- What 2 Queen Street West has not attracted any leasing activity
- Why A six-year restoration of the building is nearing completion
- What next The lack of pre-leasing activity is in contrast to other recently completed office assets
A restored office building in Toronto’s downtown core has yet to attract any pre-leasing activity.
The seven-storey, mixed-use building at 2 Queen Street West has 23,000 sq ft of office space and 22,000 sq ft of retail and storage space. All of that remains available as owner Cadillac Fairview wraps up a six-year restoration project.
The full-floor office and retail spaces will be available on Oct. 31 for five-to-20-year terms. Specific rental rates were not available, but, according to CBRE, average Class-A net rents in downtown Toronto were $35.00/sq ft as of Q2.
The office vacancy rate in the city’s downtown core was 18.1% in Q2, and 15.3% for Class-A buildings. Market pros have stated, though, that leasing activity for new assets remains strong and that many buildings come online heavily pre-leased. Another 3.2m sq ft of office space is under construction downtown, 43.2% of which is pre-leased.
Such was the case at 160 Front Street West. Also owned by Cadillac Fairview, the 47-storey tower was completed in Q1. It includes 1.2m sq ft of office space, which is 100% leased to TD Bank Group and Ontario Teachers’ Pension Plan.
That building is approximately 350 meters from Union Station, which has proved to be a draw for tenants amid the return to office push.
At the corner of Yonge Street and Queen Street West, 2 Queen West is part of the CF Toronto Eaton Centre complex. The intersection will be under construction until at least 2027 as work continues on the Ontario Line.
The property was built in 1895 and a restoration project began in 2018. That included refurbishing the original four-storey heritage facade and creating a three-storey glass addition.
Across the street, Brookfield Properties, Canada Pension Plan Investment Board and Alberta Investment Management Corp. have put 2 Queen Street East on the block for $215m.
Cadillac Fairview is wholly owned by the Ontario Teachers’ and has over $30b in assets under management. Salvatore Iacono is president and chief executive. The company is also looking to offload the Ritz-Carlton Toronto.
