The decision to move to Victoria St. goes back to 1996. Many members will recall that we used to have offices on Richmond St. We ended our lease to take advantage of the fact there was a surplus of downtown office space at the time, enabling us to secure an extremely favourable price on a ten year lease for our current offices. So, that's why we are now on Victoria St.: it was a great deal, providing more space, in a better location and, luckily, available when we needed it. It's a Class C building (lowest commercial grade), but it's decent, and it's close to where our members live and work.
We have renewed the lease once since then, again for another 10 years, and this time were even able to secure some needed renovations as part of the renewal negotiations. Of course, this decision wasn't made without doing research on other options. Staff reported that the new terms were competitive with other suitable locations, both downtown and in outlying areas. When making the decision, they also took into account the fact that relocation and the cost of needed renovations would cost an arm and a leg. (Commercial spaces typically lease "as is". At the class of office space we can afford, generally very as-is.) Moving mid-lease is even more expensive, since it also entails buying out of the lease.
Since posting this originally, I've received a copy of the quarterly office report put out by Colliers International, a major commercial real estate firm. I can confirm that our rent is well below typical for all buildings in the financial core (the overwhelming majority are buildings in Classes AAA to B), and about 20% below average for the relatively few Class C buildings in that area. Looking from Dufferin to Bayview (covering the whole greater downtown area), we are about 35% below average for our class. In short, anywhere else we might consider moving in the general vicinity of where most of our members live and work would actually cost more.
Leasing agreements for commercial office space work differently than residential rentals do. They're typically split into two components: leasing of the physical space, and the common area maintenance (CAM) and occupancy costs. CAM and occupancy includes heating, electricity, water, property taxes, interior and exterior building repair, office cleaning, window cleaning, snow shovelling, building insurance, waste disposal, security, etc. The amount posted annually in the financial report includes all of these costs for both offices. Face it: commercial real estate is not cheap.
People have also suggested moving to another city elsewhere in the country. The idea is certainly not without merit, but it would take expensive to a whole new level – we can't just pile everyone in the minivan and go. Not to mention the fact that we'd probably need to train an entirely new staff. It would also need an amendment to the Constitution first.
Some members have asked about purchasing our own space. In 2010, the rent (space only) for the Toronto office was $92K. That is just under 40% of the total expense and is the only portion of the cost that could be applied to purchasing. The CAM and occupancy portion would continue to apply, since we would still have to heat/clean/repair/etc., and we would no longer be sharing that expense with other tenants. We also don't need a lot of space (in commercial terms), and that limits viable purchase options a lot. Finally, owning commercial property is not something for any organisation without seriously deep pockets; there is no way that Equity (or it's membership) could afford that without a significant dues increase just to cover those costs. Members interested in knowing more about owning office space should speak to ACTRA or UDA; I can (from experience) guarantee you a wry smile in reply.
Council currently has a specific policy prohibiting the purchase of real estate, and it would take a real gem of an opportunity, and something more concrete than theoretical savings, to get us to rethink that.
The questions posed at the top are good questions, and natural ones to ask, but once you crunch actual numbers – actual rent, actual CAM, actual moving costs – the answer is clear. We will continue to review all options every time the lease is up for renewal, but Victoria St. remains a good deal for the moment. We're fortunate to have found it when we did, and not to be looking for a new space in today's tighter market.
(Click on the image for greater legibility.)
Many matters of interest attach to the latest of Toronto’s skyscrapers. The Metropolitan Building, standing at Victoria and Adelaide Streets, dwarfing the lower structures about it, and even dominating the skyline of the city in rivalry to such towering edifices as the Royal Bank and C.P.R. Buildings, is reputed to be the highest skyscraper in the entire British Empire. Its 21 stories and tower rise to the dizzy height of 315 feet from the street line, and below the ground surface its piers extend down to solid rock.
Of simple, yet pleasing architectural design, the Metropolitan for the first three stories is faced with stone. Higher, buff brick is used, with stone bands at the nineteenth and twenty-first stories. The entrances are from both Victoria and Adelaide Streets, and lead into a corridor through bronze doors. In the corridor there is a battery of five high-speed electric elevators.
Image and text used by the kind permission of The Globe and Mail.