By Robert Frank
Montreal’s midtown boom is nothing new to Richard Hylands. He saw it 15 years ago, when downtown Toronto tenants fled to his Liberty Village development there.
“The whole Mile X (Mile End-Park Extension) area is transforming very, very rapidly,” enthused Kevric’s ceo. “You have the Royal Bank going in; the university is across the street from us. There’s a lot of stuff happening in that area.”
“Laurentian Bank did so some time ago, and now TD Bank is consolidating there,” he observed. “They’re coming from the West Island. They’re coming from downtown. Some are coming from Laval.”
“It’s strategically located adjacent to subway and commuter train stations,” Hylands said, explaining that “any future expansion outside of the downtown core has to be public transit driven.”
“Companies that set up in the suburbs found that their free parking doesn’t attract employees to work in their call centres,” he said, “because those people don’t have cars. So tenants now want buildings close to mass transit, with very large floor plates and a lot of redundancy such as backup power.”
“It’s a live-work area, which is really the trend for what corporate tenants want,” Hylands explained. “You have the Little Italy open-air market nearby, which is a great place to go eat.”
Meantime, he foresees downtown Montreal facing a rough ride in the not-too-distant future.
“Very few Montreal tenants have to pay to stay downtown—and they won’t, when they can save half the rent and get LEED gold or silver space in a converted midtown industrial building,” Hylands asserted.
He expected that unbridled state intervention will cause the downtown hollow-out to gather pace, after the government announced 1 million sq.ft. of new city core projects, Dec. 20.
“The rules of the game have changed,” Hylands suggested. “The normal ebb and flow of supply and demand is hard to adhere to in Montreal, where there’s no competitive process to get the best proposal for the government.”
“Downtown Montreal already faces a very high level of vacancy, even before any of the new buildings are delivered,” he concluded. “Be it politically or market driven, it remains quite discouraging for private investors in Montreal.”
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