Toronto Office Space Hits Record Vacancy Rate, Availability Surges Downtown

The flight from Toronto office space was supposed to be temporary, but it doesn’t look that way. Global commercial real estate giant Avison Young data shows Greater Toronto offices hit a new record vacancy rate in Q1 2024. Even more space is available to rent, as more tenants look to shed the pricey rentals through subleases. 

Nearly 1 in 7 SQFT of Office Space In Greater Toronto Is Vacant

Greater Toronto is seeing vacant office space surge. The vacancy rate for the region climbed 40 basis points (bps) to 13.7% in Q1 2024, and 150 bps higher than last year. Roughly 1 in 7 sqft of office space is vacant, the highest rate going back to at least 2000. 

It’s not just a suburban issue either, with Downtown Toronto seeing the issue intensify even faster. Downtown saw the vacancy rate climb 90 bps to 14.3% in Q1 2024, overrepresented compared to the region. The vacancy rate surged a whopping 170 bps since last year, as the city’s downtown hollows out. But wait, there’s more! 

Toronto Office Space Availability & Vacancy Continues To Climb 

Source: Avison Young. 

Greater Toronto Has Even More Office Space Available For Rent

The availability rate represents the share of total office space available to rent. It combines the vacancy as well as leases looking to end or sublease, meaning even more space is available. 

Greater Toronto’s office vacancy rate climbed 20 bps to 19.5% in Q1 2024. This represents a 100 bps increase from last year, and nearly 1 in 5 sqft of office space is on the market. 

Once again, not just a suburban issue as many might assume. The availability rate in Downtown Toronto rose 90 bps to 19.1% in Q1 2024, up 170 bps from last year. Despite this, prices haven’t made much of a move over the period.  

The agency attributes the shift in space to a combination of factors. Most notable, workplaces shifting preferences as well the construction of new office space contributing to the total availability.  

There are some signs of firming, with average rents still showing some stable growth for Class A and Class B office space. Trophy office space hasn’t been so lucky, at roughly the same cost it started 2020 with, despite increased operating expenses.  

However, the path forward isn’t crystal clear. The agency warns the next few quarters will see some large tenants take possession of newly completed spaces. The former premises vacated may contribute to further woes if new tenants don’t materialize fast. 

10 Comments

COMMENT POLICY:

We encourage you to have a civil discussion. Note that reads "civil," which means don't act like jerks to each other. Still unclear? No name-calling, racism, or hate speech. Seriously, you're adults – act like it.

Any comments that violates these simple rules, will be removed promptly – along with your full comment history. Oh yeah, you'll also lose further commenting privileges. So if your comments disappear, it's not because the illuminati is screening you because they hate the truth, it's because you violated our simple rules.

  • RW 1 month ago

    Have you driven downtown lately? Fewer people, less cars, but it now takes 20 minutes to go from Yonge to Bay. There’s no customers at any of the shops, and the PATH is now like something out of a zombie apocalypse movie.

    If Toronto wants to make King St a bike path for a few people on the weekend, so be it. But it destroyed the economic hub of the country, and that means the city will no longer command the premium it once did.

    Might as well move the TSX to Muskoka, because that’s where everyone with an office space in the towers now works.

    • Fazid 1 month ago

      Someone finally said it. The whole city’s planning dept is made up of incels trying to fit people into single-serve rental units, so it can be like the frat they dreamed of joining but got rejected from.

    • Mortgage Guy 1 month ago

      What’s amazing here is the fact the operators of these buildings gave discounts to keep tenants if they told them to return to the office, and they just got a bunch of people quitting. LOL.

    • Steel City Police 1 month ago

      Agreed. The european model. The problem is, we don’t have a european society and that model doesn’t work here. Their streets were built way before our streets. So they needed to work with what they had.

      Also, factor in the green movement the gov thinks is best for its citizens.

    • D 1 month ago

      I work downtown and your comment is baloney. The path is busy Monday-Thursday. Many of the popular takeout spots have 10 minute lineups at lunch. You cannot get into a happy hour bar on even on a Monday after work without booking a reservation well in advance. I would recommend getting out of your car and actually walking around and spending some time downtown to make sensible observations.

      • Timmy 1 month ago

        I don’t know what you’re talking about. Like half the stores are vacant in the path now. Did you work there pre-2020? Those fancy boarded-up walls used to be shops, it just looks like miles of walls now to hide the fact no one is willing to rent it at the same price it went for in 2019 with 30% less traffic.

        • D 1 month ago

          Can’t speak for the entire Path system but King and University is busy. I counted one boarded up restaurant out of about 20 on my 10 minute walk at lunch today.

  • Trevor 1 month ago

    It’s the cost of living in Toronto. It’s hard to get employees to come into the office, especially junior roles. They all have to live so freakin’ far, especially if they have kids—and even then, they’re stretched with budgets.

    It’s not due to a shift of work. Hamilton and Ottawa have lower office vacancy rates, even though they have prices now pushing the limits of sanity.

  • Daniel Ko 1 month ago

    Haven’t the Communists that run Toronto made it clear they don’t want anyone from the province commuting into the city to work? Now they get to sleep in the bed they made—the single, bunk bed.

    Meanwhile, Markham offices seem pretty normal these days.

  • Sergey 1 month ago

    Torontois being run by capitalists liberals. Where have you seen communists is inclear. Have they nationalized all means of production, assets and real estate? No, it is all of capitalism doing. It is how markets working. All investments must rise in value and the less risk yhe more money is going there. The least risk is real estate speculations.

Comments are closed.