The latest Toronto Office Market Report by CBRE shows commercial vacancy rates in downtown Toronto decreased by nearly half a percent in the third quarter of 2012, dropping to 5.1% from 5.5% quarter over quarter. There is an increasing trend of tenants moving from suburban locations to downtown. Large tenants such as Telus, now located in Telus House at 25 York Street, and Coca-Cola at 333 King Street East, have already moved or signed deals to move downtown. Many others are actively looking to relocate to the core in the near future. 

Telus House at 25 York, Toronto Condos, Menkes, &Co Architects, AdamsonTelus House at 25 York Street, image by Menkes

A major contributing factor to this shift in office location is the condo boom that has been driving the downtown residential real estate market over the last number of years. Companies want to attract and retain highly-skilled workers. There is a growing concentration of these workers living in the downtown area, so companies have begun to locate where they can recruit nearby talent.

Bay Adelaide Centre, Toronto Condos, Brookfield Properties, WMZH/KPMB/AdamsonBay Adelaide Centre, image by Brookfield Properties

A number of office developments under construction are profiled on UrbanToronto, and are a reflection of the statistics outlined in the CBRE report. These include the Bay Adelaide Centre East (to be occupied by Deloitte), RBC WaterPark Place (to be occupied by RBC), as well as the new home of the Globe and Mail at the nortwest corner of Front and Spadina.

RBC Waterpark Place III, Toronto Condos, Oxford Properties, WZMH ArchitectsRBC Waterpark Place III, image by Oxford Properties

The development of downtown continues with new residential space attracting professionals who want to live, work and play in the city. Companies have taken notice of this trend, which has in turn influenced office development in the downtown core by commercial property developers such as Oxford and Brookfield.