Q3 2023 Toronto Office Market Report

The third quarter of 2023 saw an overall steady increase in vacancy rates across the Greater Toronto Area and they will continue to do so for the foreseeable future. Much of the new projects have already hit the market or are slated to be released in the short term, which is contributing to the high vacancy rates. Currently, there are no new developments proposed for post-2025, which will likely cause vacancy rates to level off.

Despite the increased vacancy rates, quarter over quarter, the net rents remained relatively consistent increasing by $0.02 to $23.52. Landlords continue to provide incentives such as free out of term rent or tenant improvement allowances, rather than decreasing their face rates.

The sublease market still continues to climb as companies seek a flight to quality. With subleases sitting on the market for longer than usual, these spaces will likely come back to the Landlord to re-lease and will likely require improvements. This will add greater pressure on Landlords to be more creative in their incentives to get the deal done and space leased.

Download the full report to learn how the current market conditions may affect office tenants.