There is a pattern to many athlete endorsements. For many sports stars seeking a boost to their salaries, sports apparel and equipment, soft drinks and cars are common advertising targets. Mixed-use commercial real estate is not.
But on Wednesday, while Canadian tennis star Milos Raonic sweats it out at Wimbledon, a complex of office towers and retail space in the heart of Toronto's financial district will declare itself "home court" for the sport's highest-ever-ranked Canadian tennis professional.
Commerce Court, which counts CIBC and Stikeman Elliott among its office tenants, will announce a two-year sponsorship agreement with Mr. Raonic. It will kick off with his first appearance at the building complex next month.
With this deal, manager GWL Realty Advisors Inc. is looking for some love. With shiny new entrants in office space in the Bay St. vicinity – such as the RBC Dexia Centre and the Bay Adelaide Centre – boasting newer styles and environmental certifications, old bank towers are struggling to keep tenants from buying into the buzz.
"There's a lot of attention going to some of the newer towers being built, and we're trying to create some awareness around some of the older bank towers," said GWL president Paul Finkbeiner. He added that the complex is about to add some new tenants, as well.
The four buildings and underground space that make up Commerce Court currently have a 27-per-cent vacancy rate, far above the overall rate in downtown Toronto, which hovers just above 5 per cent, according to commercial real estate company Avison Young. And there are more challenges to come.
"We're now in the midst of another development cycle. More than likely, we'll see tenants drawn out of major towers in the development core," said Bill Argeropoulos, Avison Young's vice-president and director of research for Canada. That includes Deloitte & Touche, a major Commerce Court tenant that will be moving in 2015 or 2016 as the lead tenant in the new phase of the Bay Adelaide Centre.
"One of the challenges with all of these vintage towers is that they have higher tax and operating costs," Mr. Argeropoulos said. "They don't have the latest technology, the latest systems that the newer buildings offer. The leading green buildings are the buildings of the future."
GWL is hoping to increase community activities around the building in order to market the perks of being a tenant. Mr. Raonic will appear at the building when he is in Toronto and will host tennis clinics for tenants in the complex's courtyard. "Viewing lounges" in its west tower will provide seating for live screenings of events from the London Olympics and the Rogers Cup in August.
Terms of the deal were not disclosed.
While athletes are associated mostly with their big-name endorsements, it is not uncommon for them to make extra money with smaller, local business endorsements as well. But this type of deal is relatively new.
"He has numerous blue-chip global partners," said Graham Cross, Mr. Raonic's agent and vice-president of Lagardère Unlimited's tennis division. "Our goal is to continue that moving forward, but at the same time, we want him to have the Canadian connection."
Editor's note: GWL is the manager of Commerce Court. Information in the online version of this story has been corrected.