TORONTO – A new report shows Canada’s downtown office vacancy rate marked its first, if slight, improvement since the start of the pandemic.
The CBRE Group Inc. report shows the national downtown office vacancy rate dipped to 19.9 per cent in the first quarter after hitting a record high of 20 per cent in the previous quarter.
The report says both Toronto and Vancouver saw declining vacancy rates despite the overhang of tariffs, but that the overall market remains in limbo and the effects of trade tensions will become more clear next quarter.
New supply coming onto the market has been helping push vacancy rates up in recent years, but the first quarter was a rare one when no new supply was added downtown while some 400,000 square feet were taken off the market for conversion or demolition.
The combined downtown and suburban office vacancy rate, which has been bouncing around a narrow range in recent quarters, stood unchanged from the previous quarter at 18.7 per cent.
CBRE says the industrial real estate market is likely to be more hit by tariffs, but that in the first quarter it still showed relatively solid net absorption.
This report by The Canadian Press was first published March 31, 2025.
