Greater Toronto Area

Office Market Report

Second Quarter 2021

The possibilities of a hybrid workplace have helped shift occupiers’ mindset from ‘will we ever return to the office?’ to ‘when and how?’.

It has been five quarters since the onset of the pandemic and although key indicators in the Greater Toronto Area (GTA) office leasing market are underperforming, the conversation among occupiers and landlords is changing.

Quick Stats

7.3%

Overall downtown office vacancy rate —eclipsing the 7.1% high during the global financial crisis

187

GTA buildings with more than 50,000 sf available vs. 97 at the start of the pandemic

7.2 msf

GTA-wide available sublet space — up from 3 msf one year ago

32%

Downtown sublet space as a proportion of total available space vs. 22% in the suburbs

9.8 msf

GTA-wide office area under construction — almost 50% to be delivered by year-end 2022

Occupiers’ focus for the time being will be on successful deployment of flexible office solutions. The frequency of remote versus onsite work will vary by industry, function, and location, not to mention personal circumstances and preferences.

Some positions will always require more in-person collaboration, just as some personalities prefer more or less social interaction. Offices are uniquely good at supporting certain worker needs and will continue to be a vital component of workplace strategy.

121

Full floors available for lease downtown, out of 337 under construction

2

Year-to-date downtown lease transactions 100,000 sf+ vs. 20 in all of 2018

1%

Suburban office area under construction as a proportion of suburban inventory vs. 11% downtown


GTA Sublet Availability - All Classes

GTA Occupancy Costs - All Classes

Tour activity is rising and companies that were trying to shed office space on the sublet market are reversing course, anticipating more employees will return.

Click the link below to download the latest GTA Office Market Report.

GTA-wide availability (14.8%) and vacancy (8.9%) rates trended higher, but less sharply than in previous quarters. Though one quarter does not constitute a trend, total available sublet space declined slightly between quarters to 7.2 msf (25% of total available space).

Development remains steady with 9.8 msf underway (65% preleased / equal to 5% of inventory) – almost 50% to be delivered by year-end 2022.

GTA Overall Availability & Vacancy Trends

GTA Overall Absorption Trends

GTA Overall New Supply Trends

In development news,

Hines kicked off T3 Sterling East and West, its latest mass timber undertaking downtown following T3 Bayside in 2020 – this time with partner Hazelview Investments.

Image source: Hines

For more market information

Bill Argeropoulos Principal, Practice Leader, Research, Canada bill.argeropoulos@avisonyoung.com +1 416.673.4029

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