"In Q1 2020, at the onset of the pandemic, the national office vacancy rate was just under 8% according to commercial real estate services firm Colliers. Since then, it has been steadily increasing every quarter until about midway through 2025, when it peaked at 14.9%. We are now over the hump, and the national office vacancy rate is beginning to decline as governments and institutions - and large companies - continue mandating employees return to office."
"According to AI-powered modelling and economic forecasts, Colliers says the national office vacancy rate is projected to decline back down to 8% by Q1 2029 - close to a decade after we first learned of the pandemic. According to Colliers, the average in-office mandate has also been steadily increasing. In Q4 2022, the average was 2.5 days with about 49% of companies finalizing that plan."
"Those numbers jumped to 3.0 days and 55% by Q2 2023, 3.3 days and 62% by Q4 2023, and was at 3.5 days and 68% following Q4 2025. "In the second half of 2025, downtown Toronto saw high levels of leasing activity not seen in well over a decade," said Senior Managing Director of Brokerage Jon Olynick in a Colliers report published last month. "Return to office mandates by the Big Banks and the provincial government was a dominant factor, which has also carried over into Q1 2026.""
"Such leases from the past two quarters include CIBC leasing 258,197 sq. ft at 8 Spadina Ave ( The Well) and Scotiabank leasing 63,461 sq. ft at 3389 Steeles Avenue East (Steeles Technology Campus) in Q4 2025, and RBC leasing 326,347 sq. ft at 200 Front Street West (Simcoe Place) and Scotiabank leasing another 104,966 sq. ft at 351 King Street East (Globe and Mail Centre) in Q1 2026, the last of which was a sublease."
Office vacancy rates rose steadily after the start of the COVID-19 pandemic, moving from just under 8% in Q1 2020 to a peak of 14.9% around mid-2025. Vacancy rates are now declining as governments, institutions, and large companies require employees to return to office. Forecasting indicates the national office vacancy rate could return to about 8% by Q1 2029. Average in-office mandates have increased over time, reaching 3.5 days and 68% of companies by after Q4 2025. Downtown Toronto has seen leasing activity levels not seen in more than a decade, driven by return-to-office mandates from major banks and the provincial government, including multiple large bank leases and a sublease.
#commercial-real-estate #office-vacancy-rates #return-to-office-mandates #workplace-trends #toronto-leasing-activity
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