All those new downtown condos that are now home to bright, young workers is helping drive demand for office space away from the suburbs and back into Toronto’s core, a new report says.
Also fuelling the increasing demand — so strong that the vacancy rate for downtown office space fell to 5.1 per cent in Q3 — is interest in new environmentally sound office towers, redevelopment of the waterfront and frustration with long commutes.
Toronto isn’t alone, according to commercial real estate brokerage Cushman & Wakefield’s Occupier Insight Report released yesterday.
Major U.S. cities such as San Francisco, Chicago, New York, Boston and even downtown Los Angeles are also seeing a significant shift from the suburbs, although their office vacancy rates are still more than double that of Toronto’s.
“Major downtown office markets in North America are thriving in the face of turbulent global economic conditions thanks to smart urban planning which has opened the doors to a younger, educated and plugged-in population that prefers to live, work and play close to home,†says the report.
But compounding that demand in Toronto is an unprecedented condo boom, with some 70,000 new units built in or close to the downtown core in the last five years, notes the report. Another 17,000 are under construction or due to open by year’s end.
That’s provided an instant workforce for the 4.5 million square feet of office space has been added to the downtown core in the last two years alone, with more coming especially in the waterfront area.
