⚡This Is Happening Right Now: Toronto’s downtown Class A office vacancy rate has dropped to just 3%. The Big Five banks have mandated 4–5 days in office. The Ontario government ordered 60,000 civil servants back to their desks — and hasn’t signed a single new lease yet. If your business needs office space in the GTA in 2026, the window to act is open — but it is closing fast.
The Numbers Don’t Lie: Toronto’s Office Market Has Flipped
For years, tenants had the upper hand. Landlords were desperate, offering months of free rent just to fill buildings. That era is over. The GTA office market has just recorded its strongest leasing quarter since 2019 — and the data is striking:
| 3% Vacancy rate, downtown Toronto Class A office space | ~2M sq ft leased Q4 2025 — highest in 5 years | $56B forecast 2026 CRE investment in Canada (CBRE) |
Office availability across the GTA declined from 21.2% to 19.2% in just one year. Sublease space has fallen to 2017 levels. According to CBRE’s managing director Marc Meehan, what’s happening in Toronto right now can be summarized in three words:
“Toronto is on fire.”
Why Return-to-Office Mandates Created a Supply Crisis Overnight
The shift didn’t happen gradually — it happened all at once. Three major forces converged in the second half of 2025, and the ripple effects are still playing out across the GTA market.
The Big Banks Lit the Fuse
RBC, TD, Scotiabank, BMO, and CIBC all mandated employees back to the office for four days a week starting in fall 2025. Collectively, these institutions employ tens of thousands of Toronto office workers — and they need real space to accommodate them. Almost immediately, premium office floors in the Financial Core began disappearing from the market.
If your business needs office space in Toronto and is competing with Canada’s biggest banks for the same Class A floors, you need a broker who knows the market before it hits public listings.
60,000 Government Workers Just Re-Entered the Market
Ontario Premier Doug Ford ordered 60,000 provincial public servants back to the office full-time as of January 2026. In a stunning detail reported by CBC News on February 23, 2026 — just days ago — the government has not signed a single new lease or purchased any new space to accommodate them. That’s 60,000 workers competing for desk space in an already-compressed market.
| 📰 Breaking (Feb 23, 2026): CBC News confirmed the Ontario government has signed zero new office leases despite ordering 60,000 civil servants back full-time. The resulting office crunch is expected to push more government ministries into the private commercial leasing market imminently. |
What This Means If You Are Searching for Office Space Right Now
The rules of the GTA leasing market have changed. Here is what business owners and executives need to understand in 2026:
- Start your search 9–12 months earlier than you think. In a compressed market, the best spaces — especially Class A and transit-connected — are leased months before the previous tenant vacates.
- The trophy space is almost gone. Class A vacancy downtown sits at 3%. If you want a premium floor in the Financial Core or near Union Station, your options are severely limited and shrinking weekly.
- Landlords are negotiating less. Free rent periods and TIA allowances are still available — but only on properties in higher-vacancy submarkets. In-demand buildings are no longer offering the inducements they were in 2023–2024.
- Off-market access is now critical. A significant portion of the best GTA office space is never publicly listed. It moves through broker networks before it ever appears on MLS, LoopNet, or CoStar.
- Suburban and satellite markets are heating up. Businesses priced out of downtown are looking at North York, Scarborough, and Midtown. Some are expanding into Mississauga, Vaughan, and Barrie — where rates are 15–25% lower and quality options still exist.
The ‘Cascade Effect’ — What Happens When Trophy Space Runs Out
Here’s what industry insiders are watching closely: as Class A trophy space disappears, tenants are being pushed ‘down market’ into Class B and even Class C office buildings. Colliers and Avison Young both forecast this cascade accelerating through 2026.
| Class | Vacancy Rate (downtown) | Trend |
| Trophy / AAA | ~3% | Essentially sold out. Demand far exceeds supply. |
| Class A | ~13% | Declining fast. Premium amenity spaces being snapped up. |
| Class B / C | ~25% | Still elevated but filling as A-class becomes unavailable. |
For businesses that need to move soon, the window to secure quality space at reasonable rates is open — but it is narrowing every week. Browse current commercial listings across the GTA to see what is still available.
People Also Ask: Toronto Office Space 2026
| Q: Is there a shortage of office space in Toronto in 2026? |
| Yes — specifically for high-quality Class A and trophy space. Downtown Toronto Class A vacancy is at approximately 3%, the lowest in years, driven by return-to-office mandates from Canada’s Big Five banks and Ontario’s provincial government. Class B and C offices still have availability but are filling quickly due to the ‘cascade effect’ as premium space disappears. |
| Q: How much does office space cost to lease in Toronto in 2026? |
| Downtown Toronto Class A office space runs approximately $35–$55 per sq ft gross (base rent plus TMI). Trophy space in the Financial Core commands a premium above that range. Suburban offices in North York or Scarborough average $22–$32 PSF. Alternatives in Mississauga, Vaughan, and Barrie offer comparable quality at 15–25% lower rates. |
| Q: How do return-to-office mandates affect commercial real estate in Toronto? |
| RTO mandates have dramatically increased demand for office space in downtown Toronto. The Big Five banks alone brought tens of thousands of workers back to 4–5 days in office in late 2025, while the Ontario government ordered 60,000 civil servants back full-time in January 2026. This sudden compression of demand has pushed Class A vacancy to near-record lows and is expected to cascade into Class B properties throughout 2026. |
| Q: When should I start looking for office space in Toronto? |
| In the current market, businesses should begin their office search 9–12 months before their target move-in date. Given the low vacancy rates for quality space and the fact that many premium properties are leased off-market before ever appearing publicly, early engagement with a dedicated tenant broker like Allen Mayer is essential to securing the right space. |
How Allen Mayer Finds Office Space When None Seems Available
In a market this tight, most businesses will search LoopNet or MLS, find nothing suitable, and give up — or worse, sign a bad lease under pressure. Allen Mayer’s 25+ years of GTA commercial real estate brokerage provides something no listing portal can: access to space before it goes public.
- Off-market network: Relationships with building managers, landlords, and fellow brokers across the GTA provide access to spaces that never appear on any public platform.
- Tenant-only representation: Allen represents your interests exclusively — not the landlord’s. This distinction means every negotiation is designed to protect you, not the building owner.
- GTA-wide coverage: From the Financial Core to North Toronto commercial real estate, and outward to Mississauga, Vaughan, and Barrie — every viable option is on the table.
- Zero cost to tenants: In the vast majority of GTA commercial leases, broker commissions are paid by the landlord. Expert representation costs most tenants absolutely nothing.
Learn more about Allen Mayer and his track record, then browse the latest commercial listings currently available across the GTA.
Don’t Wait — The Window Is Closing
The last time Toronto’s office market was this competitive, businesses that delayed their search by even 90 days found themselves with no viable options in their target area. 2026 is shaping up to repeat that dynamic — only faster.
Whether you are a growing firm that needs more room, a business planning a relocation, or an investor exploring GTA commercial real estate opportunities, the time to move is now — not after the next quarter’s report comes out.
| Toronto office space is disappearing fast — act now. Allen Mayer has 25+ years of GTA office leasing expertise and off-market access your competitors don’t have. 📞 Book Your Free Consultation → (416) 918-7979 RE/MAX Ultimate Realty · Member: RECO | TRREB | CREA · 1739 Bayview Ave, Toronto |
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