Toronto Office Market Report

Urban core sees improved demand. Despite a significant wave of new supply in recent years — of the roughly 15 million square feet delivered since 2020, nearly 85 per cent was concentrated in the downtown — market performance has been shaped by a persistent flight-to-quality trend. Much of this space was delivered with strong pre-leasing, limiting the upward pressure on vacancy typically associated with large construction cycles. More recently, leasing momentum has strengthened, supported by solid office-using employment growth and return-to-work mandates. As Canada’s business capital, Toronto continues to see demand concentrate in centrally located, transit-oriented assets, particularly as more competitive net effective rents improve tenant economics. As a result, downtown Class A vacancy has continued to trend lower, reinforcing market bifurcation.