A dragon on Dragon’s Den and co-founder of e-commerce investor Clearco, where she recently stepped down as CEO, Michele Romanow gives us the scoop on Toronto’s office spaces and more in 2023.
What does Shopify subletting their new Toronto office space mean for the commercial real estate market?
I’m still bullish on us needing physical office space to collaborate with colleagues. I think it will be one of the new differentiators with high performing teams over the next few years, and I fully expect more people to return to office in the spring when the weather gets nicer. I do think we’re going to need a reset of our office footprints, with spaces designed for a few days a week versus five.
Will workers who made the move out of the city during the pandemic have to make the choice to relocate back here in the future with hybrid work models?
That’s really a personal choice for individual employees to make; if someone wants to live an hour plus away and commute, all power to them. But the energy of cities will pull more workers back downtown, especially those younger employees who are looking for a balance of food, nightlife and culture, all within walking distance.
Will office buildings be turned into housing in the future?
Some companies will increase their footprint to attract the best and brightest talent. Others will cut back on traditional office space in favour of more hybrid models. This really puts a premium on mixed-use buildings, including the one we’re in. Those footprints are significantly more resilient, and by being more flexible and less reliant on one income source, they make for better investment. We need a continued smart conversation between the private sector and government to ensure all of our spaces are being used as efficiently as possible.
Many companies, including Clearco, are undergoing layoffs. Is this a sign of a recession?
At its core, yes, we are in the midst of a recession. The current macroeconomic environment looks very different today than just a year ago. We have rising interest rates, high inflation, a war in Europe, all compounded with a slowdown in e-commerce growth. We, like many companies, hired too quickly, growing our head count at an unsustainable rate for the e-commerce landscape.
What do you predict happening in the tech industry to survive the recession ahead?
Some of the best and most recognizable companies were built in 2008 — think Uber, Airbnb, WhatsApp, Instagram. I’m very confident we’ll see more great companies being built and funded in 2023. We’ve already seen a huge wave in AI and while it can seem stormy on the outside, we’re going to see some incredible founders emerge in the next year. I personally can’t wait to see them.
For Michele Romanow’s thoughts on Toronto becoming a tech superpower, click here.