at this morning’s event, commented, “The last 12 months have delivered some huge news items for the local commercial real estate market. We saw BlackBerry return an enormous amount of office space to the market as many feared could happen, but at the same time, we saw Google sign a lease for over 185,000 square feet of office space - one of the largest deals on record. I think current market polarities are leading to many questions about the Waterloo Region market, hence the record attendance we saw today.”
Speakers Ron Jansen, John Lind and Karl Innanen discussed driving trends in the industrial, office and investment market in the Region of Waterloo. Highlights from each section are below:
The Industrial Market
- Typical market indicators such as vacancy, average asking rates and absorption miss the subtleties of supply and demand in Waterloo Region.
- The Waterloo Region industrial market has ample supply, but not the right supply to meet market demand.
- Re-invention of functionally-challenged industrial buildings is as much a necessity as it is an opportunity.
The Office Market
- Workplace efficiency, mobile workforce and demographics continue to dictate demand for office space.
- Kitchener is benefiting the most from modern workplace trends, while Waterloo struggles with a flooded office market in the North and an Uptown market stifled by consistent and extremely low vacancy.
- As brick and beam office space all but disappears from the market after Google's recent 185,000-square-foot lease at The Breithaupt Block, downtown Kitchener is poised to see its first office tower constructed since 1991.
The Investment Market
- Waterloo Region investment sales totaled $764 million last year, a slight decline from 2012’s record setting year.
- REITs and institutional buyers accounted for 91% of national investment sales in 2013, pushing private investors out of the market.
- With few opportunities available for private investors, many are seeking value-add opportunities.