GWL Realty Advisors, a real estate investment adviser owned by Great-West Lifeco that serves pension funds and institutional clients, has made upgrades to two of its trophy office towers in the heart of Toronto’s Financial District, and the investments appear to have paid off.
The 1 Adelaide East tower at Adelaide and Yonge streets is 99% leased, while nearby 33 Yonge is 96% leased. GWLRA invested in major upgrades at both buildings and, according to Devan Sloan, GWLRA’s vice president of asset management and leasing, the investments helped its office portfolio recover post-COVID.
The 1 Adelaide East tower "was performing very well coming into COVID; we had very little vacancy,” Sloan told CoStar News during a tour of both buildings. “Then, one of our major anchor tenants decided to consolidate as part of their space reduction plan throughout Canada, and that left us about 50% of the building and a big pocket of vacancy of about 300,000 square feet.
"So, we went through a repositioning of the building.”
The company oversaw the upgrades to 1 Adelaide East and 33 Yonge as more office occupiers leave aging Class B buildings for top-quality office space, partly to satisfy employees who returned to their workspaces after working remotely during and after COVID.
For instance, 1 Adelaide East's lobby now functions as a lounge replete with seating spread throughout the airy room with direct access to a Craft Beer Market and a café. As part of the lobby’s renovation, the elevator cabs were also upgraded. The building connects to Toronto’s underground PATH system, which offers an array of quick-service food options.
Moreover, 1 Adelaide East tenants are set to get a three-storey dedicated amenity building several doors south on Yonge Street that will have a work area, including conference rooms and a fitness studio.
“The amenity building has been a huge draw. We did three deals that totalled 250,000 to 275,000 square feet, and for each of those deals, the amenities were a huge deciding factor,” Sloan said.
Experiential spaces
At nearby 33 Yonge, GWLRA said it completed lobby renovations this week. The 13-storey building has a uniquely designed atrium and includes Canadiana elements in its lobby. There’s a fully equipped gym in the building staffed with a full-time instructor, an expansive bike locker — including specialty locks for expensive bicycles — and a larger shower area than the one at 1 Adelaide.
“We did a full retail reset in this building about three years ago, and now we have five full-service sit-down restaurants,” Sloan said. “You can go to Green Box, which is a quick-service takeout restaurant right in the building, so you don’t have to go outside.”
Alison McNeil, a partner at Dialog who designed 33 Yonge’s lobby, said the concept for the transformation project was to create communal space for people to “pause and socialize.”
“It’s about offering a place of respite,” McNeil said in an interview. “It’s about a place where you’re invited to stay too.”
McNeil noted that times and tenant desires have changed since the 33 Yonge building was constructed in 1982. More than four decades henceforward, the modern office worker expects different things.
“It’s a different time and age and people behave very differently today than they did when this building was designed,” she said. “A lot of these buildings were designed for men with briefcases in suits with a white shirt and a black tartan, and that is not what the workplace environment looks like anymore."
Incorporating experiential elements in a building is important, she said.
"‘Community’ is becoming a buzzword, but you’re coming to the office to do more than just the transaction of your work," McNeil said. "You’re coming to the office to be with people and to have more of an experience, whatever that is, and different buildings should tailor themselves to different kinds of brands.”
McNeil also said the office sector has not yet leaned into the idea of branding buildings as more than mere places of commerce, citing as an example that offices “are also becoming major food destinations in Toronto right now.”