Young Tech Firms: Flexibility Requirements in a Near Zero Vacancy Market

This spark report is first of the Colliers 2019 Tech Insights, a report series highlighting various aspects of the Greater Toronto Area’s technology industry.

 

There’s evidence of technology tenants rapidly expanding in the GTA, showing a 203% increase in the number of lease transactions year-over-year. This brings the GTA’s tech occupied footprint up to 18.7M SF, representing 9.4% of the region’s total office inventory.  

 

Startups and younger tech firms have limited bargaining power in today’s near zero vacancy market, impacting their ability to negotiate flexible lease terms. As a result, a concentration of young tech firms are influencing the rise in demand for flexible workspace options (coworking) and pushing for shorter lease durations in the GTA Central market. 

 

With lease durations only able to be negotiated so low, it’s more likely the popularity in flexible workspace options will continue to grow. In the upcoming quarters, the migration of young tech tenants from downtown into the midtown and suburban market is a reasonable assumption, with these younger tenants being mirrored by mature, suburban tech tenants moving their offices downtown.


Young Tech Firms: Flexibility Requirements in a Near Zero Vacancy Market

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Daniel Holmes

Senior Managing Director | Broker

Toronto Downtown

Daniel Holmes is now Senior Managing Director, Office Practice Group, Toronto Region. In his previous role as Senior Managing Director of Colliers Toronto North, he led the sales advisor team, as well as oversaw operations, recruitment, the Eastern Acceleration Advisor Development Program and strategic business development. Daniel’s track record of deeply understanding advisors and clients’ unique challenges and employing diverse strategies to solve them, combined with his experience building successful advisor teams, will be key in growing our office practice group and client base, and reinforcing our dominance in the GTA office sector.

Daniel began his real estate career with Colliers in 2002 as an office leasing broker and completed more than 500 transactions on behalf of national and international clients. Daniel consistently demonstrated a unique understanding of how to approach each client to exceed their unique needs through a use of diverse strategies.

 

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