Behind the Vacancy

Decoding the Downtown Toronto Office Market

Over the past four years, Toronto’s Downtown office market has been characterized by soaring vacancy rates, climbing from record lows to near-record highs. In 2024, however, the tide has begun to turn. Vacancy rates have remained around the 17%-range for three consecutive quarters, reaching 17.2% in the third quarter—one of the highest levels in three decades. On the positive side, the rapid increase in vacancy began to stabilize, with quarterly gains averaging only 40 basis points (bps)—compared to the steep 70 to 100-bp increases recorded in 2023 and 2022. 
 
While the current market may appear highly competitive and favorable to occupiers, this surface-level perspective misses the complexity beneath. The office market is far from uniform, presenting a diverse and complex landscape. High-performing, in-demand properties in prime locations continue to lead the pack, while over half of the market vacancy is concentrated within a small fraction of the overall inventory. Meanwhile, the surge of available sublease space—a key driver of recent vacancy spikes—has stabilized. 
 
Our Behind the Vacancy report offers an in-depth analysis of these dynamics, providing valuable insights into the underlying dynamics of Downtown’s office market.