‘Flight to quality’ improves outlook for office market

by Michael Lewis

As Canada’s office real estate market shows signs of recovery, major tenants such as Canadian Tire Corp. are retrofitting existing space. As part of a $200-million project, the retailer and Oxford Properties will modernize the existing Canada Square towers at Yonge Street and Eglinton Avenue in Toronto.

Canada’s office real-estate market is showing signs of recovery as return-to-office mandates, falling interest rates and record-low construction drive demand.

Third-quarter 2025 data from real-estate firms such as CBRE, Colliers and Avison Young show downtown vacancy rates decreasing in most major markets for the first time since the pandemic. National net absorption is positive – meaning more space is being leased than vacated – and asking rents are holding steady.

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