The Toronto-Dominion Centre is undergoing a makeover, but there's more to it than renovated foyers and a spruced-up outdoor courtyard.
The real story is behind the walls of the iconic black towers, where owner Cadillac Fairview Corp. is investing in systems that will help to reduce energy consumption and operating costs – and make the six-building office complex in downtown Toronto more attractive to tenants.
Cadillac Fairview is typical of Toronto landlords who are investing in green retrofits, hoping that upgrades to older buildings will make them more competitive in a market where the office vacancy rate is rising and millions of square feet of newly constructed, LEED-certified space will be delivered over the next several months.
There is more retrofitting going on in Toronto than in other parts of Canada because of the huge amount of older office space that will open up as tenants jump from these buildings into five new towers going up in the downtown core, says Robert Armstrong, managing director of leasing services for commercial property broker Avison Young in Toronto.
Tenants are working with tight budgets and they're looking everywhere for savings. “What they're asking for right now is how to reduce costs, whether it's getting into a building that is more efficient than the one they're in, or how to make the space they're occupying more efficient,” Mr. Armstrong says.
While the economy has put the kibosh on new commercial construction, the retrofitting trend is taking hold.
A report by Pike Research, a market research firm based in Colorado, predicts the retrofit market will experience strong growth through 2013 and beyond.
“Compared to conventional space, high-performance green building space is vacant less often,” notes the report, called Energy Efficiency Retrofits for Commercial and Public Buildings. “Owners of empty commercial buildings are adopting green retrofits as a market differentiator.”
Tenants are starting to pay more attention to such things as energy efficiency and certification in the Leadership in Energy and Environmental Design (LEED) green-building rating system when scouting for new premises, says Dermot Sweeny, principal of Sweeny Sterling Finlayson & Co. Architects in Toronto.
“I think we're seeing a tremendous change in how tenants are going to the market,” Mr. Sweeny says. “As tenants become more sophisticated, the smart landlords out there are saying, ‘We've got to be ahead of this curve.' When tenants walk in and say, ‘What are you doing for the environment' or ‘What are you doing to save me money, Mr. Landlord,' they can answer with seven or eight specific, highly desirable changes and retrofits they are doing to the building.”
Steven Sorensen, vice-president and divisional manager for Cadillac Fairview's Toronto office portfolio, says the upgrades at the TD Centre – the buildings range in age from 18 to 42 years and provide office and retail space for 21,000 people – benefit the environment and will make the space more competitive.
“Most environmental initiatives are based on reducing utility consumption. It's to the mutual advantage of the tenant and the landlord because, if we can reduce our operating costs, we become more competitive and, hence, can attract more tenancy,” Mr. Sorensen says.
Cadillac Fairview is spending more than $15-million on energy-efficiency initiatives such as re-commissioning all of the mechanical systems, Mr. Sorensen says.
Millions more are being spent on a new fibre-optic building automation control system that will improve the management of heating, ventilation and air-conditioning systems, he says.
This includes installing meters for each tenant so that they can monitor their own energy use. “We felt the most effective way to get [tenants] engaged is to give them the information to help them understand their consumption and usage patterns,” Mr. Sorensen says.
Other improvements include outfitting washrooms with low-flush toilets and automated taps, and sourcing recycled paper products. Lighting will be put on auto sensors.
