Canadian office space demand stable in first quarter

25-May-2025

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According to CBRE’s Q1 2025 Canada Office Figures, the first quarter of 2025 was positive for Toronto’s downtown office market, with vacancy declining by 50 basis points to 18.5 per cent.

CBRE noted that this marked the first substantial vacancy rate improvement in Canada’s largest city since the first quarter of 2020, as a result of healthy business activity at the start of the year.

Muted activity was noted at the start of 2025 across seven markets, each reporting less than 100,000 sq. ft. of net absorption, either positive or negative.

Vancouver was the only other Canadian city to post significant positive net absorption of office space in the first quarter, driven by activity in trophy buildings, dropping its downtown vacancy to 10.7 per cent.

“The Canadian office market was poised for a rebound and while there are pockets of positivity, the office market, like much of the economy, is in wait and see mode,” said CBRE Canada chairman Paul Morassutti. 

“It’s unclear how much renewed momentum there is and to what degree tariff-based uncertainty is affecting decision-making. We should have a better idea in the second quarter of what the tariffs really amount to and how businesses will respond.”