What landlords and tenants are saying...
Contrary to the Québec City market, where real estate activity continues to recover since the beginning of May, most owners in the Montréal Metropolitan Area have experienced an increase in activity since the first week of June (increase in requests for visits and quotes for vacant space). One may recall that the deconfinement in Montréal was pushed back to May 25.
Owners are still finalizing the re-entry to work and the related hygienic measures. Landlords should submit guides to their tenants which include various policies for the number of people allowed per elevator (usually two people maximum), use of washrooms, distance between people, use of masks in common areas, mandatory use of disinfectant dispensers, etc.
During our conversations with landlords, they have indicated that smaller tenants will suffer losses, and they are concerned about the bottoming out of this wave towards the end of 2020.
Many landlords are reviewing the recent change to the AUCLC commercial rent subsidy and their approach to tenants in rent payment defaults.
Despite the turmoil, certain office transactions are active and this is generally due to a combination of factors: an immediate or medium-term need, the expiry date of the existing lease is approaching, the opening of a satellite office outside the downtown core, a pre-Covid transaction in progress, etc.
A number of tenants are currently in the process of reviewing their space requirements. They face significant questioning related to the opportunity of teleworking on their operations and the impact of COVID on their growth projections. How can these new spaces be adapted to the new reality? How to ensure that the corporate culture is maintained? It is difficult to foresee the effect that these questions will have on the demand for office space; some will grow, others will opt for less space depending on the approaches chosen and their resilience.
For many businesses, the re-entry to the office has been delayed until the fall. In other cases, the return to work is done in a gradual and progressive manner with a limited number of people on rotation. The majority of companies have already taken the necessary measures with internal policies or government recommendations. For many, concerns persist regarding the means of transportation to the office and employee proximity.