It's the age of startups and the tech culture, and for businesses in this industry, this means massive growth and expansion. That's why it came as no surprise when tech giant Amazon announced the search for a global city that would be home to their second headquarters, since then dubbed as HQ2'. This news sent North American cities on both sides of the border scrambling in the race, offering proposals and potential properties that would satisfy key requirements in tech real estate: floor area for innovation, location amidst a healthy business climate, and accessibility to the tech giant's talent pool. Being the only Canadian city that made it to the recently announced top 20 cut, property investment advisors are now closely watching Toronto's status in the race. Offering a bid that capitalizes not only on the vitality of Canada's undoubtedly most populated city and thriving business district, but also on that of the entire region, Toronto's proposal brings into play 10 regional sites that can be developed into urban-slash-tech campuses to meet the tech giant's growth requirements. But what does landing HQ2 mean for the Toronto region's commercial real estate market? It's time to find out exactly what property owners and investors in the area are celebrating: All-Time Low Office Space Vacancy Rates The possibility of Amazon's HQ2 landing in Toronto means a sharp decline in office space vacancies. Toronto has grown to be a leading business district in the country, and with Amazon setting its sights to settle in, office spaces aren't just expected to quickly fill up; their property values are also likely to increase due to the demand and increasing foot traffic, which means gains for commercial real estate investors in the area. Property investment advisors in Canada note that Amazon is looking to occupy hundreds and thousands of square feet to provide ample space for innovation – and Toronto's bid includes not just one site, but several satellite spaces spread throughout an urban center (downtown Mississauga and Markham, the Vaughan Metropolitan Centre, Ajax, Brampton, Burlington, Oakville, Pickering, and Milton).This means higher occupancy rates and even new developments – and Amazon isn't the only one looking to move in. Toronto already has a growing tech scene, so it won't be a surprise if other tech companies also land in the city. Not wanting to be left behind in the wake of Amazon's increased global reach, these companies following suit are also likely to be eyeing both prized and up-and-coming commercial real estate locations to set up shop in. City Centre Transformations Toronto's bid sites include Mississauga, Markham, and Vaughan – up-and-coming urban centres that have been undergoing massive transformations for a while now, such as the recently opened TTC Line 1 subway extension that now runs through the York Region. These developments caused an influx of proposed and currently in construction offices, retail spaces, and condos, so it won't be a surprise that the possibility of an Amazon office in the area will cause these numbers to surge even more. With these numbers poised for growth, property owners and investors in the area could easily see vast improvements in their investment. Even without the potential arrival of Amazon, these relatively new urban centres are set to produce massive returns for investment from these recent developments alone. And with the likelihood of Toronto and its surrounding cities playing host to one of the world's largest tech companies, it's only a matter of time before commercial real estate assets and investments in surrounding areas like Ajax, Burlington, Oakville, Milton, and more reap drastically increased returns. Ripple Effect The growth of Amazon has long impacted brick-and-mortar retail, but its proposed HQ2 in Toronto could also signal a slight shift in commercial real estate investments. Moving away from traditional retail spaces, lucrative investments can now include semi-industrial real estate, such as warehouses and distribution centres. Property investment advisors in Canada note that investing in or co-owning a portion of these could yield significant returns in the near future, as online retail continues to thrive, and retailers like Amazon continue to lead the change. Apart from commercial real estate growth, housing HQ2 in Toronto could also mean more jobs and influx of talent into the city and the surrounding region. While increased value is great for resale, this could also signal an even steeper climb in the housing market and rent. At the end of the day, if Toronto were to welcome Amazon's HQ2, real estate investors will definitely share in the market's gains. Now all the city has to do is to ensure infrastructure development, improved public transit, and affordable living standards.
Thinking of investing in commercial properties lining up along the GTA? Don't wait another second – get ahead of the commercial real estate boom and the Amazon Effect. Book a consultation with our property investment advisors today.