Article
Law Firms Bring Stability to the Toronto Office Market
November 18, 2024 4 Minute Read
CBRE Toronto’s Brian Porter has joined the company’s Global Law Firm Practice Group, making him the city’s first representative in a network that specializes in counselling law firms on real estate and workplace solutions.
The group conducts occupier surveys and deciphers industry trends to generate exclusive reports for clients, helping them better understand the market and stay on top of trends.
“Having worked with law firms before, I saw an opportunity to deepen those relationships and better understand their needs,” says Porter, who has worked in office leasing at CBRE since 2008. “It was time to change that conversation to better support these high-performing law firms by drawing in the global perspective that CBRE’s Law Firm Practice Group can offer.”
Porter joined the Global Law Firm Practice Group after meeting with CBRE Chicago’s Todd Lippman, one of North America's top law firm brokers. They discussed the unique needs of legal tenants and how to help Toronto’s downtown office market bounce back from challenging times.
“The legal sector is highly competitive,” says Porter. “Law firms want to know what their competitors are doing so they can position themselves at the top. Right now, they want to know how to get their professionals back in the office.
“But they also want to understand the risks of mandatory return-to-work policies and how they can future-proof their offices. So there is a clear opportunity to leverage the Law Firm Practice Group platform to assist Toronto’s legal tenants in addressing these issues and honing the potential of their real estate, which is often some of the best office spaces with the most opportunities in the city.”
Providing Stability
The legal sector is a cornerstone of Toronto’s office leasing market, occupying about 8.1% of the downtown office space. With downtown vacancy reaching 18.2% in the third quarter of 2024, law firms play an essential role in stabilizing the city’s office market.
Law firms have been responsible for several large office deals this past year. CBRE worked with KingSett to relocate Fogler Rubinoff LLP to Scotia Plaza and assisted Miller Thomson LLP, an existing Scotia Plaza tenant, in moving higher in the tower. More recently Dentons and McCarthy Tetreault signed renewals at TD Centre for 130,000 sq. ft. and 220,000 sq. ft. respectively.
“We’re seeing mid-sized firms relocate and take advantage of opportunities in the market while larger firms have mostly been renewing their spaces,” says Porter. “Many law firms are seeking guidance from real estate experts to make well-informed office decisions as the uncertainty around return-to-office policies continues to loom over Toronto.”
Investing in Quality
Law firms are investing in their office spaces in a bid to draw employees back to the office.
Data from CBRE’s Law Firm Benchmarking Survey Results 2024 report shows that talent attraction and retention are the main drivers of their real estate decisions.
But building out a legal workplace can cost a pretty penny. In Canada the costs vary between USD $264 and $491 per sq. ft. (CAD $365 and $680), with Toronto’s fit-out costs ranging between USD $278 and $464 (CAD $385 and $642), according to CBRE’s U.S./Canada Law Firm Fit-Out Cost Guide 2024. Most of these expenses are associated with the construction of the space, as law firms require professional client-facing areas and closed offices for privacy.
“Law firms are particularly attuned to the impacts of their real estate since the partners see the bottom line,” says Porter. “They understand that what worked 10 years ago might not work going forward and that they need to create meaningful experiences to ensure their space is well-utilized long-term.”
The Law Firm Practice Group is a source of data and trends from law firms representing millions of square feet in Canada and the U.S. “It gives my team a significant competitive advantage,” he says. “This data can help our legal clients make better and more informed decisions about their downtown Toronto footprints. Whether they’re looking to downsize, renew, expand or encourage employees to return to the office, we can help.”
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