FIGURES|TORONTODOWNTOWNOFFICE|Q42025CBRE

Fourthquartermaintainsandexpandsonthe

highlevelofactivityfromthethirdquarter

r1.2M

1.8M

$34.29

Avg.NetAskingLeaseRate($PSF)

15.0%

SFNetAbsorption

SFUnderConstruction

VacancyRate

Note:Arrowsindicatechangefrompreviousquarter.

ReportcoversDowntownonly,excludingMidtown.

ExecutiveSummary

-Overallvacancydecreasedby160basispoints(bps)to15.0%asdowntown’s1.2millionsq.ft.ofquarterlyabsorption,wastheall-timelargestforaquarterwithoutnewsupply.

Underscoring2025’s2.6millionsq.ft.ofannualabsorption,thelargestoverallannual

absorptionfiguresince2016.Despitehighactivity,tenantdemandforbest-in-classproductpersists,signalingacontinuationofactivityintonextyear.Overthecourseof2025ClassAandAAAvacancyfellbyover450bpsto14.0%and3.0%,respectively.

-Largeblockavailabilityisdecreasingrapidly,withonly15contiguousblocksofover100,000sq.ft.remaining.Duetothatdecrease,thereisheightenedcompetitionaroundthesespacesfrommanymajortenantsinthemarket.

-CIBCSquareIIisthelastsignificantprojectintheactivedevelopmentpipelineandisduefordeliveryinQ12026.Withthesupplyofnewbuildspaceexpectedtodryupoverthenextfewyearsandhightenantdemand,themarketisprimedfortheannouncementofanewofficetowertocommenceconstruction.

-Furtherleasingactivityisonthehorizon.Vacancyhasreachedthe15.0%thresholdmuchfasterthanexpected,improvingtheoutlookforvacancytoreturntoearlypandemiclevels.

FIGURE1:DowntownTorontoOfficeSupplyandDemand

NetAbsorptionandNewSupply(MSF)VacancyRate(%)

2.5

2.0

1.5

1.0

0.5

0.0

-0.5

-1.0

-1.5

-2.0

Q1

Q2Q3

2022

Q4

Q1

Q2Q3

2023

Q4

Q1

Q2Q3

2024

Q4

Q1

Q2Q3

2025

Q4

25.0%

20.0%

15.0%

10.0%

5.0%

0.0%

-5.0%

-10.0%

-15.0%

-20.0%

NetAbsorptionNewSupplyVacancyRate

Source:CBREResearch,Q42025.

1CBRERESEARCH?2026CBRELimited

FIGURES|TORONTODOWNTOWNOFFICE|Q42025

2CBRERESEARCH?2026CBRELimited

Activityremainshigh,completingabanneryear

TheDowntownTorontoofficemarketexperiencedasecondaddinganexclamationpointtothebestyearfortheofficemarketpost-pandemic.Annually,overallvacancydecreasedby360bpsthelargestsince2005andtheannual2.6millionsq.ft.ofabsorptionwasthelargestsince2016.ThehighactivityinQ3continued,withmanymajortenantsinthemarketclosinglargeblock

dealsover50,000sq.ft.suchasCIBC’s165,000sq.ft.newdealatCIBCSquareandScotiabank’s150,000sq.ft.renewalat40KingStreetW.

Thesemajortransactionstooklongstandinglargeblocksoffthemarket,whichisbeginningtofundamentallychangethelandscapeforofficeproduct.In2025thenumberofbuildingswithover100,000sq.ft.inavailabilityshrunkfrom49(9.9millionsq.ft)to32(5.6millionsq.ft.).

Withthenumberoflargeavailabilitiesdecreasingrapidly,theofficemarketissetforaneraofhighcompetitionasmajortenantsvieforthetighteningsupply.Theavailabilityoflargeblocksisfurtherconstrainedbythelackofnewdevelopments.ConsideringCIBCSquareIIisfullypre-leased,nosupplyincreaseswilloffsetthesustained3.5millionsq.ft.ofdemandfromtenantsinthemarket.Activityfromthemajorbankshascontinuedwithover2.7millionsq.ft.inleasing

activityin2025andover800,000sq.ft.inQ4.Astheynearfulfillingspacerequirements,otherlargetenantsarenowdefiningthetenantlandscape,suchasAmazon,NationalBank,andStripePayments.Largedemandspreadingbeyondthelargestfinancialinstitutionssupportsthe

continuationofpositiveleasingactivitythroughoutthemarket.

