Six years later on, workplace markets across the nation (and beyond) are still feeling the effects of the COVID-19 pandemic, which altered the world forever by making remote work mainstream. However things are on the upswing.In Q1 2020, at the
beginning of the pandemic, the nationwide workplace job rate was just under 8% according to commercial realty services firm Colliers. Since then, it has actually been steadily increasing every quarter up until about midway through 2025, when it peaked at 14.9%.
We are now over the hump, and the national office vacancy rate is starting to decline as federal governments and institutions– and large companies– continue mandating staff members go back to office.According to AI-powered modelling and economic projections, Colliers states the nationwide office vacancy rate is forecasted to decline back down to 8%by Q1 2029– near to a decade after we first discovered of the pandemic.(Colliers)According to Colliers,
the average in-office mandate has actually also been steadily increasing. In Q4 2022, the average was 2.5 days with about 49 %of companies completing that plan. Those numbers jumped to 3.0 days and 55%by Q2 2023, 3.3 days and 62 %by Q4 2023, and was at 3.5 days and 68% following Q4 2025.” In the second half of 2025,
downtown Toronto saw high levels of leasing activity not seen in well over a years,”stated Senior Managing Director of Brokerage Jon Olynick in a Colliers report published last month. “Go back to workplace requireds by the Big Banks and the provincial federal government was a dominant aspect, which has also rollovered into Q1 2026.”Such leases from the past two quarters consist of CIBC leasing 258,197 sq. feet at 8 Spadina Ave (The Well)and Scotiabank leasing 63,461 sq. feet at 3389 Steeles Opportunity East(Steeles Technology Campus )in Q4 2025, and RBC leasing 326,347 sq. ft at 200 Front Street West (Simcoe Location )and Scotiabank leasing another 104,966 sq. feet at 351 King Street East(World and Mail Centre )in Q1 2026, the last of which was a sublease.Along with terms like “coronavirus “and” social distancing, “the pandemic likewise made”
flight to quality “a popular term in the industrial property world. As the name suggests, the office market significantly began to divide into 2: the top-tier buildings(Class AAA, A)and the rest(Class B and C), with the previous still performing well, and the rest being more of a blended bag.This is likewise expected to be the case with the recovery, with Colliers forecasting that the top-tier structures will go back to pre-pandemic job rates as rapidly as Q4 2027, mid-market buildings returning to those levels by Q4 2028, and low-tier buildings arriving in Q4 2029.”The speed of healing is not consistent throughout all asset classes,”stated Colliers.
“Our analysis, based upon predictive designs incorporating more than 200 leasing variables, shows that demand is currently tightening for the most competitive structures. This includes high quality buildings that are extremely available and geared up with tailored features. All asset classes will experience a gradual shift from a tenant’s market to a proprietor’s market, yet it will start and end at various points.”< img alt=""height=" 1264 "src="// www.w3.org/2000/svg'%20viewBox='0%200%201356%201264'%3E%3C/svg%3E “width =”1356″/ >
(Colliers)The” right-sizing “cycle also seems to be nearing (or at) an end. In Q2 2020, 46% of occupants indicated that they required less area. This number dropped to 37% a couple of months later, and after that held constant at around 25% for four years. However, in Colliers’ latest study, just 11% of renters suggested that they wanted to reduce the size of their space and 17% suggested that they wanted to increase the size of their space.Another indication is the typical unit size lease-up rate, which was around 4,000 sq. feet in 2020, remained between 3,300 and 3,500 sq. feet between 2022 and 2024, before rebounding back up to 3,900 sq. ft in 2025. Colliers states companies are proceeding from the “wait and see”approach and now have more confidence.All of this is to state that “the tide is moving,” as Colliers phrased it,
which the workplace market’s pandemic era is nearing an end.