Opinion: Canada’s office vacancy crisis is also an incredible real estate opportunity

Canada’s downtowns are being hollowed out by office vacancies. The situation is particularly acute in the biggest downtown of all, Toronto. The vacancy rate was 18 per cent in the first quarter of this year, according to real estate consultant CBRE. And in nine out of 47 large office buildings examined in a recent Globe and Mail analysis, more than a quarter of the space was either empty or for lease. Five other buildings are at least 20 per cent vacant.

For landlords, it’s a crisis. For everyone else – including landlords – it’s also an opportunity.

Real estate is always a two-sided coin. Every story of someone forced to sell low is the story of someone who got to buy low. It’s the cycle of life, death and renewal in the economic jungle.

Q&A: Ask us your questions about downtown Toronto’s rising office vacancies

For landlords facing fallow square footage and falling rents, there’s a financial imperative to figure out how to transform underused space into something more valuable. And for a crop of businesses and institutions that never used to be able to afford a downtown address, there may be the opportunity to move from the suburbs – where your millennial and Gen Z employees do not want to be – to the centre of the action.

Today’s glut of empty office space is not like the early 1990s, when vacancies rose and construction stopped because the country was in a recession. What’s happened since 2020 is different. A slow trend of companies gradually using fewer square feet per worker was supercharged by the pandemic,