As the Toronto Raptors are performing in the NBA Finals, making it the first appearance in the event by a non-U.S. team, it’s a good time to share how well the city’s office market is performing as well.

Vacancy rates in Toronto were an extremely low 3.8 percent during the first quarter, down from four percent in the same year-ago period, according to a Colliers International report. Over the same time, rents hit $19.07 per square foot, up from $18.89.

Due to this strong fundamental performance, builders are developing like crazy. There are 20.9 million square feet of buildings either starting from the ground up, pre-leasing or under renovation, compared to 6.2 million square feet during last year’s first quarter. Additionally, 22 million square feet is in the planning stages.

Colliers, in part, says that the major tenant demand is due to a strong STEM environment in the metro area, especially in the artificial intelligence field. To continue its growth the University of Toronto is building a $100-million, 750,000-square-foot Schwartz Reisman Innovation Centre, announced in March, which will promote growth in that industry.

Downtown is especially strong, with an incredible 1.1 percent vacancy rate and 9.4 million square feet under construction, due to large tenants’ continued demand for space.  A new project announced during the period is at the Hines-developed Queens Quay East, which is getting the Bayside I and II office buildings, at 215,000 square feet each. They will have ground-floor retail and timber is being used prominently in their construction.

Midtown is nearly as high-performing, with a 1.2 percent vacancy rate, and there was 172,545 square feet leased in the area, most of that in the Young-Bloor market. Six office transactions took place over the first quarter, totaling $131.8 million. Two floors were sold at 59 Hayden Street, and office-condo project, for about $20.5 million.

The biggest development in the metro as a whole is the 1.5-million-square-foot 81 Bay Street, part of CIBC square, being built by Hines and Ivanhoe Cambridge, which is a mixed-use transit-oriented project and is expected for delivery in next year’s second quarter. It’s followed by the nearly 1.3-million-square-foot 160 Front Street West, developed by Cadillac Fairview, on the western edge of the financial district, set for completion by the end of 2022.

So while there is a lot of court excitement in Scotiabank Arena right now, just as much is happening outside of its doors in the office world.

About GRS Group

GRS Group is a leading provider of commercial real estate (“CRE”) services worldwide. With offices across the United States, Europe, and affiliates around the globe, GRS Group provides local market knowledge with a global perspective for institutional real estate investors, occupiers and lenders worldwide. The GRS Group team has evaluated and advised on over $1 trillion in CRE transactions.

Through the company’s proprietary management process, Global Services Connection, GRS Group delivers an integrated suite of services including Financial Advisory, Transaction Management, Assessment and Title Insurance.  We provide a single point of contact, capable of leveraging the GRS Group portfolio of companies and delivering customized solutions to assist our clients in achieving their investment goals.