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