Co-working giant WeWork Cos. has joined the growing list of players looking to profit from Toronto’s booming office market.
The New York-based company is targeting more than a sixfold surge in Toronto by 2020, bringing its locations in the city to at least 20, according to Dave McLaughlin, WeWork’s general manager for the Northeast. WeWork opened its first locations in the city last year, both of which were 98% occupied within the first month. A third location was announced in January.
“The bottom line is, we don’t see any limit to demand,” McLaughlin told Bloomberg in a telephone interview. “We’re definitely setting our sights high for the city and we think it is an amazing ecosystem for business.”
WeWork is capitalizing on a booming technology and financial-services sector in a city where office vacancy rates are among the lowest in North America and a diverse, young workforce is increasingly shifting to contract and freelance work. SoftBank Group Corp.-backed WeWork has also leased locations in Vancouver and Montreal, and has grown to about 230 locations globally in eight years.
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WeWork’s appeals include everything from craft beer on tap to apps that connect its tenants, who the company refers to as members. Artwork in its first co-working space in Toronto incorporates a Drake-inspired neon praying-hand sign with the number six beside it. The piece marks the entrance to the sixth floor – and is a nod to Toronto’s 416 area code that the singer, one of the city’s biggest boosters, often references.
While these might be considered perks that would draw hip millennials, WeWork’s membership covers not just entrepreneurs but also big firms such as Royal Bank of Canada, Shopify Inc., and Equifax Inc. that may be looking for temporary or spill-over space.
“Part of what we sell, and part of what’s so inspiring for people is the sense that they like coming in to work,” McLaughlin said. “That’s hard to capture, but it’s real and it’s essential to what we do and why people love what we do.”
WeWork is planning to open two more locations in the city in 2018, recently announcing 1 University Ave in the downtown core for a total of about 3,200 desks in the city. “The demand for that location has been really strong, and we’re seeing people already signing up,” McLaughlin said.
In a recent report, CBRE Group Inc. stated that the technology industry, already a key driver of the market, will be soaking up an even larger share of space in the future.