Power Corp., a global financial services and investment company controlled by the Desmarais family, is headquartered in Montreal in a stately low-rise building in the city’s historical district.
In Toronto, the company leases the top two floors in Brookfield Place, an eye-catching two-building office complex that also draws tourists because it houses the Hockey Hall of Fame and displays a towering archway on the concourse that allows natural light to shine through.
Power Corp.’s space is being privately marketed for sublease at a time when companies of all sizes are trying to shed office space in the financial hub. Power Corp. has not formally put the space on the sublet market. Its lease expires August, 2024.
The increase in spaces available for sublease has pushed the downtown Toronto office vacancy rate to 7.2 per cent in the fourth quarter from 2 per cent prepandemic, according to data from commercial real estate firm CBRE.
The space is 17,000 square feet and shaped like a star, giving tenants a view of the city from every room. It was custom-built for Power Corp., with its own private elevator, furnishings, herringbone floors, two kitchens, lounges, boardrooms, meeting rooms and powder rooms.
A promotional video describes the space as one that “projects warmth, power and above all timelessness.”
It is not known why Power Corp. wants to find a subtenant for its space. The company declined to comment.
Bay Street firms, smaller tech companies and other businesses are trying to figure out the future of their offices and whether to incorporate more flexibility after the health crisis. Technology has made it possible for office staff to work from home, from cottage country and from cities such as Niagara and Cambridge, which are outside of the normal commute to downtown Toronto.
Earlier this week, the owners of the red granite Scotia Plaza skyscraper announced that its major tenant Bank of Nova Scotia renewed 560,000 square feet of its lease but was vacating the top floors of the 68-storey building.
That means two notable office penthouse suites are available.
“There will be demand. That is great real estate, great views,” said Roelof van Dijk, head of research for commercial real estate firm Colliers. Although the office vacancy rate is expected to continue to rise with new buildings coming on stream, Mr. van Dijk expects the pace of vacancies to slow as the pandemic eases and said some tenants that were considering putting their space on the sublet market have said they are taking it back.
No one knows what the office market will look like when the pandemic ends, and if and when Toronto’s financial district will revert to prepandemic days. The city has been in rolling lockdowns for months, more contagious variants of COVID-19 are spreading in the province and the timeline for returning to the office is up in the air.
So far, rents have not fallen. The only prominent companies to take additional space during the pandemic have been the largest tech firms that have done well during the lockdowns: Amazon.com Inc., Google and Shopify Inc.
Before the pandemic, those companies and smaller tech firms, as well as older businesses such as Tim Hortons, sought space in the financial district as they tried to make their offices more appealing to workers. That made Toronto the tightest office market in Canada and the U.S. with an office vacancy rate below 3 per cent for years.
With a report from Clare O’Hara.
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