The region's tenants continue to see significant shifts in their workplace strategies
Availability and vacancy in the Greater Toronto Area office market continue to creep upward, according to Avison Young.
The overall downtown office vacancy rate surged during the pandemic era, from 2.1% in Q1 2020 to 12% in Q2 2023. The overall availability rate across the GTA went up by 30 basis points on a quarterly basis to reach 18.1% during the second quarter.
“Workplace strategies continue to evolve, and even companies that have not downsized may now require less space than traditional assumptions would indicate,” Avison Young said. “Availability and vacancy are expected to keep rising in the short term as companies adjust their leased premises to their new needs.”
Amidst ongoing discussions about remote & hybrid arrangements, it's crucial not to overlook the prospects of the #office market. Check out @CMPmagazine for more on the importance of quality spaces & their role in shaping the modern workplace: https://t.co/FI9WF2x1n5 #AYdifference
— Avison Young | Canada (@AY_Canada) June 13, 2023
In particular, the life sciences industry is poised to significantly benefit from the current record-low demand for traditional office space, as many unused assets have recently seen conversions to cater to this sector’s needs.
“Some developers have repurposed their new office construction projects to cater to life sciences instead, capitalizing on the region’s booming demand for lab space,” Avison Young said.
“Because most existing office buildings do not have the ceiling height, separate loading areas, or infrastructure systems required to accommodate conversion to a life sciences use, developers who had new projects in the pipeline have an opportunity to make the switch before or even during the construction process.”
