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For decades, Toronto\u2019s 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\u00a0UTPro<\/a> data now paints a different picture: the development of new office space in Toronto has plummeted.<\/p>\n 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.<\/p>\n Construction of Office Space Has Fallen Off a Cliff<\/strong><\/p>\n 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 \u2014 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.\u00a0<\/p>\n Plotting office space under construction on a map reveals that new office construction is still heavily concentrated in the downtown core.\u00a0\u00a0<\/p>\n Proposed Office Developments Have Also Collapsed<\/strong> \u00a0<\/p>\n By 2023, the total amount of proposed office space had dwindled to just 523,223 square feet\u2014a 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.\u00a0<\/p>\n 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%.\u00a0<\/p>\n 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\u2019s development pipeline.\u00a0<\/p>\n What\u2019s Next for Toronto\u2019s Office Market?<\/strong> 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.\u00a0<\/p>\n 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.<\/p>\n * * *<\/p>\n If you’re interested in the data used to generate this report, you can get more details on the official UTPro<\/a>\u00a0page. Explore the full capabilities of UTPro to see how its powerful insights can support your vision for the future of the Greater Golden Horseshoe.\u00a0su***********<\/span>@**********<\/span>to.ca<\/span>‘);”>Contact us<\/span>\u00a0with your queries or to schedule a demo.<\/em><\/p>\n If you would like to stay updated on the latest development news on a daily basis, UrbanToronto also offers New Development Insider<\/a>, a daily subscription newsletter delivered to directly to your inbox.<\/em><\/p>\n<\/div>\n
\nThe 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.\u00a0<\/p>\n
\nThe decline in office development raises big questions about the future of Toronto\u2019s 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.\u00a0<\/p>\n