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Developers bet on market rebound with massive Toronto complex
December 22, 2020

Developers bet on market rebound with massive Toronto complex

Oxford Properties and the real estate arm of Canadian Tire have announced plans for five office and apartment skyscrapers in midtown Toronto, as landlords bet on the market rebounding despite the pandemic driving workers from office towers and slowing demand for downtown condos.

This is the second large office development in the city announced this month, and comes as the office and condo markets soften. The office vacancy rate has nearly doubled to 4.7 per cent since last year with tenants big and small offloading space. As well, apartment rental rates and condo prices have dropped amid the glut of new condos.

“There is a lot of concern today about developing large office spaces and condos when we are seeing vacancies going up. But we have to disentangle the short-term impact of working from home,” said Carl Gomez, chief economist with CoStar Group, a commercial real estate company. “At some point we will return to work.”

Oxford and other office landlords are betting that workers will return to using corporate offices and that companies will continue to view Toronto as a top destination, with firms such as Amazon.com Inc. recently brokering large office leases in the city.

For Oxford, the 9.2-acre site at the busy intersection of Yonge Street and Eglinton Avenue will be its largest development in Toronto. It is also the most high-profile project for CT Real Estate Investment Trust (REIT), which was spun out of Canadian Tire in 2013 to make money from its large portfolio of retail properties.

Keep reading in The Globe and Mail