Demand for primo office space bolstering 2 (maybe 3) big new Saskatoon towers
Builders of future River Landing towers and World Trade Center bullish about future occupancies
There's enough demand for new high-end office space in downtown Saskatoon to justify the oncoming construction of two sizeable new office towers, say builders and observers of the downtown real estate scene.
On Wednesday, Canwest Commercial and Land Corporation confirmed it will begin construction this fall on a nine-storey World Trade Center tower at the corner of 3rd Avenue and 22nd Street.
And on Thursday, the development manager overseeing a proposed 13-storey office tower at the city's River Landing development — plus a future 22-storey twin tower — told CBC News it expects excavation work to begin for the first tower in August.
"Saskatoon's had very little Class A space built in the last 10 years," said Alan Wallace, the City of Saskatoon's former chief planner and now the Saskatchewan planning lead for V3 Companies of Canada.
"A lot of Saskatoon's downtown office space is aging. More is needed."
High-end office vacancy rate at 6.1%
The overall vacancy rate for downtown office space stands at 15.6 per cent — driven by higher office vacancy rates in older, less desirable buildings.
But the rate for Class A offices — the offices thought to offer the best combination of location, design, energy-efficiency and, well, shiny newness — is much lower, at just over six per cent, according to the latest Saskatoon office market report from ICR.
"There's no real room for… companies to move into a full floor or multiple floors in those (existing) A buildings; it's usually pockets spread throughout the buildings," said Josh Walchuk, a partner and senior sales associate at ICR.
Companies also want to entice employees with brightly-lit, amenity-stocked workplaces, Walchuk added.
"[They'll] want employees to feel like they want to go to work every day, and it increases productivity and what they get out of their employees. So that is a big factor."
Wet-room, lecture hall eyed for trade center
The $55-million (minus tenant improvements) World Trade Center is slated to open its doors to office-holders in early 2020.
It will boast a four-level underground parking garage, a 126-seat lecture theatre, a penthouse floor with workout room and showers for cyclists who work up a sweat on the trek to work.
The building — which will take the place of a parking lot and the long-vacant, former home of Saskatoon Credit Union — is also on the route of the City of Saskatoon's proposed bus rapid transit system, says Wallace.
Don Atchison, the former mayor of Saskatoon and now a consultant for Canwest, says the building will look to distinguish itself by seeking out, as its name implies, tenants involved in "inbound and outbound trade."
"That could be lawyers, accountants, the insurance industry, manufacturing, processing, agricultural groups, financial groups," said Atchison.
Rooftop restaurant overlooking river?
At the other end of downtown, the group behind the next piece of River Landing real estate says construction is about to get underway there too.
Blair W. Sinclair, an executive vice president with Triovest, the development manager representing the tower's two investors — Greystone Managed Investments and Victory Majors Investments Corporation — says excavation work for Tower No. 1 is expected to begin in the second or third week of August.
At 13 stories high, the first of two planned towers will feature the now-customary underground parking garage plus high ceilings, nine corner office spaces on each floor and a rooftop restaurant, according to Sinclair. Tenants are expected to move in to make their own customized improvements in the summer of 2019.
All the spaces are either spoken for or have attracted serious interest, says Sinclair.
The tower is part of a larger, $300-million ("plus or minus") River Landing project east of the Idylwyld Bridge that also includes a mixed use condo/hotel complex — where construction has already begun in earnest — and a second, even larger tower, which Sinclair says would become the city's tallest building.
"That will be built in the future," said Sinclair of Tower No. 2, adding it's too early to talk timelines on that one.
Work will also begin on a public plaza at the centre of the entire development as the first tower is built.
A preliminary sketch shared by Triovest imagines the plaza being anchored by what Sinclair dubs a large "a reflective water feature," but he said the group is still working with the city on a final design for the plaza.
"It's one of several concepts that we're looking at right now," he said of the water feature. "We want to make sure that whatever we create becomes something that all of the city can be proud of."
It's all very ambitious — especially at a time when the provincial government is in cutback mode after citing a drop in crucial resource revenues — but Sinclair says the group is confident the province's economy will rebound and that demand is (and will) be there for all that new high-end office space.
"Frankly put, we have enough tenants already committed to support the investment," he said. "That's why we've announced that we're proceeding.
"We'll deliver an office building at a time when the market will start to show significant signs of improvement. And we're banking on that."
Tenants to be announced soon
Sinclair declined to name the first tower's confirmed tenants so far, saying they will be making a joint announcement with Triovest "in the very near future."
Atchison at Canwest, meanwhile, says Canwest is at work lining up pre-lease agreements with future tenants for the World Trade Center.
Wallace at V3 Companies says it's not unusual for development to undergo a surge like this at times of economic uncertainty.
"During a bit of a downturn, you find projects being proposed," he said. "It's based on the confidence that people feel in the community's ability to grow."