The GTA office market has lost steam, recording six consecutive quarters of negative absorption through mid-way 2014. “That’s a big string,” says Avison Young national research director Bill Argeropoulos, noting last time things got this bad was following the dot-com bust. The city weathered the most recent economic downturn unscathed, Bill points out, but now “we’ve kind of hit a wall.” Office vacancy across the GTA finished the first half of 2014 at 9.4%, up 80 bps year-over-year. (Downtown vacancy ended the first half of the year at 6%.)

Bill says the telling story will be next year, when new office projects—such as the 30-storey, 700k SF Bremner Tower, pictured centre—have come online, triggering a flight to quality from older buildings. “We’ll see how the empty space left behind is taken up.” With efficiency-focused firms putting more workers in a smaller footprint, Bill predicts demand levels of the past won't be there in the future. In fact, he thinks it might be four years until the city sees another major new building launched, given the residual vacancy “we know is going to come.”