Downtown Toronto's Office Vacancy Rate Hits New Low
Toronto’s downtown office vacancy rate hit a new low in the third quarter, according to a new Avison Young report.
The report found Toronto’s red-hot downtown market had reached another milestone with overall availability (6.4%) and vacancy (2.7%) falling to historic lows — backed by a solid performance by Class-A buildings in the Financial Core and Downtown South.
“Large-block requirements for immediate occupancy are virtually nonexistent, with little or no relief in sight for at least 24 to 36 months — keeping upward pressure on rents,” the report concludes.
Overall, the report found GTA office leasing markets remained robust in the third quarter in all five office districts as occupied space increased by 827K SF. Demand was evenly distributed between downtown/midtown and the suburbs.
Toronto’s overall availability rate inched closer to single-digit territory, falling 60 basis points quarter-over-quarter to 10.4%, down 80 bps from a year ago.
GTA vacancy declined 40 bps to a nine-year low of 6.8% and continued to move toward historic lows not seen since the beginning of this century.
The report attributed downtown Toronto’s strong growth partially to a growing interest from creative companies in the technology, advertising and media industries, which are attracting a steady diet of venture capital.