Q4 2024 TORONTO OFFICE MARKET REPORT

WORKPLACE

The Greater Toronto Area (GTA) office market continued to face challenges in Q4 2024, with the vacancy rate increasing to 15.5%, up from 14.3% in Q3. Projections indicate this trend will persist, with vacancy rates expected to reach 16% by Q1 2025.

Layoffs and changes in workforce headcounts, particularly in the tech sector, are contributing to rising vacancies overall. The availability rate also climbed significantly, moving from 17.5% to 18.8%, as over 575,000 square feet of new inventory was added to the market during the quarter.

Demand remains concentrated on Class A office spaces with premium amenities and transit access, supporting rents in the mid-$40s to $50s per square foot. Conversely, Class B and C properties face higher vacancies, especially in suburban markets, where landlords compete fiercely with incentives and flexible terms.

As companies refine return-to-office strategies, hybrid work models and workforce-oriented solutions are driving a re-evaluation of space needs. The end of 2024 saw the implementation of new hybrid strategies, such as flexible scheduling, shared office spaces, and dedicated collaboration zones, as organizations prepare to enter 2025 with optimized office setups. This ongoing shift boosts demand for premium spaces offering flexibility and wellness amenities, reinforcing the GTA as a tenant-driven market.

What does all this mean for tenants? Download the full Market Report to find out.

January 29, 2025

TRANSACTION MANAGEMENT