[URBAN NOTE] "New office towers without jobs to fill them won’t help Montreal"

[rfmcdonald]

The Globe and Mail's Konrad Yakabuski describes problems with Montréal's boom in office towers.

Last fall’s inauguration of Cadillac Fairview’s Deloitte Tower on the southwestern edge of downtown Montreal seemed like a reason to uncork the champagne, ending a 20-year drought in new office construction in what remains Canada’s second-largest commercial property market.

It also marked the escalation of a war for tenants between real-estate rivals Cadillac Fairview and Ivanhoé Cambridge – and by extension the huge public-sector pension funds that own them – in a market with a double-digit vacancy rate and underwhelming job-growth prospects.

Deloitte moved into the tower after vacating 185,000 square feet in the 55-year-old Place Ville Marie, or PVM, the iconic Ivanhoé property that anchors the downtown core.

Cadillac Fairview is planning two more office buildings near the Deloitte Tower – in an area dubbed Quad Windsor, surrounding the city’s Bell Centre – as part of a $2-billion development that includes two condo towers bearing the insignia of the Montreal Canadiens. The condos are so popular that the developer just decided to stack 12 more floors on top of the second tower’s originally planned 37 storeys.

While all this activity promises a property-tax boon for the pro-development administration of Mayor Denis Coderre, and cheers locals envious of a Canada-wide building boom that seemed to have bypassed Montreal in recent years, it is also raising fears of a growing glut that could drain the existing downtown core of its vitality as tenants are lured to newer buildings on the fringes.