By GWL Realty Advisors | August 12, 2022
Originally published on July 12, 2022

The pandemic has forced a re-think of the office, with remote work trends accelerating. Companies across North America have been working hard to find the best way to balance in-person collaboration and culture with these trends and employee autonomy and productivity. GWL Realty Advisors (GWLRA), the investment manager for the Canada Life™ Real Estate segregated fund, is watching the transformation of the office closely. As a leading North American real estate investment advisor, the GWLRA team has seen new deals and renewals up significantly over the last year. Importantly, this includes the return of long-term leases as companies begin to feel more confident with integrating new ways of working. Read on for their findings – are we seeing the end of the office, or just the traditional office we knew?

GWLRA has seen a considerable uptake in office space inquires and leasing activity in 2022. With a commercial portfolio of more than 60 office buildings across all major Canadian cities, GWLRA is a significant player in Canada’s commercial real estate space and tracks its office leasing activity.

“We’re getting back to pre-pandemic leasing activity in most markets,” said Steffan Smith, SVP, Asset Management, GWL Realty Advisors. “We’ve seen both new deals and renewals up prominently since September 2021. Although shorter term renewals remain popular as employers gauge their future office space needs, we’re starting to see a return to long-term leases.”

The company’s internal data aligns with recent CBRE insights that indicate GTA office leasing tour activity is at its highest level since the start of the pandemic.

One company that jumped on an opportunity to secure office space in downtown Toronto is GWLRA’s latest tenant, MNP, a leading national accounting, tax and business consulting firm.

“From our perspective, the office plays a critical role in supporting our culture and remains central to how our teams bond and collaborate”, said Greg Bobyn, Director Real Estate and Procurement at MNP. “For some time, we’ve recognized that office spaces evolve. It’s why all MNP offices are designed with flexible, modular layouts to quickly accommodate new working environments.”

Wendy Waters, head of research for GWLRA, agrees: “Rather than focusing on cramming as many workers as possible into bench seating, most office designs under consideration today provide a range of attractive options for workers.”

Waters adds that she does not see companies taking less real estate, but rather changing the way real estate works. “It’s about providing employees access to different types of space from individual workstations, to meeting spaces to collaborate in small groups, open areas to socialize with coworkers, or a phone booth room to take a video-call in private.”

By the numbers:

• Since the pandemic, GWLRA has completed a total of 237 office leases, totalling 2.4 million square feet.
• The majority of GWLRA’s leasing activity has been with financial institutions, insurance companies, as well as professional services (legal and accounting firms, consultants, architects, engineers, etc.).
  • 32% of total deals and 38% of square footage are with finance and insurance.
  • 32% of total deals and 25% of square footage are with professional services.
  • 3.7% of total deals and 22% of square footage are with government agencies.
• The remaining leasing activity is spread across companies from other industry sectors including technology companies.