Office towers are photographed in Toronto's financial district on Wednesday, June 27, 2018. Avison Young says Toronto's downtown office vacancy rate was 12 per cent in the second quarter, up from 11.6 per cent in the first quarter. THE CANADIAN PRESS/ Tijana Martin
TORONTO – Avison Young says Toronto’s downtown office vacancy rate hit 12 per cent in the second quarter, up from 11.6 per cent in the first quarter to continue an upward trend.
It says the rate is far higher than the 2.1 per cent the market was at in the first quarter of 2020, before the COVID-19 pandemic led to a surge in vacancies.
The firm says that along with about 9.9 million square feet of vacant office space, available sublet space is up about 67 per cent from last year to 4.5 million square feet to bring the total availability in the core to 17.5 per cent.
The greater Toronto office market had a vacancy rate of 13.6 per cent, while adding in available sublet space, which was up 42 per cent from last year, brings total availability to 18.1 per cent.
With demand for traditional office space still below historical levels, the firm says some developers have repurposed some new office construction projects to cater instead to lab space for the life sciences sector.
Avison Young says it expects availability and vacancy to continue rising in the short term.
This report by The Canadian Press was first published July 25, 2023.
