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Time to pound the pavement! Quarterly investment in commercial construction permits just broke $2 million

• They just can’t build them fast enough. Quarterly investment in commercial building permits has just broken the CA$2 million mark for the first time in the city’s history!

• It’s no coincidence that this benchmark coincides with Toronto’s rise to the forefront as one of the hottest global commercial real estate markets in the last few years. Downtown office vacancy currently sits at 4.4 percent overall, with a 4.1 percent vacancy rate in downtown Class A assets.

• The question remains whether new developments can arrive quickly enough to alleviate pent-up demand or miss the boat. Notable office projects already under construction, such as Ivanhoé Cambridge’s 81 Bay St., are only set for arrival in 2020. Any new projects will, of course, only be delivered afterwards.

• Demand has shown no signs of slowing yet, with 370,000 s.f. of net absorption in Q1 2018 directly coming off of 2.6 million s.f. absorbed in 2017. However, the momentum of demand in the city will be a critical indicator to watch as the city approaches the next cycle of new construction deliveries in 2020/2021.

Source: JLL Research, Statistics Canada

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