Toronto’s office vacancies to triple by 2010: report

We’re going to have an upswing, but I don’t think it’s going to be as bad as CB Richard Ellis suggests here.
Posted: September 16, 2008, 9:46 AM by Eric Lam

Office vacancy rates in Canada will skyrocket by 2010, a report by commercial real estate firm CB Richard Ellis says.

National office vacancy rates held stead in the third-quarter of 2008, butCBRE says this is but the “calm before the storm.”

The national class A downtown office vacancy rate remained at 3.9% from Q2 to Q3, but CBRE predicts a massive influx of almost 4 million square feet of office space in Toronto and Calgary in late 2009 will skew that number to 5.9%.

Toronto represents about 35% of the total commercial market in Canada while Calgary clocks in at 12%.

The class A office vacancy rate in Toronto remained at 4.5% for Q3 while Calgary’s rose to 2.1% from 1.5%, reflecting a tight rental market in Canada. But once the new space floods the market, CBRE expects Toronto’s rate to triple to 12%. Calgary will be less affected because its new rental facilities will be introduced gradually over the better part of 2009.

“Beginning in 2010, both Toronto and Calgary especially will become a tenant market instead of an owner market,” CBRE President Stefan Ciotlos said in the report.

Elsewhere, Vancouver dropped to 2.1% vacancy from 2.9% in Q2, while Montreal also saw its vacancies shrink to 4.3% from 4.4%.

Eric Lam

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