Despite lockdowns fading into the past, more and more Toronto companies continue to opt for hybrid work models, meaning lots of formerly-occupied office spaces remain largely vacant throughout the work week. 

While completely remote work models are rare nowadays, a new report by the commercial real estate firm CBRE reveals that office vacancy rates have climbed to the highest level in nearly 30 years in the last quarter. 

According to the report, Canada's office vacancy rate rose to 18.1 per cent in the second quarter, the highest level seen since 1994. This is a slight increase from last quarter, when the national office vacancy rate was 17.7 per cent. 

In comparison, the first quarter of 1994 saw an office vacancy rate of 18.6 per cent. 

There is now nearly 17 million square feet of vacant office space available for sublease nationwide, which is an all-time high, and nearly 2.5 million square feet more vacant space than was on the market this time last year. 

The firm says that Canadian office markets are grappling with a perfect storm of a recession threat, interest rate hikes, tech sector weakness, tenants rightsizing, and a new supply of office space, all compounded by the uncertainty around remote work. 

In Toronto, the report reveals that office space being returned to the market has slowed in the downtown core, with vacancy rising this quarter up to 15.8 per cent.

There's currently a record high of nearly 4.5 million square feet listed for sublet in downtown Toronto, and according to the report, tenants across the board are considering rightsizing and returning space to the market through sublet opportunities. 

The firm found that despite recent increases, sublet space has accounted for approximately 25 per cent of all vacant space across Toronto for the last four quarters.