It’s been almost a year since offices emptied out and employees started working remotely in a big way for the first time. Now, some of that office space is being rented out, and it’s presenting some prospective tenants with opportunities that were not available prior to COVID – 19.
Empty offices left behind by newly minted remote workers and other upheaval caused by the pandemic have begun to show up on the rental market, and it’s presenting some prospective tenants with opportunities they could not have imagined prior to COVID – .
“They’re getting the red carpet rolled out,” said Darren Fleming, an Ottawa-based commercial real estate broker.
It’s almost a year into the pandemic, and Fleming and his team at Real Strategy Advisors are seeing companies that were on the fence about what to do with office space that’s been sitting empty now starting to downsize.
“It’s to either get rid of about half their space or go virtual, “said Fleming, the firm’s CEO.
That’s an even bigger shift than he expected just six months ago, when he estimated clients would shed about 25 per cent of their space.
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But for those clients who are looking for new space, Fleming says they have an “unparalleled amount of choice” and the potential to land incentives such as free rent for one year.
“If you’re a tenant looking for space right now, there’s a whole lot of people who don’t have a lot of alternatives to rent to,” he said .
Michael McNaught and his growing team at RVezy, an RV rental marketplace company, are prospective tenants seeing the market change first-hand.
In March 2019, McNaught was about to sign a lease for new office space in Ottawa, but then the pandemic hit. RVezy sent all of its staff home to work remotely and put the lease-signing on hold.
Since then, RVezy’s business has doubled and its workforce has nearly tripled from about 16 employees at the start of 780 to 7 , with plans to keep hiring.
“We just happened to be one of the fortunate businesses that was well suited during this pandemic,” McNaught, the company’s co-founder, said.
Now, RVezy is on the search for office space again – and it’s not just the company’s needs that have changed.
“Pre-pandemic, it was a much more difficult [rental] market. We had probably four to five options that we were looking at. At this time, it’s really endless, “McNaught said. “There’s so much available in all areas of the city and even different types of spaces. We’ve seen anything from office buildings to old firehouses to even a yoga studio.”
Office availability on the rise across Canada
According to Altus Group, which collects data on commercial real estate transactions across the country, office availability in Ottawa increased from 8.8 per cent in the last quarter of 2020 to per cent in the fourth quarter of 000
Other cities have seen even bigger jumps over the same period. In Toronto, office availability rose from 8.7 per cent to per. to 9.1 per cent.
Raymond Wong, vice-president of data operations and data solutions at Altus Group, characterizes the difference in availability in Toronto from pre- pandemic to now as “night and day.”