It’s 2019 and real estate prices are at an all time high in Canada’s largest market. Space is at a premium and vacancy rates are at an all time low. As per the CP24 article published on January 24th, Toronto’s commercial rental rates have surged to an all time high of $35.37 per square feet.
How does that impact your business?
Well, that depends. One would think it would rely on what stage your business is at. But, this real estate shortage is affecting everyone from start-ups and small business owners all the way up to large corporations, only in different ways.
Start ups are facing one of the most difficult times in history to create a home for themselves in what would be considered a hostile real estate environment. When keeping costs down is at a premium, they are being met with a market that has other intentions in mind. This is surely an obstacle that when developing the next ground breaking idea, certainly wasn’t accounted for.
Small business owners will be in for a rude awakening when their landlord approaches them with the new rental price on their lease renewal. Large changes will need to be made in order to continue to be not only profitable, but to simply pay the bills and put food on the table for their families. A business that may have had a long history in a particular neighbourhood, may suddenly be replaced by a slew of chain restaurants and coffee shops.
Large corporations, although not feeling the same financial crunch as their smaller counterparts, are facing a different problem. As business continues to push forward, they find themselves hiring more and more people, with no clear cut workplaces for them to operate at. Although the new trend of allowing employees to work from home has become quite popular, there are still industries that rely on having their workforce on-site day in and day out.
So, is there a solution to this growing problem? You could continue to construct more buildings, right?
According to CP24, Toronto had 7.3 million square feet under construction in the fourth quarter of last year, up nearly 1.3 million square feet from the previous quarter. The problem is that even years from completion, all 7.3 million square feet is already spoken for.
However, there is another solution.
Shared offices seem to be the best option for new businesses, relocating businesses or expanding businesses as they present a fully serviced flexible option for any sized business. Given the shorter term commitments, it’s more likely that availability won’t be at a premium and managing your everyday 9 to 5 is made easier. One’s ability to cut down costs and have a plethora of services at their finger tips is also a large selling point.
For more information about relocating your business to a shared office space at The Rostie Group, please visit www.rostiegroup.com or call (416) 214-1840.