Toronto Offices Are Back (Seriously)

🏢 Toronto Office Market Bounces Back

Source: CBC

The 411: Toronto’s commercial real estate market just posted its first sustained growth since the pandemic. For the first time since 2019, more office space was leased than vacated in 2025.

• Toronto’s office market grew in 2025 for the first time since 2019, with more space leased than vacated.

• Office availability dropped from 21.2 percent to 19.2 percent year over year

• CoStar reports roughly $250 million in transactions since mid-2025, signalling stabilizing demand

• CBRE forecasts $56 billion in commercial real estate investment in 2026, up from $47 billion last year

• The rebound is largely driven by return-to-office mandates from the province and major banks

• Demand is strongest for “trophy” downtown towers near Union Station and higher order transit

• Tenants are prioritizing buildings with PATH access, restaurants, gyms, and upgraded layouts to make offices “commute worthy”

• Despite gains, about 35 million square feet remain available across the GTA
  • Lower-quality buildings outside the core face leasing challenges without upgrades
  • Geopolitical risks and recession fears remain watchlist items for 2026

Why This Matters: The office rebound isn't organic, it's mandated. Governments and banks are forcing workers back, propping up demand for Class A space. That means capital, tenants, and future value are concentrating in prime locations, leaving everything else behind. If you're betting on office, location and quality just became the only things that matter.

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