Carttera and CBRE announce launch of speculative development of 65 King East, 400,000 square foot office project in Downtown Toronto
10 Jul 2018
Toronto's record low vacancy rate spurs new wave of speculative office development to ease tight rental market
Carttera Private Equities Inc., together with and CBRE, which is acting as its exclusive listing agent, announce that 65 King East, a 400,000 square feet office project will commence construction and be developed speculatively for tenant fixturing available in Q4 2020. Located in downtown Toronto, 65 King East will contribute to the eastern expansion of the city's Financial Core. The development comes as the city is increasingly seeking to add new supply to a market where tenants are grappling with a critical lack of space from record low vacancy rates in what is North America's tightest office market.
"Toronto has had the lowest downtown office vacancy rate in North America for almost two years, which caused net average class A asking rents to increase by over 10% last year. Record low vacancy, coupled with rising rents, has made it possible for well capitalized developers to launch speculative office developments. With space in such short supply, speed to market in delivering new office product has become even more essential," commented Jeff Friedman, Executive Vice President at CBRE.
Located on King Street East, just east of Yonge Street, 65 King East has been designed in collaboration with IBI Group and WZMH Architects. The project comprises 400,000 square feet over 19 floors and preserves the facades of four heritage buildings along King Street East. This protects the neighbourhood’s historic character while providing access to new, world-class office space to the King Street neighbourhood. Targeting Gold Certification in LEED and Wired Gold Certification, along with WELL Ready standards, 65 King East recognizes the impact next-generation design and outdoor spaces have on employee wellness. The building will be outfitted with a total of 18,152 square feet of private outdoor terrace space across eight floors. Demolition commences July 2018 on the site with construction set to start later in the year.
"65 King East brings much needed world-class office space to the expanding eastern fringe of Toronto’s Financial Core," commented Dean Cutting, Partner at Carttera. "This is an underserved area for new and modern office space, and we are creating a forward-thinking environment that meets the needs of today's tenants. 65 King East integrates the best qualities of today's newest office towers in the Financial Core while promoting tenant employee wellness, collaboration, productivity and health. We offer tenants access to the King East community with superb local amenities and green spaces surrounding the building, giving tenants the best of both worlds: Financial Core amenities with a neighbourhood feel."
Werner Dietl, Executive Vice President and Regional Managing Director GTA at CBRE, noted that "office space is evolving in Toronto. The office is no longer a place to meet your colleagues and complete your tasks, but has adapted to meet the needs of companies in today's business climate. It is now a reflection of your company's brand and culture, and has become a powerful tool in the attraction and retention of talent. Carttera's commitment to maximizing the amount of terrace space adds to the office experience for employees and is part of our belief that workplace wellness is the next frontier in office design. These terraces provide outdoor space, natural light, panoramic views and fresh air that keep employees energized and engaged throughout the workday."
The announcement that 65 King East will be developed speculatively comes at a time where record low office vacancy rates in downtown Toronto have prompted a new wave of development. Between Q4 2014 and Q4 2017, over 5.2 million square feet of new office supply was delivered in downtown Toronto, yet, due to the economic growth of the city, the vacancy rate fell from 5.9% to 3.7% in the same period. This strong performance has kick-started a new development cycle in downtown Toronto, with 4.75 million square feet of office space now under construction, of which 1.8 million is speculative – the largest amount seen in a generation. At 400,000 square feet, 65 King East will be the second largest building to be developed speculatively in Toronto.
"In the last three years, Toronto has been one of the best performing major office markets globally. The unprecedented levels of tenant demand we are seeing, particularly in the tech community, means we need to add more space, and quickly. By building speculatively, 65 King East will be at the core of this activity, not only in terms of when the building will be completed but also the size of tenant base it attracts," Dietl commented.
"Currently, there is a lack of options for tenants within the 20,000 to 50,000 square foot range. So, with floor plates in the 20,000 to 28,000 square foot range, 65 King East is perfectly designed to meet the demand of these mid-size tenants, while still being able to accommodate larger companies," Friedman concluded.
About 65 King East
Located in the vibrant King East neighbourhood, 65 King East is just steps to King & Yonge, the Financial Core and less than a 10-minute walk to Union Station with seamless connections to the TTC, Go Transit, Via Rail and the UP Express. This new landmark brings 400,000 square feet of nextgeneration workspace to the core periphery with access to expansive private terraces connected to the workspaces.
Every detail of 65 King East's workplace environments was designed to create new pathways to foster collaboration, productivity, and employee health and wellness:
- The 18,152 square feet of terraces spaces span over eight floors offering stunning views of Toronto, Lake Ontario and the energetic King East neighbourhood.
- Designed with an aluminum curtain wall system with floor-to-ceiling 12' vision glass and double glazed units with low-emissivity.
- In-floor HVAC system incorporated for air flow three-feet above the floor and coupled with exposed concrete ceilings provide tenants improved air circulation. This maximizes access to better air quality throughout the day resulting in reduced absenteeism and greater employee wellness.
- Targeting LEED Gold Certification, offering highly efficient energy and water solutions, a green roof, 184 bike storage and 41 EV-ready parking spaces.
- Targeting Wired Certified Gold for premium digital connectivity, offering tenants high-quality and high-speed internet options, including fibre.
- Targeting WELL Ready Standards to support tenants seeking to adopt WELL Building Standards.
For more information, visit www.65kingeast.com.
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