In data reported by Avison Young, Q1 2024 revealed a historic surge in office vacancies across Greater Toronto. Vacancy rates hit 13.7%, the highest since 2000 with 1 in 7 square feet (sqft) unoccupied. Downtown Toronto’s vacancy rate reached 14.3%, with 1 in 5 sqft available for rent. The availability rate soared to 19.5% regionally and 19.1% downtown, indicating a surplus of office space. Despite this, prices remained relatively stable. Contributing factors include evolving workplace preferences and increased new construction. While Class A and B (learn about the different office classes here) office rents saw modest growth, trophy office space stagnated in value despite rising operational costs.

Challenges loom as large tenants move to newly completed spaces, potentially increasing vacancies unless new occupants fill the void. Experts advise that proactive measures must be taken to address the surplus in Toronto’s office market.