In the event of a recession, the tech industry may well prove to be Canadian commercial real estate’s salvation, according to CBRE’s Paul Morassutti.
In a keynote address earlier this week, Morassutti said that economies prioritizing the technology and innovation sectors – like what Canada has been doing in the past few years – will be able to handle the worst of whatever a potential meltdown might inflict.
“In real estate, identifying areas of growth is fundamental. Increasingly, the areas of growth in Canada are all about technology and our growing knowledge economy. Technology is the catalyst, change agent and king-maker and its impact is rippling through every sector of our market,” he stated, as quoted by Real Estate News Exchange.
CBRE has previously estimated that for every tech employee hired at a tech firm between 2012 and 2017, three more were hired by non-tech companies.
“Over the past 10 years, tech has grown at more than 2.5 times the pace of the energy sector and three times the overall economy,” Morassutti added.
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Currently, around 10 million square feet of office space is under construction in Toronto, but fully 58% of that volume has already been pre-leased, with tech firms accounting for 20% of that portion.
Even giants such as Microsoft have taken notice, if its move into a 132,000-square-foot lease at the new CIBC Square in downtown Toronto is any indication.
“Tech companies anchoring new buildings is something we have virtually never seen before,” Morassutti noted.
“Tech has become so ubiquitous across Canadian industries [that] the true impact the tech sector has on Canada’s economy has been understated.”