Office vacancies in downtown Toronto, Canada’s financial capital, rose to their highest point since 2008 as the era of remote work prompts companies to question their long-term needs for space.
The second-quarter vacancy rate was 10 per cent, up nearly a full percentage point from the first three months of the year and just shy of the 10.1 per cent rate reached at the start of 2008, when the world was rocked by recession, according to a report released Monday by commercial brokerage CBRE Ltd.
With the pandemic easing in the U.S., New York’s Wall Street is starting to come back to life, but Toronto’s equivalent, Bay Street, has remained largely locked down, with measures still in place to control a recent surge of infections. Canada’s financial executives have been less vocal than their American counterparts about urging a return to the office, citing the success of remote work.
In downtown Toronto, one of the tightest office markets in North America before the pandemic, the surge in vacancies appears to be slowing down as vaccination rates rise and the economy bounces back.
Much of the increase in vacancies over the past three months occurred in April, with the rate holding steady since then, according to the CBRE report. In a potential sign of rebounding demand, May saw prospective tenants touring downtown Toronto offices at their highest level since the pandemic began, the brokerage said.