Q2 2024 Toronto Office Market Report

In the second quarter of 2024, the Greater Toronto Area (GTA) office vacancy rate reached an all-time high of 13.2 percent, up 1.1 percent from the previous quarter. The amount of space available is further reflected by the availability rate which also rose from 14.8 percent to 16.1 percent, setting another record.

The average net rent remains relatively stable; landlords are still guarded about lowering the face rates but are instead open to other concessions. This is leading to prolonged negotiations and further slowing down deals.

Looking ahead, vacancy rates are expected to continue rising for the remainder of the year. Given the current market, we anticipate new supply flattening over the next few quarters. Despite indications of weakening demand, there remains a need for office space, particularly among companies adopting hybrid-work models. Over the past four years, firms have experimented with hybrid arrangements and are now solidifying their approaches. The trend of hybrid work persists, with many companies requiring employees to be in the office at least three days a week, and some mandating daily attendance. Office space is far from obsolete; it’s evolving as companies rightsize and acquire attractive office spaces to encourage employee attendance.

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