Growing up in what was then known as “North Toronto,” where my family lived on the same street for over 45 years, provided an unparalleled perspective of commercial real estate growth. Witnessing the rise of towers that shaped the area southwards as an office community, including the expansion of Canada Square in 1972 and the completion of Yonge and Eglinton Centre in 1974, generated excitement around what was to follow. My early years in the commercial real estate business in the mid-1980s saw me located in what was then a commercial office building — now a converted residential condo at 188 Eglinton Avenue East.
In Q4 of 2022, 69 buildings accounting for 6,788,105 square feet of office space stood in the Yonge and Eglinton market, where the office vacancy rate rested at 9.0%. According to said report, 6,522 square feet of new inventory was listed as under construction at Yonge and Eglinton, part of the total 281,522 square feet of new construction advancing in Midtown and representing the start of a development shift in the area. The volume of new inventory under construction will only increase substantially.
Profound changes have occurred in the Yonge and Eglinton office market over time, and significant developments in the pipeline are primed to drive the market from a node to a highly-desirable supernode, with new inventory setting the stage for the next generation of Toronto’s office market. This will see the office sector and the wider Yonge and Eglinton area undergoing a mixed-use revitalization, bringing additional residential and commercial real estate components to the community and boosting the local economy.
A market that has ebbed and flowed
In the 1970s, the Yonge and Eglinton area was a termination zone known as “Uptown,” in the north end of the city, with the city limits at York Mills and Yonge. Today, the market is known as “Midtown.” When looking at the next growth phase of the Yonge and Eglinton office market, it is imperative to examine how the area has transformed over the years.
The TTC Yonge Line expanded to Finch Station in the late 1970s; this changed the dynamic of the area for transportation and infrastructure. New office inventory emerged in the 1980s, with 90 Eglinton Avenue East built in 1981; 1 Eglinton on the southeast corner of Yonge and Eglinton in 1985; and 2345 Yonge Street, known as the Edison Centre, as the last piece of inventory constructed.
The Edison Centre came to market 33 years ago during the peak of the office class in the Yonge and Eglinton area. In 1988, this hub had a considerable amount of office space; it remained this way for quite some time. Creative class companies, from media organizations to advertising agencies, occupied office space in the neighbourhood before moving to Bloor and King Street West as inventory and options expanded.
Language schools and small businesses, including law and accounting firms, later moved to Yonge and Eglinton for office space, followed by social media companies (LinkedIn and Facebook) in the early 2000s and not-for-profit organizations thereafter. Many not-for-profit organizations remain in the area today, centred around accessibility and volunteerism. However, development plans along Yonge and Eglinton began formulating in 2018 and are ongoing, which has led to a significant number of buildings slated for demolition.
Evolving from an office node to a supernode
As construction on the Eglinton Crosstown LRT continues, short-term disruptions to street-level activity are inevitable. Nevertheless, infrastructure improvements will benefit the future of Yonge and Eglinton as an integrated live-work-play core in the city of Toronto. New developments will come online within roughly six years to revitalize the area.
Tribute Communities is bringing the first piece of new office inventory to the market in over 30 years with Y&S Condos at 2161 Yonge Street. This 35-storey mixed-use tower will comprise luxury condominiums for residential, office, and retail use. “Tribute Communities has several projects throughout the city of Toronto and the GTA. The Yonge and Eglinton corridor has always been a vibrant and attractive area of investment for us,” said Filippo Bello, Executive Vice President of Construction and Project Management at Tribute Communities.
“Our process at Y&S began roughly five years ago with an opportunity to develop a mixed-use project with our Joint Venture partner Tenblock. We have designed a building that truly meets the needs of this particular area in the city with quality architecture, luxury units, and premium office and retail space,” Bello added. “The commercial and retail spaces will feature expansive windows and open floor plates that allow the flexibility to customize units with particular attention to efficient design. Separate lobbies, parking spaces, and elevators for both the office and residential components are key features of the development that support proper operation and long-term management.”
In 2016, RioCan completed an extensive mixed-use renovation and expansion project at the Yonge Eglinton Centre, covering 1,059,136 square feet and featuring over 200 retailers.
“The Yonge and Eglinton area is in the midst of a tremendous transformation between existing transit and the new Eglinton Crosstown LRT currently under construction,” said Omar A. Da Barp, Director and Sr. Practice Lead, Architecture with IBI Group, the architecture firm that oversaw the renovation of Yonge Eglinton Centre. “The area, previously nicknamed the ‘Young and Eligible’ area, has always had a mixed demographic, and continues to evolve with new and exciting development. Our firm has had opportunities to be part of shaping and molding the neighbourhood; we have left our fingerprint on past projects – including the addition and expansion to Yonge Eglinton Centre, which involved adding cinemas and a retail component linking two office towers – as well as present growth through architecture and transit projects. Yonge and Eglinton is quickly transforming into the new hub for connected community in the city and will continue to grow with each new development.”
Images used with permission from RioCan
A year prior, in 2015, Madison Group completed construction of The Madison, two amenity-rich towers above an eight-storey podium at Yonge and Eglinton. This pivotal project brought more than 53,000 square feet of retail space to the area. “Madison’s involvement in the Yonge and Eglinton location began over 40 years ago, with the acquisition of properties on the corner of Eglinton and Dunfield. Since that point in time, we have acquired at least 10 properties in the area. On four of the properties, we have built a mixed-use high-rise condominium development — which includes LCBO, Loblaws, Orange Theory, and Fresh. Madison retains and manages all the retail property it develops in these mixed-use developments,” said Jeff Shumacher, CFO/COO at Madison Group.
“All of the remaining buildings Madison owns in this area are located on the north side of Eglinton and are in the process of being repositioned for future mixed-use high-rise developments. Over the next 10 to 15 years, we anticipate there will be several million square feet of high-rise condominiums built together with ground-floor retail amenity uses. The Yonge and Eglinton corner will almost be non-recognizable, both as a result of our developments [and] the redevelopment other developers have planned for the southwest quadrant," added Shumacher. "We have taken tremendous thought, time, and effort to curate the type of buildings that will enhance the area and provide services to existing residents.”
In addition, Oxford Properties is currently behind a master-planned community redevelopment at Canada Square featuring interconnected office buildings with a retail shopping element.
A promising office market of the future
Over the next 36 months, as demolition clauses on older office inventory come into effect, a significant drop in available office products in the Yonge and Eglinton market can be anticipated. Currently, 21 office buildings in the Yonge and Eglinton area have leases with sale and demolition clauses included, representing over 2.6 million square feet of office space that could be demolished and replaced in the next five to seven years. As such, companies do not have the opportunity to secure long-term leases within these buildings without the risk of having their leases terminated. New inventory will be salient to reinvestments in the area, the first of which will be 2161 Yonge Street.
Significant transformations will be underway in this neighbourhood in the coming decade, benefiting the commercial, residential, and office markets. Connectivity will improve in this live, work, and play hub as the Eglinton Crosstown LRT will eventually run directly to the airport, making this one of the most accessible locations in the city. This proximity to transportation will be a massive draw for employees, and increasing the local housing supply means residents can embrace the concept of a "complete community."
Yonge and Eglinton is on pace to become a destination community and Toronto's next leading office and mixed-use centre. With the population of Ontario projected to reach over 20.4 million by July 1, 2046, and immigration targets increasing, proactively creating employment and residential opportunities in the Yonge and Eglinton market is critical for its future success.
Preeminent developers that wish to be a part of this future growth are already laying the foundation for this transformation.
For more information, please contact:
Tim Bristow, Senior Vice President, Sales Representative