While Q4 2021 saw strong momentum of economic and office leasing activity in the Greater Toronto Area, the emergence of the Omicron variant forced companies to once again rethink their return to-office expectations as many postpone their return-to-office plans.
Absorption for the GTA netted positive this quarter at 751,123 square feet, mostly attributed to the delivery of predominantly pre-leased new supply projects in the Downtown East market. Menkes’ LCBO Tower and both Waterfront Innovation Centre buildings were completed, totaling 1.2 million square feet of new inventory.
GTA vacancy increased by 230 basis points (bps) year-over-year to 8.7%; meanwhile, the amount of sublease vacant space decreased by 262,191 square feet.
2022 is poised to test the viability of hybrid work models in the long run, as landlords and occupiers rebuild confidence in the office as a tool for enabling company growth and longevity.