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Vancouver ties Toronto for North America’s lowest office vacancy rate

Monday, July 15, 2019

According to CBRE’s Canada Q2 Quarterly Statistics Report, Vancouver and Toronto now share the top spot for record-low office vacancy rate in North America. Vancouver’s office vacancy dropped to 2.6 per cent in the second quarter of 2019 while Toronto’s remained stable at 2.6 percent amid a construction boom in the city’s core.

Followed by San Francisco at 3.6 per cent, the three tightest downtown markets in North America are tech hubs.

“Two years ago, it would have been unprecedented to have a Canadian city top the North American office rankings. We now have two Canadian cities setting the pace, which is truly remarkable,” said CBRE Canada vice-chairman Paul Morassutti in the press release.

Other highlights in the report include:

  • This record-low vacancy is producing record-high rental rates. The reports said that Average Class A net asking rents in Toronto’s financial core crossed the $40.00 per sq. ft. (psf) threshold for the first time ever in Q2. Cadillac Fairview and IMCO’s 1.2 million sq. ft. development at 160 Front Street West officially broke ground this quarter and Allied Properties and RioCan’s King Portland Centre, located at 602 – 620 King Street West – completed construction this quarter – introduced 255,565 sq. ft. of new inventory to the Downtown West submarket and was 100.0 per cent pre-leased upon completion.
  • Vancouver’s average Class-A downtown office rents jumped to a record $44.00 psf in Q2, up from $42.02 psf a quarter earlier.
  • Ottawa’s office vacancy dropped to 7.0 per cent in Q2, down from 9.9 in the same quarter last year, owing to increased demand and limited new supply.
  • Calgary’s downtown office vacancy rate continued its slow decline to 26.1 per cent in Q2, down from all-time high of 27.8 per cent a year ago.
  • Adding to Edmonton’s budding technology scene, Q2 2019 saw an increased level of activity in Downtown Class A product from a variety of technology users, including software and research and development companies.
  • After experiencing four consecutive quarters of vacancy rate increases, Winnipeg’s overall vacancy rate remained flat at 11.0 per cent in Q2 2019. Leasing activity was strongest in the city’s suburban market which recorded 40,575 sq. ft. of positive net absorption in the quarter.

The complete report can be found here.

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