iQ Offices’ 302 Bay, a historic 14-storey heritage building in the heart of downtown Toronto’s Financial District, is now fully open.

The almost 60,000 square feet of space in a former Bank of Montreal building was modelled after The Ned City of London, a private members’ club and hotel in the former Midland Bank headquarters in the United Kingdom’s capital city. iQ is sub-leasing 302 Bay from BMO and has a 20-plus-year lease.

It was a complex process to take the interior and its small floor plates down to the studs, while still preserving the historic elements, then incorporate hospitality-grade design to offer boutique hotel style and service to meet the evolving needs of today’s employers and employees. 

iQ was responsible for all of the demolition, construction and revitalization work. Company co-founder and chief executive officer Kane Willmott said the project ended up taking the better part of two years and costing about $330 per square foot.

“We actually opened it in phases,” Willmott told RENX. “We did the first seven floors, which we opened on February 1, and then we did two floors per month for the next four months.” 

302 Bay’s features

The 108-year-old building, on Bay Street between King and Adelaide, features a four-floor amenity program and includes:

• six wellness rooms and a thermotherapy suite, including two cold plunges and a large cedar sauna, plus showers and towel service;
• a dedicated on-site team providing personalized support;
• a games room with a billiards table that converts into a boardroom table;
• a full-time staffed barista bar serving hot and cold drinks;
• breakout areas;
• kitchens on every floor;
• a south-facing rooftop terrace with skyline views;
• weekly happy hours with complimentary snacks and beverages;
• nine bookable meeting rooms;
• phone booths, enterprise-grade connectivity and printing stations;
• and direct access to Toronto’s indoor PATH pedestrian system.

“Since COVID, employers aren't competing from one office space to another office space,” Willmott said. “They're competing with the comforts of home.”

Employers therefore have to entice people to come into the office by providing an enjoyable experience and environment that will offset the pains of commuting and other hassles.

iQ is in Toronto, Montreal, Vancouver and Ottawa

iQ launched in 2012 and has become the country's largest Canadian-owned, and third largest overall, co-working operator. It now has five Toronto locations as well as one each in Montreal, Vancouver and Ottawa.

“We have visual and audible privacy,” Willmott said of some of the elements that are consistent across all locations, which also include members-only lounges and high staff-to-member ratios.

“We have technology set up with private VLANs (virtual local area networks) so that companies are protected, from a technology perspective, from other companies within the space.”

Each space, however, also retains a unique identity and atmosphere that’s in line with the building it's in and its location.

“What we position ourselves for is the enterprise customer and larger organizations that have compliance requirements and are looking at catering to the unique needs of the people who are in the markets that we're in,” Willmott explained.

“How do they attract and retain the best talent and have a space that's reflective of their brand in terms of the quality of the experience when people are on site?”

Large organizations are driving co-working growth

Many industries work faster than real estate, and the needs and wants of office occupiers can move quickly when it comes to how and where they deploy their resources.

Since things have returned closer to normal after the COVID-19 pandemic, Willmott said many large companies now have mandates to have portions of their real estate in service office spaces, like those provided by iQ, where they have 50 employees or less.

“They're looking for flexibility so they don't end up getting locked into a long-term contract where they're having to pay for space that they're not using,” Willmott said. He added that these companies don’t want to assume the costs and responsibilities for building out and operating a space when they don’t have to.

“These large organizations are recognizing that they need to focus on their core business, and they're able to outsource to us everything to do with the workspace. And they're agile. 

“So as their head count changes, as their work styles change and as their priorities change, they can have workspace that will move at the same speed as their decision-making.”

Startups aren’t iQ’s primary customers

Companies with billion-dollar valuations are leading the charge in these moves to co-working spaces in markets where they don’t have head offices, according to Willmott. He has noticed many small and medium-sized organizations are now seeking more traditional office space where rents may be lower but they’re not getting an all-inclusive solution.

“The startup community is not our customer,” said Willmott, who acknowledges that goes against the perception many people have of co-working companies and spaces.

iQ’s leases are generally 12 months, but can range from six months to three years, depending on the user and its decision cycle. 

“Companies are recognizing that the best chance they have of getting people into the office and using the workspace investment as a driver for growth, and getting that return, is to outsource to a group like us,” Willmott said. 

Business is good for iQ now and Willmott believes current trends will continue. He expects that in the future, more companies will consider workspaces as a service that can drive returns and demand shorter and more flexible lease terms. 

While there’s nothing to announce at this point, Willmott said  iQ is looking at expanding in its current markets and considering moves into other Canadian cities as well.