Office demand surges, but Canada’s older buildings miss the rebound
A thinning construction pipeline tightens supply
Sublease space fell by 1.3 million square feet, the largest quarterly drop since 2005, and now sits 50.2% below its peak.
Only 1.4 million square feet is under construction, and just 23.2% of it is pre-leased, down from more than 60% a year earlier.
The report said “the thinning pipeline of new supply is expected to remain constrained with no significant deliveries on the horizon beyond 2027.”
“The earliest that Canada will see any significant new office completions is 2032, but that timeline shifts with each day that new construction isn’t kicked off,” Meehan said.
For commercial mortgage brokers, the data points to diverging financing conditions. Well-leased premium assets gain pricing power. Owners of older buildings face weaker leasing prospects and growing pressure to convert or redevelop.
