Office fundamentals have mixed performance; net effective rents remain in relatively stable range
After over half a year of tepid office-using employment growth, May experienced a sudden spike, more than double the average growth rate over the last six months. This was largely driven by the finance, insurance, and real estate sectors, according to Statistics Canada. However, overall office leasing activity in the Toronto market was 1.3 million square feet (msf), down from just under 1.5 msf reported last quarter, as well as down from just over 1.5 msf reported a year ago. Toronto still has several million square feet of office space under construction, while most other Canadian markets have seen their construction pipelines empty. CIBC Square Phase II at 141 Bay Street remains the single largest upcoming deliverable at over 1.4 msf, of which 66% has been pre-leased.