Westway IV, the latest office building at The Armour Group Limited’s Westway Park Corporate Campus in suburban Halifax, is ready for occupancy this week and will include the company’s own Modspace co-working space.
Construction on the class-AAA, six-storey, 105,000-square-foot Westway IV in the community of Bedford started on spec prior to the pandemic. The building was entirely pre-leased to a variety of tenants, including a financial institution, a video game developer, consulting groups, a real estate developer and — as of late next spring — Modspace.
The 62-acre Westway Park, located off Innovation Drive and Hammonds Plains Road, already includes:
• 175 Western Parkway, featuring 54,000 square feet of class-AAA commercial space, with an enclosed two-level parkade;
• 15 Western Parkway, a 167,000-square-foot office building completed in 2009 and acquired and redeveloped by The Armour Group in 2014;
• 120 Western Parkway, which was completed in 2017 and includes 110,000 square feet of office space over six floors;
• and 22,000 square feet of dedicated amenity space — including a fitness centre, common meeting rooms, a fresh food provider and a Wi-Fi lounge — that was completed in 2017.
Future plans for Westway Park
While the next steps haven’t yet been announced, The Armour Group’s future plans for Westway Park include a further 600,000 square feet of office space, two business-class hotels, townhomes and apartment buildings, as well as community retail space with a mix of food and beverage offerings.
That may seem ambitious, but leadership at The Armour Group believes it isn’t unrealistic. Part of the attraction is the Bedford community.
“I think it’s the fastest-growing postal code in Atlantic Canada, at least,” The Armour Group senior vice-president of leasing and Modspace managing director Mitch Eliasson told RENX.
“The amount of residential growth there has been tremendous and the demand for office space there has been tremendous.
“It’s a convenient location for the airport and other communities. It speaks to the flight-to-quality-in-the-suburbs trend.”
Halifax’s office market
Halifax-based The Armour Group is a privately owned, multi-dimensional investment firm encompassing a variety of businesses within Atlantic Canada.
It’s primarily defined, however, as a real estate development and construction firm that integrates the concept design, development, construction and internal management of its assets.
A survey released last month by Halifax-headquartered real estate counsellor Turner Drake & Partners Ltd. showed Halifax experienced a 1.51 per cent increase in office demand, leading to a slight drop in its vacancy rate to 14.44 per cent.
The Armour Group’s largely class-A office properties are outperforming that figure, according to Eliasson, who noted older class-C buildings are suffering and some are being converted to residential uses.
“It’s been a very positive year for us,” said Eliasson of the Armour portfolio. “Our downtown vacancy rate this calendar year has gone from 12 per cent to three per cent.
“We’re effectively 99 per cent leased at Westway Park and we’ve got office buildings in another node in Burnside at our Park Place Campus that are doing well.”
While it hasn’t greatly affected The Armour Group’s office portfolio, Eliasson said Halifax’s sublease market is growing. However, he sees positive trends in companies committing to office space and getting employees back into the office.
“Larger groups want to invest in beautiful spaces and create a hub to bring their staff together and still have that culture. Office leasing’s not going to be dead by any means and I think there’s still some good demand out there.”
The Armour Group had been seeing evolving workplace trends and growing demand for flexible office space, which has increased since hybrid working models have become more common during the COVID-19 pandemic.
This led to the decision to create the membership-based Modspace.
“We just saw a hole in the co-working market, particularly in Halifax, in terms of creating something a little bit more elevated and professional,” said Eliasson.
Modspace Halifax will be the first location to open, at Queen’s Marque on the waterfront of downtown Halifax, in December. Modspace Dartmouth will open in Park Place next spring, followed closely by Modspace Bedford at Westway Park.
The spaces will range in size from 6,000 to 10,000 square feet.
Each Modspace will include dedicated desks, private offices, shared spaces, meeting rooms and breakout areas supported with premium features, services, information technology and access security.
Modspace’s Team membership was created with established businesses in mind, particularly those with existing offices.
Interest is expected from companies looking to adapt to a decentralized workplace, appealing to work-from-home staff who want access to professional settings, employees visiting from other jurisdictions, or businesses seeking a hub-and-spoke presence.
Co-working competition in Halifax
Regus has two downtown Halifax co-working locations and IWG opened a 14,000-square-foot location for its Spaces brand in Dartmouth in May.
There are also a few independent co-working operations, but Eliasson said there’s not a lot of competition in the area.
“It’s still a very small percentage of the overall office market. This isn’t Toronto, where you have a lot of WeWorks and others around, so I think there’s a little bit more room for growth in Halifax.”
The Armour Group’s entire real estate portfolio is based in and around Halifax, but Eliasson said the company would consider outward expansion to other Atlantic provinces and even to the rest of Canada for Modspace if the first three branches are successful.