In a tight market, landlords get choosy

With commercial office vacancy rates in the low single digits in cities such as Toronto, Calgary and Vancouver, the leasing market pendulum has swung firmly in favour of landlords. Expect them to become increasingly picky when it comes to who gets to occupy space in their buildings and on what terms and conditions, real estate experts say. "These days, it is not unusual in downtown Toronto to find two or three tenants battling for spaces as small as 20,000 to 30,000 square feet," says John O'Toole, executive vice-president at broker CB Richard Ellis Ltd. "The days are over when landlords offered significant leasehold improvement money to persuade a tenant to take space," adds John Arnoldi, managing director of Toronto operations for Colliers International. "The fact is they don't have to; landlords right now are in the driver's seat."