The Impact of the Work-from-Home Model on Office Development in Toronto
2 min read
Current market trends, specifically the rise of the work-from-home model, have shifted the focus of new commercial developments. With fewer people utilizing office space due to the transformation towards the work-from-home model, developers are proposing less office space in their development proposals.
As of June 30th, 2024, there are over 47 million square feet of office space under construction or in pre-construction, responsible for approximately 7% of the gross floor area of new developments. Additionally, the proportion of new development proposals that include office space has been steadily declining in recent years, with a decrease from 27% of all projects, including office space, in 2018, to 9% in the first half of 2024. In the first two quarters of 2024, approximately 90,500 square feet of new office space has been proposed by developers in Toronto, a significant drop from the millions of square feet proposed before 2023.
The decreasing demand for office space in Toronto has prompted developers to repurpose underutilized office space into mixed-use developments. The strategic shift, which is gaining momentum across the city, broadens the utility of the property by integrating residential, commercial and recreational elements in a single space.
As market trends continue to evolve, new development proposals will mirror these changes. The persistent growth of the work-from-home trend has had a profound impact on office space development in Toronto and will undoubtedly shape future projects.
References
Nickita, M. (2024, July 3). The office market transformation and how it will impact cities. CNU Public Square. https://www.cnu.org/publicsquare/2024/06/27/office-market-transformation-and-how-it-will-impact-cities
UrbanToronto. (2024, August 2). Out Of Office Space: How Developers are Responding to Changes in Work Habits. News. https://urbantoronto.ca/news/2024/08/out-office-space-how-developers-are-responding-changes-work-habits.56601
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