Downtown Toronto’s office-vacancy rate hit a record in the second quarter as fears of a slowing economy and the persistent popularity of remote work curtailed appetites for new space.
The rate rose to 11.9 per cent as nearly half a million square feet of space that became available downtown in Canada’s financial capital failed to find a tenant, according to a report Wednesday by commercial brokerage CBRE.
With inflation running at its hottest in decades and central banks jacking up interest rates to rein it in, economists see the chances for a recession increasing across the developed world. Canada, where those odds stand at one in four, is no exception. The increasingly cloudy economic outlook has made firms more hesitant on new office leases and reluctant to reverse the remote-working arrangements they’d adopted during the pandemic.
“Heightened economic and tech-sector uncertainty saw many Toronto tenants put new leasing on hold,” CBRE said in its report.