Toronto Downtown Office Figures Q1 2025

–       Strong leasing activity seen in January and February of 2025 marshalled the overall vacancy in Downtown Toronto to drop 50 basis points (bps) quarter-over-quarter to 18.0% in Q1 2025. A net positive absorption of 261,999 sq. ft. helped bring the vacancy down while the share of sublease vacancy expressed as a percentage of overall vacancy also dropped 250 bps quarter-over-quarter to 18.7%.

–       Despite the austere attitude adopted by occupiers looking to mitigate their financial obligations in this turbulent economy, the trophy asset class has consistently witnessed transactional activity, particularity in the higher floors. This originated from occupiers driving positive net absorption, which came in at 67,427 sq. ft. for Class AAA in Q1 2025, leading to a AAA vacancy rate of 7.3%.

–       Overall weighted average asking net rents in Downtown Toronto saw a surge in Q1 2025, ending the first quarter at $35.90, an increase of $0.96 or 2.7% quarter-over-quarter. This is the highest net rent reading in the previous seven quarters. Despite heavy inducements offered across the Downtown assets, Class AAA net effective rents are starting to creep up as they trail the strong demand seen in the trophy buildings.