Downtown foot traffic up more than threefold since start of 2021, study shows


The increase in activity in downtown Montreal this year trails only New York City among a group of 23 North American municipalities.

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Next, we take Manhattan.

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Visitor activity in downtown Montreal has more than tripled this year and trails only New York City among a group of 23 North American municipalities tracked by the Avison Young real-estate advisory firm.

Foot traffic in Montreal’s central business district soared about 212 per cent between Jan. 5 and Nov. 22, according to Avison Young data . That compares with increases of 237 per cent for New York, 150 per cent for the San Francisco peninsula, 146 per cent for Ottawa and 86 per cent for Toronto over the period. Foot traffic in downtown Montreal has more than doubled since Sept. 30, the figures also show.

“We’re definitely sensing that all around, people are coming back downtown,” said Jean Laurin, who runs Avison Young’s Quebec operations and has been back in his René-Lévesque Blvd. W. office for several months. “Shoppers are also more present, and they’re going to be even more visible as we get closer to Christmas. A place like Central Station is definitely a lot busier these days.”

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With many private employers keen to bring their employees back in 2022, activity metrics will probably keep climbing in the coming weeks — as long as a new wave of COVID-19 infections doesn’t sweep across Quebec.

It’s too soon to say if the recent increase in cases will lead health authorities to slow or halt back-to-work strategies, said Laurin.

“It’s a little more complicated than just the number of cases,” he said. “I’m not in the premier’s shoes, but I would think they’re also monitoring hospitalizations and the number of serious cases. At some point there is a magic number where the government will say they need to put things on hold. Vaccination is part of the overall strategy.”

Mass vaccination is one of the reasons downtown Montreal’s economy has begun to shake off the effects of 21 months of the pandemic, which deprived the city of almost 300,000 office workers.

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Quebec got the ball rolling two weeks ago when it ushered in a gradual return for civil servants . Starting Monday, municipal workers are expected back in the office under a hybrid model. A quarter of Montreal’s 28,000 municipal employees have been working from home full-time in recent months.

To be sure, foot traffic numbers are still nowhere near their pre-pandemic levels. As of this month, activity in downtown Montreal is about 58 per cent below what it was in March 2020, Avison Young data show. Of the 23 areas tracked, only Austin, New York and Edmonton have fared better during the crisis.

Avison Young’s so-called “vitality index” monitors foot traffic in the 23 U.S. and Canadian urban areas. Together with geospatial analytics firm Orbital Insight, which aggregates anonymized cellphone location data, the firm estimates foot traffic figures from a sample of office buildings.

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Teleworking’s enduring popularity over the past two years has had a profound impact on commercial real estate. Some 15.5 per cent of Greater Montreal offices stood empty as of the third quarter, up from 14.9 per cent three months earlier, Avison Young said Monday in its latest quarterly report. In March 2020, the vacancy rate was 10.8 per cent.

Office availability in downtown Montreal has soared 67 per cent from pre-March 2020 levels.

As leases come up, companies “are going to revisit their needs, and they could be taking less space — maybe 10 to 20 per cent less,” Laurin said. “So I wouldn’t be surprised if the vacancy rate continues to inch up for the next few quarters, although I think we’ve seen the worst of the pandemic’s serious impacts.”

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Twelve office buildings are now under construction in Greater Montreal, representing about 2.74 million square feet. Of that group, five are located downtown and make up almost 60 per cent of the total area under development.

Importantly, institutional investors continue to have faith in commercial real estate. Office transactions worth a combined $617.5 million were concluded in the third quarter — including the $482.1-million purchase of the 1000 de la Gauchetière building by Montreal’s Groupe Petra and Groupe Mach. That’s more than six times the second quarter’s $101-million deal value.

“This is a sign that investors recognize the underlying value of real estate as a long-term asset,” Laurin said. “They realize that there’s a blip right now but things will come back to a normality of some kind. That’s a very powerful message.”

ftomesco@postmedia.com

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