TrendsintensifyincoremarketsandClassAAAspace

Coremarketsaccountedfor84.2%ofoveralldowntownabsorptionin2025.FinancialCore

vacancydecreasedby560bpsto9.0%,thelowestvacancyrateinthesubmarketsinceQ32021,definingitastheleadingmarketinDowntownTorontobecauseofisdesirablelocation.The

othermaindriverfortenantsispremiumqualityspaces,withDowntownoverallClassAspacedecreasing490bpssincethestartoftheyearto10.7%.Particularly,newbuildspacesare

seeingincreasedactivity,withmajornewbuildsinthelastfiveyearsbeingroughly90%leased.TheClassAAAmarketshowcasestheintersectionaleffectswhenthesetwomainattributes

coincide,distinguishingitselfasitsowntierofofficeproductandnotasubclasswithinA.In

2025aloneClassAAAvacancydecreasedby470bpsto3.0%vacancy,withover1.0millionsq.ft.innewleasingactivityinjust17.3millionsq.ft.ofinventory.ThisspacewillcontinuetoseethehighestlevelsofcompetitionandactivitywithbothmajortenantsandlandlordsdesiringtobewithinthisupperechelonofToronto’sdowntownmarket.

FIGURE2:DowntownTorontoNewLeasing,BuiltOutvsBaseBuild(MSF)

2.5

2.0

1.5

1.0

0.0

0.5

Q1Q2Q3Q4

Q1Q2Q3Q4

Q1Q2Q3Q4

Q1Q2Q3Q4

Q1Q2Q3Q4

Q1Q2Q3Q4

2020

2021

2022

2023

2024

2025

BuiltOutBaseBuild

ExcludesMidtown.

Source:CBREResearch,Q42025.

FIGURE3:DowntownTorontoTenantsintheMarket(MSF)

4.5

4.0

3.5

3.0

2.5

2.0

1.5

1.0

0.5

Q1Q2Q3Q4

2025

0.0

FinancialServices

Technology

Insurance

LifeSciences

BusinessServices

Legal

Creative

Industries

Other

FIGURE4:DowntownTorontoTenantsintheMarket

byIndustry

2.8%

4.8%

4.8%4.9%

4.9%

5.9%47.3%

24.7%

Source:CBREResearch,Q42025.Source:CBREResearch,Q42025.

FIGURES|TORONTODOWNTOWNOFFICE|Q42025

3CBRERESEARCH?2026CBRELimited

Lackofconstructionpipelineandnewavailabilitiesincreasesoptimism

aroundnewdevelopmentsbreakingground

Only53,000sq.ft.ofnewproductwasdeliveredtoToronto’sDowntownofficemarketin2025.CIBCSquareII’sdeliveryhasbeendelayedtoQ12026whichwillbring1.4millionsq.ft.ofnewinventorytothemarketbutwithnoavailablespace.Intotal2026issettodeliverover1.8

millionsq.ft.ofnewofficespace.Withpremiumspacedisappearingandabarrenconstructionpipelinepost2026,thedemandforanotherpremiumofficetowerisapparent.Thelargest

opportunitybeingOxfordProperties’theHUBdevelopmentat30Baywhichbeganpre-leasinginQ4.Thecompetitivelandscapeandnumberofmajortenantsinamarkethavereinvigoratedthelikelihoodofthisnewdevelopmentfindingananchortenanttopromptconstruction

commencement.Especiallyconsideringthatafter2026,downtownTorontowillhititslongestperiodofofficeconstructionstagnationsincetheearly1990’swithnonewsupplydeliveriesonthehorizonbesides212,000sq.ft.at481UniversityAvenuein2027.

Sustainedmarketactionpromotesevenstrongervacancyforecast

Theofficemarket’soverallbanneryearandextremelyactivelasttwoquartersarepositivesignsforthefutureofofficeleasing.ThisleasingvelocitywillcontinueintothenearfutureastenantdemandremainshighandactivityaroundmajorblocksinPortlandCommons,200FrontStreetWand351KingStreetEarenearingfinalizedagreements.Themarketissettobreakthe13.0%thresholdwithinthenexttwoyears,amarkthathasn’tbeenreachedsinceQ32022.

