Lack of the Office: UTPro Report on Toronto’s Continuing Decline of New Office Development

For decades, Toronto’s skyline has been shaped by office towers. From Scotia Plaza to the TD Tower, new office developments have long been seen as a sign of economic prosperity and growth. But UTPro data now paints a different picture: the development of new office space in Toronto has plummeted.

Newly completed downtown office tower, 160 Front Street West, image by UrbanToronto forum contributor mburrrrr

The COVID-19 pandemic reshaped work habits, and its impact on commercial real estate has been severe. Remote and hybrid work models have persisted longer than many expected, particularly in Toronto. This has led to a reducing demand for new office space. The result? A drastic slowdown in new office construction, as shown by our latest figures on office Gross Floor Area (GFA) under construction and proposed developments.

Construction of Office Space Has Fallen Off a Cliff

Figure 1 shows that the amount of new office GFA beginning construction in Toronto peaked in 2019 at 1.77 million square feet. Then, the pandemic hit, and in 2020, that number collapsed to starts on just 5,156 square feet — a virtual standstill. While 2023 saw a brief resurgence with 1.08 million square feet of new office space breaking ground, 2024 numbers have fallen back down to 44,412 square feet. 

Figure 1. Gross floor area of new office space (in square feet) that began construction in the city of Toronto, 2019-2024. Source: UTPro.

Plotting office space under construction on a map reveals that new office construction is still heavily concentrated in the downtown core.  

Map 1. Map of all new office space that began construction in the City of Toronto, 2019 to 2024. Each pin represents one project with an office component. Purple pins were proposed in 2019, black pins are proposals from 2020-2024. Source: UTPro.

Proposed Office Developments Have Also Collapsed

The situation is just as grim for proposed office developments (Figure 2). In 2019, developers put forward plans for nearly 5.9 million square feet of new office space. Surprisingly, 2020 saw an even higher number at 7.2 million square feet, but owing to the time that planning for substantial projects takes, this still reflects the pre-pandemic commercial real estate mindset. As companies adapted to hybrid work as the pandemic progressed, however, demand for new office towers disappeared. 

Figure 2. Office GFA as a proportion of total GFA, both proposed (pink) and under construction (blue), in the City of Toronto, 2019-2024. Source: UTPro.

By 2023, the total amount of proposed office space had dwindled to just 523,223 square feet—a staggering 92% drop from the 2020 peak. While 2024 saw a slight rebound to 2.23 million square feet, this is still nowhere near pre-pandemic levels. 

We can look beyond the absolute numbers to get a relative sense of interest in building new office space. As shown in Figure 3, office space as a percentage of total new construction has collapsed. In 2019, office development made up 42.7% of all GFA that began construction. In 2024? A mere 0.4%. 

Figure 3. Gross floor area of new office space (in square feet) that proposed in new development applications to the city of Toronto, 2019-2024. Source: UTPro.

Likewise, office proposals as a percentage of total new development applications have also shrunk. In 2019, office space accounted for 8.3% of proposed new GFA. Today, that number hovers between 1% and 3%, meaning office buildings are now a marginal component of Toronto’s development pipeline. 

What’s Next for Toronto’s Office Market?

The decline in office development raises big questions about the future of Toronto’s commercial real estate. With vacancy rates still elevated and many companies downsizing their office footprints, demand for large-scale office projects is unlikely to recover anytime soon. 

However, mapping the distribution of new offices being proposed reveals an interesting trend. While new office construction is focused in the downtown area, new office proposals are happening across the city. This perhaps indicates that future interest in offices are going to be closer to where people live, reflecting a more distributed city in terms of office work. 

Map 2. Map of all new office space proposed in the City of Toronto, 2019 to 2024. Each pin represents one project with an office component. Purple pins were proposed in 2019, black pins are proposals from 2020-2024. Source: UTPro.

For now, however, one thing is clear: the recent golden age of office tower construction in Toronto is over for now. Whether this is a temporary slump or a long-term transformation remains to be seen.

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If you’re interested in the data used to generate this report, you can get more details on the official UTPro page. Explore the full capabilities of UTPro to see how its powerful insights can support your vision for the future of the Greater Golden Horseshoe. ***********@**********to.ca‘);”>Contact us with your queries or to schedule a demo.

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