The Economic and Cultural Development team is monitoring the impact of COVID-19. Click here to learn more.

Vaughan Rising Podcast – Vaughan Enterprise Zone Part 2: Getting Real with CBRE

This blog is a summary of the Vaughan Rising Podcast Season 1 Episode 4 by the host, Michelle Samson. For more detail, listen to the full episode (links below).

About the episode

Niagara University is an American post-secondary institution that has been offering professional education programs in Ontario for more than 30 years. After a year-long searching process, the university found a permanent Canadian location within Vaughan’s emerging downtown – the Vaughan Metropolitan Centre. Niagara University President Father James Maher gives us a lesson in site selection and why Vaughan was the place to be for the university.

Thoughts from the host

We’re back with the second part of the two-part series on the Vaughan Enterprise Zone (VEZ), the 1,660-hectare (4,100-acre) business park just north of Toronto with 607 hectares (1,500 acres) of vacant and developable land.

In part one, we got an overview of the zone and one of its biggest assets: Canadian Pacific Railway’s Intermodal Terminal. In part two, we’re getting the office and industrial real estate perspective.

I got a chance to pick the brains of three vice-presidents with CBRE’s Toronto North office. For the office perspective, sibling team Craig and Gary Williamson join the podcast, and representing the industrial side is Pat Viele. These “905” area code veterans have decades of experience and share the facts about what’s happening beyond Toronto’s downtown.

Today’s high-demand, low-supply conditions are inspiring more tenants to look beyond Toronto’s downtown core, putting Vaughan on the radar. What they’re seeing is that Vaughan is a major, accessible commercial centre with 12,000 businesses and 220,000 jobs.

Gary says Vaughan has hit a critical mass and can attract office users, large and small, international and local. They’re seeing value in the suburbs, especially in Vaughan with its subway access to downtown Toronto and Highway 407 providing easy access to employees and clients across the “905.” Gary’s clients say Vaughan’s centrality among neighbouring cities is a key asset of interest without compromising quality, location and amenities. As a result, it’s one of the few suburban markets where “a lot of the landlords we represent have the confidence to put a shovel in the ground without a lead tenant.” Gary explained that this confidence is something unheard of in so many other markets, but they’ve successfully leased up a lot of office space.

On the industrial side, Vaughan’s vacancy rate is nearly as low as the Greater Toronto Area (GTA) average at 1.7 per cent. Rents have increased by 18 per cent and sale prices have increased by up to 32 per cent in the last year – indicators of strength in Vaughan’s economy. This strength is driven by major attractions such as the highway network, including the 427 extension. It’s also easier for employees to get here with the new subway and connecting rapid bus lines. Fortunately, supply is increasing to meet the rising demand.

From an office perspective, Craig notes that a 65,000-square-foot development by Zzen Group on Highway 7 was 90 per cent sold out coming out of the ground, so the 100,000-square-foot second phase started construction in quick succession and will be available in 2020. Gary gives some credit to the City of Vaughan’s pre-planning and infrastructure investment in the VEZ for facilitating the speed of this development.

This context of demand plus construction-readiness is spurring Vaughan’s industrial supply too. Pat says speculative construction is back. Developers like Zzen Group and Anatolia Capital Corp. are starting to market their properties when the shovel hits the ground, and most of the time the spaces are leased before construction is done.

The VEZ’s key selling points for office users are public transit, abundant parking, central location, highway access, access to Toronto Pearson International Airport, new Class A office space with open collaborative workspaces, amenities like fitness and hotels, and competitive commercial taxes and operating costs.

Selling points for industrial users are location assets (including proximity to Canadian Pacific Railway’s Vaughan Intermodal Terminal), parcels of land big enough to build vast facilities and new construction that accounts for the latest industrial needs for dock doors, ceiling heights, etc.

I asked the vice-presidents what kind of tenants are best served by this location, and they said literally everyone (which I love as an economic developer). Typically, the VEZ has attracted users in tech, finance, insurance, real estate, food manufacturing, automotive and plastics, among many other sectors.

When asked about restaurant recommendations, Craig, Gary and Pat said there are so many great ones to choose from. They did manage to single out one: Mastro Roberto Trattoria at 7887 Weston Rd.

This episode was recorded in the green-screen room at the Civic Centre Resource Library. For more information on Vaughan Public Libraries’ creation spaces, visit vaughanpl.info/shareit.