Absorptionfiguresaresettooutperformpre-pandemicaverages,particularlyinQ12026whichisexpectedtohaveover1.5millionsq.ftofpositiveabsorptionlargelyduetothedeliveryof

CIBCSquareII.Despitelowlevelsofnewsupply,highleasingvolumealonewillcontinuethistrendoverthenexttwoyears.

Withthemarketfinallyinrecoverythekeyquestionisnolonger,“whenwillvacancybeginto

decrease”,butrather“whenwillthisdecreaseend”.Theimminentoutlookisextremelypositiveasvacancyiscurrentlytrendingdownwardataratenotseeninover20years,butthatwillnotcontinuetothepointwheretheofficemarketreturnstotheunsustainablepre-pandemiclevels.Withinthenextfiveyears,afterthiswaveofleasingdiminishes,theofficemarketwillstabilizeoncemoreintoanewnormalfortheofficemarket.

FIGURE5:DowntownTorontoNewSupplyDeliveries(MSF)

3.5

FORECAST

3.0

2.5

2.0

1.5

1.0

0.5

0.0

20192020202120222023202420252026F2027F2028F2029F2030F

NewSupplyForecast

ExcludesMidtown

Source:CBREResearch,Q42025.

FIGURE6:DowntownTorontoSupply&DemandForecast

NetAbsorptionandNewSupply(MSF)VacancyRate(%)

2.0

1.5

1.0

0.5

0.0

-0.5

-1.0

FORECAST

-1.8MSF-1.4MSF-1.3MSF

Q1Q2Q3Q4

Q1Q2Q3Q4

Q1Q2Q3Q4

Q1Q2Q3Q4

Q1Q2Q3Q4

Q1Q2Q3Q4

Q1Q2Q3Q4

Q1Q2Q3Q4

2020

2021

2022

2023

2024

2025

2026F

2027F

20%

15%

10%

5%

0%

-5%

-10%

mmNetAbsorptionNewSupplyVacancy

ExcludesMidtown.Pre-leasingisaccountedforwherecurrentlyinplace.

Source:CBREEconometricAdvisors,CBREResearch,Q42025.

FIGURES|TORONTODOWNTOWNOFFICE|Q42025

4CBRERESEARCH?2026CBRELimited

FIGURE7a:OfficeMarketStatistics(Central)

Submarket

Inventory

(SF)

Vacancy

Rate

(%)

SubletSpace

(%of

vacancy)

Net

Absorption

(SF)

YTDNet

Absorption

(SF)

NewSupply

(SF)

Under

Construction

(SF)

NetAsking

Rent

(PSF)

FinancialCore

27,426,732

9.0%

14.4%

272,647

1,377,538

0

0

$38.07

GreaterCore

21,465,661

17.0%

11.1%

562,510

576,775

0

1,430,000

$32.10

DowntownSouth

10,200,415

9.2%

22.1%

124,897

261,655

0

0

$35.69

DowntownNorth

6,483,449

13.0%

14.1%

7,595

44,369

0

211,589

$28.14

DowntownEast

9,606,227

27.1%

9.4%

264,489

396,128

0

103,334

$35.29

DowntownWest

2,610,704

23.6%

25.7%

17,923

-8,819

0

0

$26.97

LibertyVillage

3,754,761

29.6%

30.6%

-46,081

-15,132

0

80,966

$34.75

Downtown

81,547,949

15.0%

15.0%

1,203,980

2,632,514

0

1,825,889

$34.29

Bloor/Yonge

6,953,384

25.9%

32.8%

-159,604

-101,132

0

24,388

$26.98

St.Clair/Yonge

2,194,054

13.3%

3.7%

-21,075

8,435

0

0

$28.62

Eglinton/Yonge

4,520,506

17.1%

7.0%

-12,357

111,601

0

0

$18.79

Midtown

13,667,944

21.0%

22.8%

-193,036

18,904

0

24,388

$25.12

Central

95,215,893

15.9%

16.5%

1,010,944

2,651,418

0

1,850,277

$32.44

Source:CBREResearch,Q42025.

