The tech industry continues to propel leasing in Canada’s three largest office markets. Newly released findings from CBRE’s annual overview of markets deemed to be tech gateways show the industry leased 2.3 million square feet of space across Toronto, Montreal and Vancouver in 2025. Thus far in 2026, 1.4 million square feet of uptake equates to nearly one-third of office leasing in the three cities during the first quarter.

This year’s report also looks at 12 markets in the United States along with London and Paris. The Canadian markets are represented among the majority (12 of 17) where 2025 tech leasing surpassed 2023 levels. Toronto ranks in the top three for percentage gains along with Manhattan and Boston. Meanwhile, Los Angeles, Dallas/Fort Worth, Washington, D.C., Denver and Atlanta make up the smaller group of markets that lost ground, with the sharpest drops occurring in Los Angeles and Dallas/Fort Worth.

In the bigger office leasing picture, Toronto was one of just five markets where the overall vacancy rate declined last year, and it cracked the top five for net absorption growth, along with Manhattan, San Francisco, London and Silicon Valley. Vancouver and Montreal were also among the eight markets that recorded positive absorption last year — making it three for three in Canada — versus nine in the negative category, including Paris and eight U.S. markets.

Vancouver and Montreal both numbered among the 12 markets that posted rent growth last year, while Toronto fell into the minority, with Silicon Valley, Denver, Washington D.C. and Chicago, where rents subsided. Nevertheless, CBRE analysts conclude “rent growth thus far appears unrelated to tech and AI company growth in nearly all markets”.

Rather, they point to submarkets and “high-quality building categories” where tech industry leasing is flowing through into rent increases, including various submarkets in San Francisco, Silicon Valley, Seattle and Manhattan. Speaking as part of a CBRE-sponsored panel discussion at the Real Capital conference in Toronto earlier this year, Tyler Seaman, executive vice president with Oxford Properties Group, made a similar observation.

“Everybody talks about the impact of AI on jobs, but what about these AI firms themselves as users of office space?” he mused. “The nature of the space they’re taking is either new space or AAA trophy space because rent isn’t their problem. Access to power is their problem; access to talent is their problem. So, as they try to level up, they want really good office space that’s really well located.”

Toronto has seen roughly USD $7 billion of venture capital investment in AI over the past six years, which places it in the top 10 markets for such activity, largely on par with AI investment flowing into Austin and Denver. The report cites Oxford Analytics’ projections that tech job growth will be lower than 2 per cent in Canada in 2026, but that would still outperform expected job growth of less than 1 per cent in the U.S. and Europe.

“The costs required to build AI infrastructure and develop models and tools have created a capital crunch and put an emphasis on reducing operating expenses,” CBRE analysts state. “Many tech companies are repositioning their workforces and capital expenditures toward AI development and deployment that has resulted in a growing number of job cuts.”