Suburban Markets Drive Positive Office Leasing in Canada for First Time Since Pandemic

CBRE report highlights a shift towards suburban office spaces, with Toronto leading the demand despite rising vacancy rates in major downtown areas.

Canada is experiencing its first year of positive office leasing activity since before the pandemic, with six of 10 major markets recording net positive demand in Q3.
Toronto saw the highest office space commitments, with over 650,000 square feet of positive net absorption split between downtown and suburban areas.
Suburban markets have shown improvement for the fifth consecutive quarter, with the national suburban vacancy rate dropping to 17.3%, while downtown vacancy rates rose to 19.7%.
A gap is emerging between older office buildings and 'trophy assets,' the latter seeing a decline in vacancy rates due to increased demand, particularly in Calgary and Toronto.
Sublet space has decreased for the fifth consecutive quarter, with national sublet space at its lowest level in nearly two years, indicating a healthier office market.