FIGURE8:NotableDowntownLeaseTransactions

Submarket

Address

Tenant

Size(SF)

Class

DealType

GreaterCore

141BaySt

CIBC

165,000

AAA

NewLease

FinancialCore

40KingStW

Scotiabank

150,000

AAA

Renewal

GreaterCore

483BaySt

HydroOne

150,000

A

Renewal

DowntownWest

460FrontStW

Wealthsimple

125,000

A

NewLease

BloorYonge

120BloorStE

YorkvilleEducation

88,302

B

NewLease

GreaterCore

1AdelaideStE

Softchoice

63,000

A

NewLease

FinancialCore

77KingStW

RGAReinsurance

43,000

AAA

NewLease

Source:CBREResearch,Q42025.

FIGURE7b:OfficeMarketStatistics(Suburban&Total)

Submarket

Inventory

(SF)

Vacancy

Rate

(%)

SubletSpace

(%of

vacancy)

Net

Absorption

(SF)

YTDNet

Absorption

(SF)

NewSupply

(SF)

Under

Construction

(SF)

NetAsking

Rent

(PSF)

Bloor/Islington

1,750,771

14.5%

9.6%

2,448

-35,206

0

0

$18.81

427Corridor

1,856,618

24.8%

12.7%

9,634

-2,295

0

0

$16.79

AirportStrip

3,330,753

20.1%

11.8%

-10,373

-40,295

0

0

$12.47

AirportCorp.Centre

7,304,012

21.4%

23.4%

-53,399

50,461

0

0

$19.15

MississaugaSouth

1,450,312

5.5%

34.4%

-14,511

-6,146

0

0

$16.87

CityCentre

3,752,801

23.1%

2.4%

-7,522

-44,780

0

0

$18.28

Hwy10/Hwy401

4,303,077

12.4%

12.6%

60,993

41,060

0

0

$19.67

Meadowvale

4,474,354

22.8%

8.4%

-218,204

-235,482

0

0

$19.75

Brampton

1,049,000

4.9%

65.7%

-13,991

-48,988

0

0

$17.96

Oakville

4,644,086

15.0%

17.9%

30,001

125,155

0

27,662

$18.43

Burlington

3,790,349

17.9%

13.9%

64,353

58,708

0

0

$16.29

West

37,706,133

18.2%

14.3%

-150,571

-137,808

0

27,662

$17.84

Scarborough

3,544,513

27.3%

21.1%

90,686

98,039

0

0

$15.40

MarkhamN./R.Hill

8,068,046

19.8%

1.3%

53,129

62,460

0

0

$19.27

MarkhamSouth

4,081,381

17.8%

2.8%

-36,491

-58,801

0

0

$16.64

E.York/D.MillsS.

2,552,330

31.9%

2.8%

38,955

43,144

0

0

$16.04

DonMillsNorth

2,792,656

23.7%

3.5%

-23,447

-94,708

0

0

$17.31

ConsumersRoad

3,632,790

31.5%

13.0%

-25,053

-66,613

0

0

$15.79

G.Baker/Vic.Park

1,510,904

24.6%

2.2%

63,974

66,660

0

0

$17.92

East

26,182,620

24.0%

7.1%

161,753

50,181

0

0

$17.22

NorthYonge

7,760,524

28.7%

10.9%

129,772

77,327

0

175,000

$22.12

NorthYorkWest

2,166,759

10.3%

0.4%

9,148

-41,505

0

0

$12.86

Vaughan

3,195,743

11.2%

17.9%

38,242

50,334

0

0

$19.88

North

13,123,026

21.4%

11.0%

177,162

86,156

0

175,000

$21.32

Suburban

77,011,779

20.7%

10.9%

188,344

-1,471

0

202,662

$18.18

GTATOTAL

172,227,672

18.0%

13.6%

1,199,288

2,649,947

0

2,052,939

$26.72

Source:CBREResearch,Q42025.StatisticsasofDecember12th,2025.

FIGURES|TORONTODOWNTOWNOFFICE|Q42025

MarketAreaOverview

Definitions

Inventory:Acompletelistofofficeassets,displayedbytotalsq.ft.,trackedbyCBREintheGreaterTorontoArea.

Submarket:AsubdivisionoftheGreaterTorontoAreasubmarketwithdefinedboundariesrepresentingvariousnodes

andregions.NetAbsorption:Ameasureofthenetchangeinoccupiedspaceoveragivenperiodoftimeexpressedin

sq.ft.NetRentalRate:The