I should post this on every office REIT board... Just goes to show that leasable space is not always a one-trick pony....
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Availability in the Greater Toronto Area’s office market was flat in the third quarter, according to a new report, marking one of the few occasions the metric has held steady in recent years.
Avison Young released its GTA office market report for the third quarter last week. It found the overall availability rate came in at 18.1 per cent and noted the availability rate for offices has been on an upward trend since 2020.
“This marks only the third time since Q1 (first quarter) 2020 that availability has remained flat quarter-over-quarter. Otherwise, it has consistently risen since the onset of the pandemic,” the report said.
“Stakeholders will be eyeing the market to see whether this key metric may stabilize or even begin to decrease in coming quarters.”
The overall vacancy rate was found to have risen by 50 basis points to finish the quarter at 12.5 per cent, the report said.
EDUCATION SECTOR DEMAND FOR OFFICE SPACE
Avison Young’s report found that overall demand among typical office tenants continues to be below historical levels across the GTA.
However, it said educational institutions such as public and private colleges and universities have been a source of supplemental demand for office space in downtown, midtown and the suburbs.
“Not affected by the same trends that have reduced many companies’ need for office space, educational institutions have taken advantage of the opportunity to expand their footprints in traditional office buildings,” the report said.
“Numerous transactions – both lease and sale – across the GTA have seen schools secure additional space adjacent to existing facilities as well as establishing new satellite locations.”
Newer buildings were also found to have a competitive advantage in the current GTA office market. The report noted that with a “wide range” of office space on the market, many tenants are seizing the opportunity to move to “better premises.”
As a result, the report said new buildings with modern amenities are appealing more to tenants.