After Waterloo Region's record 2014—$1B in investment sales—everyone asked Colliers' local managing director, Karl Innanen, if it could happen again. Almost: 2015 saw $900M in sales. "Investors now see us as a primary market," he says.

Hitting $1B in investment sales in 2014 was a huge deal, notes Karl, snapped at a recent Colliers market outlook event. But that record-smashing performance was driven by two blockbuster deals: the sale of the BlackBerry portfolio and of Sun Life Financial's head office. So to have a $900M year in 2015 without any big transactions—a third of the investment sales were apartment buildings—is really surprising, Karl tells us. “We’ve gone from years of $500 to $600M to now being consistently in the $800M to $1B range.”

Here's PM Justin Trudeau at the launch of Google's Kitchener office, its largest in Canada and a big boon for Waterloo Region. Momentum started shifting once REITs, pension funds and private equity firms took interest in the market, Karl explains. Dundee (now Dream Unlimited) bought a large office portfolio there in 2011, and a year later, Allied Properties REIT acquired the Tannery and part of Breithaupt Block, where Google located. Then in 2014, California's Speer Street Capital purchased BlackBerry’s portfolio, propelling Waterloo to its $1B year. “Things really changed once institutional investors saw us as a strong market."

There's still significant lingering office vacancy from BlackBerry’s contraction (the firm owned 2M SF in the region). At its worst, vacancy hovered around 24% in suburban Waterloo, but by Q4 2015 it had dropped to 18%. And Karl says BlackBerry’s smaller spaces on the doorstep of the University of Waterloo are being leased up and the larger facilities are seeing lots of interest. He expect tenants that aren't tech firms to move here in 2016, a sign of the market’s diversification. “These are folks who want to be close to that human capital generator (UW) but who aren’t the Googles of the world.”

Despite vacancy issues, Karl notes there's 300k SF of spec office development underway in Waterloo Region. This includes Factory Square (above), an ex-BlackBerry assembly plant that Speer Street is converting into a 215k SF loft-style office. “They’re taking the cool brick-and-beam look of downtown Kitchener and bringing it to the suburbs,” says Karl, adding he's a big believer in office availability spurring demand. And Waterloo boasts sizeable chunks of very nice space a stone’s throw from UW and its deep talent pool. “Tenants are saying they want the biggest sign the kids can see, so they’ll come to their offices to do co-ops.”