Greater Toronto Area
Office market report
First Quarter 2022
The Greater Toronto Area (GTA) office market’s journey back from the impacts of the pandemic continued in the first quarter of 2022.
The market posted a second straight quarter of stable and promising results as occupiers continued to make plans for the future despite another pandemic wave that delayed the return-to-office intentions of many into the second quarter.
Quick stats
8%
Overall downtown office vacancy rate – up from 2.1% in first-quarter 2020
186
GTA buildings with more than 50,000 sf available – up from 181 one quarter earlier
6.2 msf
GTA-wide available sublet space – up 1% quarter-over-quarter
23%
Downtown sublet space as a proportion of total available space vs. 19% in the suburbs
8.2 msf
GTA-wide office area under construction – equal to 4% of existing inventory
In Downtown Toronto, availability and vacancy rates both increased 50 bps quarter-over-quarter, to 14.1% and 8%, respectively. Delivery of new supply contributed to the rising vacancy rate, although net absorption was remarkably flat during the quarter, as the market gained only 1,400 sf in occupancy. The amount of space available on the sublet market also remained flat quarter-over-quarter at 2.6 msf as space added to the market was offset by space taken off the market or leased by subtenants.
100
Full floors available for lease downtown, out of 271 under construction
5
New office building completions across the GTA in Q1 2022, totaling nearly 994,000 sf
1%
Suburban office area under construction as a proportion of suburban inventory vs. 9% downtown
GTA Sublet Availability - All Classes
GTA Occupancy Costs - All Classes
Toronto’s Midtown market posted rising availability (up 20 bps quarter-over-quarter to 14%) during the first quarter, but vacancy declined 20 bps to 8%, thanks to net absorption of 53,000 sf – the market’s first quarter of positive absorption since the pandemic began in 2020.
The GTA’s suburban markets collectively posted rising availability (up 50 bps to 17.1%) and vacancy (up 10 bps to 10.5%) in first-quarter 2022. The West market had the GTA’s highest availability rate – up 30 bps quarter-over-quarter to 18.2% – although vacancy remained stable at 11.5%. In the Toronto North and East markets, overall availability was up 70 bps quarter-over-quarter to 16%, while vacancy remained unchanged at 9.4%.
GTA Overall Availability & Vacancy Trends
GTA Overall Absorption Trends
GTA Overall New Supply Trends
Four downtown office projects were completed during the first quarter
– most notably Menkes Developments’ Waterfront Innovation Centre at 125-155 Queens Quay E. (461,000 sf / 83% preleased) and Carttera’s 65 King St. E., a 396,000-sf building fully preleased to Google. In the absence of large new development announcements, the amount of space under construction continues to decline, reaching 7 msf (64% preleased) at the end of the quarter. Almost all that space (5.4 msf) is scheduled for completion in 2022 and 2023.
Steven Preston Research Manager, Downtown Toronto steven.preston@avisonyoung.com +1 416.673.4010
Warren D'Souza Research Manager,
Suburban Markets warren.dsouza@avisonyoung.com +1 905.283.2331
Charles Torzsok Senior Research Analyst,
GTA Suburban Markets charles.torzsok@avisonyoung.com +1 905.968.8023
Charlotte Ishoj
Research & Administration Coordinator charlotte.ishoj@avisonyoung.com +1 647.252.4099
© 2021 Avison Young Commercial Real Estate Services, LP, Brokerage.
E. & O.E.: The information contained herein was obtained from sources which we deem reliable and, while thought to be correct, is not guaranteed by Avison Young. Acknowledgment: Data for graphs, charts and tables used in this report are sourced from Avison Young, Altus InSite and Realnet. Some of the data in this report has been gathered from third party sources and has not been independently verified by Avison Young. Avison Young makes no warranties or representations as to the completeness or accuracy thereof.
