Big-name tech tenants snapping up high-end downtown space, signalling quiet but sharp comeback for Canada’s core office markets: report
A quiet but decisive shift is underway in Canada’s downtown office cores, as high‑profile tech firms move back into physical space and return‑to‑office mandates spread across major employers.
According to a new commercial real estate report from Royal LePage Commercial, demand for high‑quality office space in prime downtown locations increased noticeably in 2025, with companies such as Wealthsimple, Lyft and Nvidia securing significant square footage last year.
This activity is expected to accelerate in 2026 as more organizations standardize in‑office requirements for staff.
Royal LePage links this emerging rebound directly to widespread return‑to‑office (RTO) policies introduced by banks, telecoms, tech companies and the federal government. While vacancy remains elevated in older and lower‑quality buildings, competition is sharpening for well‑located, amenity‑rich towers in the core, the report finds.
Return‑to‑office mandates reshape demand
A large number of new leases are for workers who were hired during the pandemic and never worked in an office, or for companies that worked remotely during the pandemic and are now renting bigger spaces, William Irons, senior vice president of commercial leasing and investments at Royal LePage Signature Realty, told the Toronto Star.
“Some companies that had a small presence in the City of Toronto have now opened very substantial, multi-floor offices upwards of 100,000 or 200,000 square (feet),” he said. “Large tech companies that were in old buildings (are) moving into The Well, and into Portland Commons, and into First Canadian Place, and into office towers. It’s traditionally not been where they’ve been.”
The report notes that major employers, including the Royal Bank of Canada, Rogers Communications and Starbucks Canada, have implemented three‑ to five‑day in‑office schedules, while federal public servants are set to return up to four days per week this summer.
These decisions are driving a “gradual recovery” in office leasing activity, particularly in top‑tier (AAA and Class A) properties.
Stronger demand for office space
In a survey of Royal LePage commercial professionals across the country, two‑thirds said they expect occupier demand for office space in their markets to modestly increase or hold steady in 2026, and more than four in 10 expect office vacancy rates to decline.
The firm says employers are not simply backfilling space as it existed pre‑pandemic, but reconfiguring offices around collaboration, flexibility and employee experience.
Matt Jacques, interim general manager of Royal LePage Commercial, characterizes 2026 as a transition year in which “growing stability” in the broader economy is supporting more deliberate, long‑term planning in both office and industrial markets.
With provincial employers such as Ontario and Alberta mandating five-day weeks at the office, Canadian HR Reporter talked to the experts to find out the biggest missteps made by HR and employers with this kind of move — and, more importantly, the best ways to ensure a more successful return.
Regional markets across Canada
The report stresses that national averages mask sharp differences between building types. In markets like the Greater Toronto Area, high‑quality downtown space near transit is seeing renewed interest, while older Class B and C buildings continue to struggle with higher vacancy and the need for significant reinvestment or repositioning.
In Greater Montreal, Class A assets are holding up better than secondary stock, with signs of capacity constraints emerging for larger, centrally located floorplates.
In downtown Vancouver, landlords are still offering incentives on larger blocks of space, but the report notes that current conditions give some tenants a chance to upgrade into better buildings while availability lasts.
Industrial still strong but facing headwinds
On the industrial side, Royal LePage continues to describe the sector as one of Canada’s strongest commercial asset classes, driven by e‑commerce, logistics and warehousing. However, rental growth has cooled from its pandemic peak, and global trade disruptions, including tariffs and supply chain instability, are now weighing on momentum.
Manufacturing sales surged more than 19 per cent between December 2020 and December 2021 and have since remained generally in the $65‑ to $75‑billion‑per‑month range. In 2025, total manufacturing sales slipped by 0.4 per cent, largely due to volatility in petroleum, coal and chemical industries affected by external shocks, the report notes.
Roughly half of manufacturers surveyed reported being affected by tariffs, mainly through higher input costs and pressure on margins. Even so, nearly half of Royal LePage’s commercial experts expect demand for industrial space to increase in their markets this year, supported by a slowdown in new construction and ongoing supply‑chain realignment.
