It's going to be a neutral deposit for offices over the next 5 years: Dream Office REIT CEO
The head of one of Canada’s major office landlords said pandemic restrictions have made finding new tenants a big challenge.
Michael Cooper, chair and CEO of Dream Office REIT, said in a broadcast interview Friday he expects to see a surge in leasing activity once emergency measures to curb COVID’s spread are lifted. The real estate company reported Thursday net rental revenue in the latest quarter fell 9.2 per cent year-over-year to $26.2 million. It executed leases totalling 73,000 square feet compared to 46,000 in the first quarter of 2020.
“People have barely been able to use offices for 14 months and we’ve gone from 97 per cent occupancy to 94 per cent,” Cooper said. “We can see that as the world opens up in other places, people are pouring back to the office.”
The company has been forced to stop showing its properties to prospective tenants due to lockdown restrictions particularly in the city of Toronto, which Cooper said makes getting new tenants difficult.
“Most of our portfolio is in the city of Toronto and Toronto’s lockdown is really severe and we’ve really been respectful of what the recommendations are, so we are really not doing much in the way of tours.” He said. “[But] we think within 60 days we’ll be back at it again and off to the races.”
Cooper said he does not expect a trend toward remote work following the pandemic will severely reduce demand for office space.
“We have the strongest IPO market for tech companies in decades; all of those tech companies are growing fast and a lot of them are using office space,” he said. “We’re going to continue to see a rotation on what's driving office [demand] much more towards technology or fintech.”