Achieving growth in the Montreal market

By Tracey Arial

A lack of employment growth and political uncertainty are hindering major growth in Montreal now, but quality top-of-line buildings and good retrofits will do well over time, says a key Quebec developer.

There is still a desire for quality,” says Daniel Peritz, a senior vice-president with Canderel Management. “I think that users now understand the greater relationship between the quality of their work environment and the productivity of their working staff. That spans across the urban and suburban environments.”

There is a shortage of large office blocks in Montreal. Those that do exist are older and weren’t physically designed to handle modern office requirements for occupancy, energy efficiency, electronics distribution, ceiling heights, washrooms, air quality, elevators and the size of exit stairs as they relate to the occupancy levels on the floor.

Those that can’t be retrofit to handle the new requirements must cater to “less significant” companies, which have lots of alternatives.

In the mid-term, there could be buildings that we’ve always seen as better quality buildings that slip ranks because they can no longer accommodate large users and they may end up just accommodating smaller users who don’t have the same criteria in regards to occupancy that some of the larger national tenants do,” says Peritz. “Buildings with tenants that average 10,000 sq.ft. in the last three years may end up with an average size down to 5,000 sq.ft. five or ten years from now.”

New projects, including the one by Canderel, are modulated within multiple phases to meet the needs of large national tenants who want large blocks now and the potential to grow or shrink with the market.

Note: This article appeared on page 24 of the Spring 2014 issue of Canadian Real Estate Magazine.

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