Kitchener-Waterloo’s lucrative residential market compounded by the war for talent is creating an incredible opportunity for the Office market.
Kitchener and Waterloo are experiencing significant changes to its office market landscape. With the ever changing economic and work strategy environment, the region is on the cusp of a new trajectory, ready for innovative commercial real estate experts to guide organizations through this unique transition.
The Current State of Office in Kitchener-Waterloo
Demand for office spaces in Downtown Kitchener has begun to wane, placing a new spotlight on the Waterloo market. Two key buildings in Downtown Waterloo are attracting the attention of potential tenants, specifically at 115 King Street and 35 King Street, currently undergoing renovation to be converted into A-class office space.
According to Colliers latest Waterloo Office Market Report, the region remains in a hold as rents settle and new trends emerge. Companies like Europro have announced plans to convert 22 Frederick Street, a12-storey B Class office building in Downtown Kitchener into a 91-unit residential tower with a mix of 1- and 2- bedroom suites, making this the 3rd residential conversion project in the market along with Allen Square and 30 Duke Street. This trajectory will tighten the market supply when looking a long-term view.
The region itself lacks a surplus of local real estate experts in Office who can capitalize on the available space on the market, leading to advisors from the Greater Toronto Area servicing clients without intricate knowledge of the area.
A Thriving Residential Market
Downtown Kitchener is already seeing a surge of upcoming high-rise residential development with the likes of TEK Tower, Union Towers, and Young Condos just to name a few either planned or currently under construction projects. The market for spaces that are 1,000 – 5,000 square feet remains tight, and demand remains strong. This is indicated by the fact that approximately 88% of the total vacant space is constituted by spaces above 5,000 square feet.
The influx of residential will only expand the pool of fresh talent for organizations to tap into, creating a future need for office space in the region.
Kitchener-Waterloo remains an attractive location for those looking to live and work. Downtown Kitchener and Waterloo are home to a variety of amenities, including restaurants, bars, cafes, and cultural attractions, all within easy walking distance of each other. It is also home to an abundance of green space, including the Grand River and the Waterloo Park, and affordable living in comparison to Toronto.
Economic Growth Attracting Talent to the Region
The area's robust economic growth is generating a substantial influx of job opportunities. In an already competitive labor market, highly skilled individuals residing in Kitchener-Waterloo will be in high demand and will possess the leverage to negotiate for work environments closer to their homes.
The region accommodates a diverse range of industries, including technology, finance, and manufacturing, all of which contribute to its strong economy. The technology sector thrives on a vibrant startup culture and is supported by a robust ecosystem of incubators, accelerators, and venture capitalists. Renowned companies like Google and Shopify have established their presence in the region to tap into the rich talent pool and knowledge economy, bolstered by three post-secondary institutions in close proximity. With a low unemployment rate and a consistent flow of job opportunities, the region will continue to attract talented individuals seeking stable career growth, consequently driving the demand in the office market.
For those with a long-term perspective, it is evident that the office market presents significant opportunities. The expertise of office specialists and commercial real estate advisors will be crucial in assisting large organizations and local startups in navigating the expanding talent pool relocating to Kitchener-Waterloo.
Your Turn to Capitalize on the Opportunity in Kitchener-Waterloo.
Our Colliers Southwestern Ontario Brokerage team is expanding and actively recruiting for office experts and commercial real estate advisors to help our clients navigate the transition in the region.
To find out more how you can capitalize on the growing opportunity in Kitchener-Waterloo, click here.