Are Office Condos the Next Big Thing?
Office condos have been slow to catch on in Toronto. (It's ok, Van Gogh wasn't embraced at first either.) Despite its residential condo boom, the city lags places like New York, London, and Hong Kong in embracing the idea of owning offices. But 7 St. Thomas St, the first new purely office-condo building downtown, could help warm TO to the concept.
Designed by Hariri Pontarini Architects, 7 St. Thomas will have a nine-storey fritted glass tower with 93k SF of office space, plus six three-storey Victorian townhomes housing retail. The project, targeting LEED Gold, is under construction and slated to open in 2016. We snapped St. Thomas Developments president Patrick Quigley on site this morning. He tells us the building is 60% leased, with tenants including consultants, investment advisors, and dentists. Prices range from $535k to $8.8M, with full- and half-floor configurations. It will share the Yorkville site, southwest of Bay and Bloor streets, with One St. Thomas, a 29-storey residential condo tower by the same developer.
It’s been a challenge for Patrick and his team to sell Toronto on the virtues of owning office space; it's more commonplace in Asia and Europe but just hasn’t taken hold here. “It’s a niche market,” Patrick says. His Yorkville project is for tenants who “don’t need to be at King and Bay but still want to be in a prestigious location.” He notes there's been nearly no commercial office space built on the Bloor Street strip or around it in 25 years, reason to believe there could be growing demand for office-condos like 7 St. Thomas.
There are office-condo projects elsewhere in the GTA, most notably Hullmark Corporate Centre at Yonge Street and Sheppard Avenue (rendered above) with 225k SF of office-condo space across more than 230 units. The spaces have been taken by smaller-scale professionals and entrepreneurs who want to own their office “but don’t need more than 2,000 SF,” says project developer Tridel SVP Jim Ritchie. Patrick says 7 St. Thomas is the first of its kind downtown, but he anticipates others will follow. He doesn't foresee huge towers of office condos, but he does think more residential condo builders will get in on the market.