Office and industrial space advisor and brokerage Newmark Knight Frank Devencore has opened a new office to service clients in the western part of the Greater Toronto Area.
Newmark Knight decided to launch its GTA West office in Etobicoke for a couple of reasons: its downtown Toronto office is bursting at the seams, it wants a bigger share of business from the burgeoning suburban market and sees an absence of other purely tenant-focused brokerages in the area.
“We are the only ones who are 100% tenant rep (in the GTA West area) and we are also full downtown,” explained Rob Renaud, Senior Vice-President and Managing Principal / Broker at Devencore Realties Corp. Canada Ltd.
Devencore, the Canadian partner of Newmark Knight Frank, has about 40 people working at its downtown Adelaide St. office and the company expects to “attract a different pool or talent” for GTA West, which “continues to defy expectations as far as growth in office space and demand by corporate (users) to be out there.”
Growth plans for Devencore call for growing to 10 to 12 brokers in the office over the next three years. “We want a really well-rounded skill set of people who have expertise in land acquisition/disposition and major ‘high cube’ warehousing and manufacturing site selection,” Renaud said, adding that his firm is “trying to develop a different [group] of people.”
Devencore, which has been covering the Toronto area since 1976, also knows the Mississauga area well and believes it can grab a bigger chunk of business there. “We have a track record, especially with office tenants for many, many years and some of the largest transactions in Mississauga have been done by our firm,” he said.
That GTA West resume includes working on Golder Associates’ deal for 150,000 square feet of office space in a new building in Meadowvale and helping FujiFilm to help them negotiate the design, lease and build of their distribution centre alongside the 401 highway and represents a large number of 100,000 sq. ft. tenants in buildings along the 427 highway. “Although we may not be the biggest brokerage in Canada, for what we do we really made a dent in that market.”
Shortage of High Cube Warehouse Space in GTA
Renaud, who was attending a Miami real estate conference last week, noted there is a shortage of warehouses over 250,000 sq. ft. in the GTA. “I think you are going to see more speculative construction on the warehouse side. It is just going to have to happen. We are going to have to build some big, huge cube boxes, some warehouses to attract and retain major retailers and major third-party logistics companies. The product doesn’t exist so if we don’t build it we are going to lose out on attracting new business to the Toronto region.”
Boots on the Ground Strategy Propels GTA West
“As we want to sort of tap the next layer of business opportunities and also grow our industrial track record in the market we need to have people on the ground out there,” Renaud said. “That is an evolution of thought in our company… and I know that there is demand in the brokerage community for a different platform.”
Besides its tenant rep platform, Devencore believes the capabilities it has through its partnership with New York-based Newmark Knight Frank in terms of consulting and technology platforms will allow it to offer clients an array new services and capabilities. The U.S. partner’s consulting group includes experts from backgrounds such as industrial engineering, technology, site and management consulting who bring a fresh approach to commercial real estate. “People that aren’t brokers that are really there as part of our team to help a corporate user really understand what they need and where they need it before they go get it,” he said. “Often times in our business it is `ready, aim, fire’ as opposed to thinking through things properly.”
Devencore’s main competitors in the tenant-rep brokerage space include the likes of CB Richard Ellis, Colliers and Avison Young, he said.
Big in Tenant Rep
Devencore’s specialization in tenant representation allows the firm to punch above its weight, said Renaud. “For the area of practice we focus on, we are significantly bigger than anyone else, even the bigger firms. CB might have five to 10 tenant reps in each of their offices but we have 40 in the market so we are pretty big.”
Devencore bills itself as Canada’s largest corporate real estate advisor and brokerage exclusively representing corporate, industrial and retail space users. Besides its two Toronto-area offices, it has seven other locations from Halifax to Vancouver.
New York-based Newmark Knight Frank and its London-based partner Knight Frank operate more than 240 offices in established and emerging property markets on five continents. It boasts a combined staff of more than 7,000 with last year sales of nearly $1 billion.