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Changes to Canada's office market requires new strategies for owners

Colliers Real Estate Management Services launches Office 2.0 to reinvigorate workspaces and buildings with customized strategies.

Office National Nov. 7 2023 SPONSORED
Photo courtesy: Colliers Canada REMS 

Have you ever signed up for a gym membership expecting to work out all the time, only to end up burdened with the expense without actually visiting the gym as much as anticipated? It happens.

A similar scenario unfolds when it comes to the amenity packages of office buildings. An owner installs an expensive, space-gobbling fitness centre, only to find out that few people are using it. A gym can be the right option for many offices, but it’s a decision that should be supported by data. There could be — and often are — more effective amenities or programs that owners could use to boost occupancy and overall property performance.

It’s well-known that there have been major changes to where and how we work, says John Duda, president of Real Estate Management Services (REMS) with Colliers Canada. “The biggest challenge in the Canadian office market is getting people to regularly work in their offices to help foster vibrant, active buildings.” 

The national office vacancy rate exceeds 14%, according to Colliers’ National Market Snapshot for Q3 2023. Vacancy has been rising for nearly four years and Colliers expects the rate to continue rising through 2024, peaking around 15%.

Duda says owners are facing more uncertainty as the hybrid work era is normalized. 

“Beyond mandating people back to work, there are other strategies or motivations that will ensure tenants are going to use these spaces and our client owners can maintain thriving, exciting building communities,” Duda says.  

Often, intention doesn't always match behaviour. 

Office 2.0 provides data-driven, asset specific solutions 

Office 2.0 represents a leap forward within the office buildings Colliers Canada REMS manages across the country. Office 2.0 includes three re-imagined programs: tenant engagement, ESG and a PropTech Lab. 

"The program represents a profound shift, with programs that equip our property teams with a suite of services and strategies, while giving them the flexibility to decide with their clients what is right for their buildings," says Amy Vuong, vice-president, strategy, REMS with Colliers Canada. 

“Our team has a deep understanding of our tenants, their buildings and locations, thanks to our proprietary research, data and experience tailored to all types of offices, whether a AAA office building in downtown Vancouver, or an older stock suburban office in Mississauga,” Vuong says. 

"Based on that data, we make recommendations to clients that are specifically suited for their office building," Vuong says. "Office 2.0 will deliver heightened asset performance through our three programs, each developed and supported by our in-house team of experts.”

The core Office 2.0 team comprises Duda and Vuong, along with fellow Colliers REMS experts Tonya Lagrasta, head of ESG; Shiri Rosenberg, senior director of asset strategy and site activation services; Shivali Joshi, PropTech program manager; and Abdallah Al-Qashlan, manager of data analytics and insights. 

Asset plans suited to any scenario

Site activations don't need to be complicated or costly. The Colliers Canada REMS team helps launch and manage a range of programs across Canada including plant-growing and cooking workshops in edible gardens; wine tasting nights with sommeliers; art classes; and puppy yoga sessions. 

Office 2.0 also features core value-add strategies and large-scale building transformations. One of the most significant challenges Canada’s office owners are facing, is engaging with Environment, Social and Governance (ESG) in areas like sustainability and diversity and inclusion.  

“Only about half of our clients have developed strategies to meet the corporate requirements of ESG performance,” says Lagrasta. “Office 2.0 includes strategies and actions to help office owners get started or accelerate their results.” 

The Colliers Canada REMS team can support existing ESG programs that require focus or expansion, as well as initiate larger goals like achieving green building certifications and awards, or even retrofitting a building to become net-zero, Lagrasta says.  

Property technology is also important, but can be confusing for owners, adds Vuong. “We often face questions like: Which PropTech provider is reputable? Which AI is relevant? Is this tech going to deliver on what it says it’s going to deliver? And do I even need it? And is it worth the cost?”   

The PropTech Lab can answer all those questions. “For instance, there are 200 vendors that our team has reviewed, rated and assessed,” Vuong says. “Our property teams also gather data to determine which PropTech is most helpful in which scenario.”

For example, in Montreal, Colliers Canada REMS partnered with a medical app that connects people in their managed buildings to medical service providers in the neighbourhood, making it easier for these tenants to manage their health.

In-house property teams make it all possible

"Our property teams drive the Office 2.0 program," Duda says. "These teams develop with our clients the customized strategies, budgets and programming that solve the challenges of the building owners and their users. It's not a one-size-fits-all approach."

Some clients care mostly about tenant engagement and activation; others want to level up their ESG strategies. Some want to upgrade their tech or introduce nature-based climate solutions like edible gardens or pollinator gardens. "Our property teams can help decide which programs are the best fit and bring the strategy to life,” Duda says.

Colliers Canada REMS

Website: Colliers Canada REMS

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