Greater Toronto Area
Office market report
Third Quarter 2021
The Greater Toronto Area (GTA) office market’s gradual recovery from the impacts of the pandemic continued during the third quarter of 2021, building on the momentum reported in the previous quarter.
Although several major banks and professional services firms have announced further extensions to work-from-home in response to ongoing concerns about the Delta variant and the logistics of flexible work arrangements, other companies continued the gradual return to in-person work.
Quick stats
7.6%
Overall downtown office vacancy rate – up from 2.1% in first-quarter 2020
179
GTA buildings with more than 50,000 sf available – down from 187 one quarter earlier
6.9 msf
GTA-wide available sublet space – down 4% quarter-over-quarter
30%
Downtown sublet space as a proportion of total available space vs. 21% in the suburbs
9.6 msf
GTA-wide office area under construction – equal to 5% of existing inventory
Net absorption across the GTA remained in negative territory during the third quarter (-510,000 square feet (sf)); however, the extent of the losses in occupied area declined for the second consecutive quarter. If this trend continues, the market could post positive net absorption within the next two quarters. GTA-wide availability (15%) and vacancy (9.1%) each inched upward by 20 basis points (bps) during the quarter, as the increase in both metrics continues to level off.
116
Full floors available for lease downtown, out of 328 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
Downtown’s availability (12.9%) and vacancy (7.6%) rates ticked upward during the third quarter, but the rate of increase slowed as it has across the GTA overall. Vacancy is expected to continue rising in the near-to-medium term as new supply deliveries, backfill space and companies adjusting their workplace strategies and return-to-office plans all contribute to the amount of vacant space.
Available sublet space declined for the second consecutive quarter, ending the third quarter just above 3 million square feet (msf) (30% of available space downtown) – down from the peak of nearly 3.3 msf in the first quarter of 2021.
GTA Overall Availability & Vacancy Trends
GTA Overall Absorption Trends
GTA Overall New Supply Trends
Construction continues apace downtown,
with 8.6 msf underway (65% preleased). One project was completed during the third quarter – Lifetime Developments' 147 East Liberty St. (108,000 sf).
Steven Preston Research Manager, Downtown Toronto steven.preston@avisonyoung.com +1 416.673.4010
Anthony Hong Research Analyst anthony.hong@avisonyoung.com +1 905.283.2392
Charles Torzsok Research Analyst charles.torzsok@avisonyoung.com +1 905.968.8023
© 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.
