Q1 2024 Toronto Office Market Report

In the first quarter of 2024, the office market vacancy rates increased from 11.9 percent to 12.1 percent and are projected to increase over the following quarters in the GTA. Availability rates also rose from the previous quarter’s 14.2 percent to 14.8 percent.

We are seeing a significant decrease in velocity. Some subleases have been on the market for years, with some being taken off the market altogether because of a lack of activity.We are still seeing that “quality” is the operative word in the office market. Many built-out spaces are more attractive to tenants as having existing furniture and facilities is becoming more of a standard in the downtown market. We have observed a general slowdown in the office market. More companies are asking employees to come into the office, which is a trend we have been seeing in recent quarters.

Vacancies are expected to remain high and demand relatively low. We project to continue to see a gap in landlord/tenant expectations, with tenants expecting more wiggle room from landlords, given the state of the current market. We are anticipating seeing some B and C-class buildings being converted and redeveloped, as their landlords are struggling to fill the occupancy in these buildings.

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