Canada’s Office Market Takes Biggest Hit in a Decade
The office market in Canada’s major cities experienced its largest negative quarterly net absorption in more than a decade during Q3 2020, according to JLL, totaling nearly 2.7 million square feet of occupancy losses. The national vacancy rate rose by 60 basis points to 10.8 per cent. But, while
Published -
Nov 16, 2020 3:40 AM
The office market in Canada’s major cities experienced its largest negative quarterly net absorption in more than a decade during Q3 2020, according to JLL, totaling nearly 2.7 million square feet of occupancy losses. The national vacancy rate rose by 60 basis points to 10.8 per cent. But, while a quick glance at vacancies in JLL’s third-quarter national office report may be disheartening, the numbers don’t seem as bad once you dig deeper due to the strength of the market at the beginning of 2020. The increase was overwhelmingly driven by downtown markets, which contributed 60 per cent of occupancy losses through new sublease vacancies and direct availabilities turning vacant amidst low levels of leasing. However, with the exception of Edmonton and Calgary, most downtown markets continue to boast historically low vacancy rates. Toronto’s central business district vacancy rate was 3.8 per cent, the lowest in North America. Vancouver at 5.7 per cent and Montreal at 7.7 per cent had the second- and fourth-tightest markets on the continent. Q3 2020 was the first where suburban office markets experienced negative net absorption since Q2 2019. Year-to-date net absorption remained positive at close to 770,000 square feet.