Toronto Downtown Office Figures Q4 2023

February 9, 2024 5 Minute Read

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    Vacancy in Toronto’s downtown office market hit yet another all-time high at 16.7% as the market continued to face uncertain economic conditions. Physical occupancy continued to push higher, creating tailwinds amid current headwinds. Well capitalized occupiers sought out quality office space with legal and educational users in the market having sizable mandates.

    Transactional activity totaled roughly 767,000 sq. ft. in Q4 2023. October and November recorded strong activity of 320,000 sq. ft. and 313,000 sq. ft., respectively. The holiday season observed a slowdown with December coming in at 134,000 sq. ft. Average monthly leasing activity in 2023 was approximately 277,000 sq. ft., well below the 326,000 sq. ft. witnessed in 2022.

    Rental rates have paused their downward trajectory with a slight uptick to end the year due in part to recent completions asking best-in-class rates. Significant deliveries this quarter include Phase I at T3 Bayside, as well as T3 Sterling in the west end. In Q4 2023, weighted average net rents in the Downtown market increased by 1.0% quarter-over-quarter from $34.56 per sq. ft. to $34.91 per sq. ft. in Q4 2023.