Downtown Hamilton Office Market on the Rise
Hamilton’s downtown continues to look to the future through sound investments while building on its recent milestones in commercial and residential investments. There’s evidence in both the statistics, but also in the heart of residents – and it’s not just locals noticing.
Ignite Magazine, in a June 2014 article wrote that “renovation, revitalization, and rejuvenation come to mind. In the heart of downtown two new hotel builds, Homewood Suites by Hilton and Staybridge Suites, bring the total room capacity in the city to 1,485 while the Hamilton Convention Centre continues to renovate and rejuvenate with over $1 million in upgrades in the past year.”
By the numbers, Downtown Hamilton’s office space inventory grew by over 148,700 square feet between 2009 and June 2014 with vacant space dropping from 771,200 to 613,790 square feet illustrating a net 306,111 square foot increase in used space. The vacancy rate has declined to 11.8 per cent as of June 2014, and according to Glen Norton Manager, Urban Renewal for the City of Hamilton, “the vacancy rate in the downtown office market continues to decline and we see this trend accelerating.”
Employment numbers are also showing positive results with 23,595 jobs in 2010 growing to 24,700 in 2014. Another 400 plus jobs are expected in the downtown by June 2015.
According to the BMA Municipal Study 2012, Commercial Comparison Office Buildings by Location (Taxes per Square Foot), Hamilton/Niagara boasts one of the lowest rates in Ontario at $2.63 per office square foot. Downtown Building Permits in 2013 featured 155 permits worth $89 million in construction value. There were permits issued for 160 dwelling units also in 2013.
“We currently have 364 residential units that are in construction or just completed. There is also an additional potential for new units of about 1800 condos that have been announced or in the planning stages – which does not include the 200 or so units that were just completed in 2013,” points out Judy Lam, Senior Business Development Consultant, Urban Renewal Section, City of Hamilton.
This success is from Hamiltonians investing in Hamilton suggests Elizabeth Parker, Sales Representative with Judy Marsales Real Estate Ltd. and a Hamilton resident for almost 15 years.
“With respect to the vacancy rates, to find retail space in the core is very difficult at the moment. Everyone who is doing development is receiving a lot of calls for the remodeled space. We have people who want to invest, develop their restaurants and retail spaces in the core. Ten years ago it was very different,” says Parker.
Parker ascribes this new growth to both, young entrepreneurs and the local developers who took a leap of faith a number of years ago when very few others were looking at Hamilton.
“I attribute it to a lot of young entrepreneurs, under 30 and 40 years of age, who have businesses that are ready to expand or they have plans open their new business, boutiques, or shops. They want to live, shop, and work within walking distance of each other. We also have businesses that have been in various locations in the city and now want to come to the core.”
“I also think what has changed are the Hamiltonians who have leaped off and done it for the first time like when a local developer redeveloped the Bay/Murray Street area, overlooking the CN shunting yards and the waterfront,” adds Parker.
“A lot of people couldn’t imagine condos in the north end but they had a great location, they believed in it, and its sheer success has shown other developers the markets potential. The City’s development of the waterfront has also been a paramount change because it attracted a new audience to the waterfront from outside Hamilton.”
Another contributing factor is the number of educational institutions in the core. Yale Properties’ Jackson Square boasts a number of educational institutions that draw youth and career changers to the core including Collège Boréal, Everest College, Hamilton Suzuki School of Music, Hamilton-Wentworth District School Board, Liaison College, and the just announced move of McMaster University’s offices and continuing education programs to 1 James Street North, a steel and glass tower located on the east side of Jackson Square.
“Contributing to the developing vibrancy of downtown has been an important part of our decision-making and Yale Properties has been a very supportive partner in helping us find space that can be designed in a flexible manner that meets our needs now and into the future,” says Roger Couldrey, Vice-President (Administration) at McMaster.
McMaster University has agreed to lease 50,000 square feet on the property and will be moving 200 staff and 4,000 students there before the end of 2014. Among those services and units moving are: The Centre for Continuing Education; University Financial Affairs; Institutional Research and Analysis; and University Advancement. The new location is easily accessed by public transit, offers ample nearby parking, and is in close proximity to a wide array of services and amenities. It’s also just two blocks away from McMaster’s new Health Campus which is currently under construction at Main and Bay.
Parker also points to the re-development of the Terrace on King in 2012 in the International Village which, following demolition, was filled before it was completely rebuilt, and its success inspired local businesses.
“Seeing is believing. Around the bay has begun to get interesting – when they began clearing land for the Go Station it went crazy down there. Once investors saw it happening it got very competitive,” says Parker. “I’ve sold a lot of little live/work spaces and all of a sudden the demand has been crazy for the past two years.”
John Mokrycke, an architect involved in several downtown projects, including 366 Bay Street North and Acclamation Lofts on James North, says there is incredible momentum and interest among developers and buyers in Hamilton.
“Hamilton is a stable, real city,” says Mokrycke. “It’s quiet, relaxed and there are good neighbourhoods. People are anxious to come to a place with these qualities.”
Hamilton has illustrated its commitment to downtown’s commercial real estate including updated web links. For more information on investing in Hamilton’s Commercial Real Estate sector, visit www.investinhamilton.ca/downtown-bia/ commercial-retail-sector.
