In downtown Toronto, the office is back

Lyft Inc., LYFT-Q the San Francisco-based rideshare rival to Uber, has done brisk business over the past year moving Canadians from place to place. Later this month, hundreds of its own employees in Toronto are set to move into sprawling new digs in the city’s tallest office tower, First Canadian Place.

There was a time when the comings and goings of white-collar cubicle dwellers mattered little to anyone outside of the commercial real estate profession. But Lyft’s office relocation is part of a much bigger transformation that’s redefining the downtown economy and work culture of Canada’s largest city.

As recently as 15 months ago, many of Toronto’s tallest towers suffered from a glut of empty space, a holdover from the pandemic and the rush by companies to adopt remote work policies that left tumbleweeds blowing down Bay Street. The world of work had permanently changed, experts predicted, in obituaries heralding the demise of the office.

Now downtown Toronto’s towers are rapidly filling up, some to the brim. Restaurants in the financial district buzz with activity, and the underground network of tunnels connecting buildings bustles with commuters once again.

Return-to-office mandates from Canada’s largest financial institutions have contributed to much of the abrupt reversal, combined with a surprising burst of investment by companies in several sectors, including tech.

On Sept. 14, Lyft is set to take over 90,000 square feet in First Canadian Place for its newest tech hub. The company opened its first Toronto office in 2024 in a smaller nearby building that housed roughly 50 employees. Lyft, which saw the number of rides in Canada grow by 50 per cent year-over-year in the first quarter, is now on track to soon expand its workforce in the city to more than 500, according to Jerry Golden, the company’s U.S.-based chief policy officer. (Lyft also provides the technology behind Toronto’s bike share program.)

“People want to be downtown and rideshare is most prominent in the densest population areas, so there’s a positive nexus for us with the fact downtown Toronto is being revitalized,” said Mr. Golden. “We’re investing as part of that story.”

Numbers show the extent of the turnaround.

In early 2024, an analysis by CoStar Group of 47 large, downtown Toronto towers for The Globe and Mail found a city core awash in vacant offices.

The availability rate at the time stood at 13.7 per cent, according to CoStar, a Washington-based commercial real estate information provider. The rate kept climbing to a peak of 14.2 per cent in the first quarter of 2025.

As of last month, the availability rate for the same sample of buildings had been halved, while the vacancy rate fell to 5.6 per cent from 11.9 per cent.

(Availability rate includes space that is vacant, up for sublet or set to come to market within 30 days, as opposed to the vacancy rate, which only includes vacant space.)

Overall, the availability rate across the financial district has dropped to 10.1 per cent from 17.9 per cent at its peak in 2024.

Just a few years ago, “if you drove all the way in from some GTA suburb you were probably sitting at your desk alone, there was no one around and the restaurants closed at 3 p.m.,” said Ben Haythornthwaite, CoStar’s director of market analytics. “The food courts are vibrant again. You can meet somebody for a coffee.”

The result is a shift from downtown Toronto being a tenants’ market to being a landlords’ market, which will likely bolster office valuations.

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Until relatively recently, many landlords offered incentives, such as several months of free rent or complementary renovations, as a way to fill their spaces without lowering rental rates. Doing so allowed them to avoid writing down the value of their buildings. Landlords no longer have to offer discounts.

“There was an element of smoke and mirrors to the inducements, but it paid off,” Mr. Haythornthwaite said.

The office revival is far from universal, even within Toronto, let alone in cities across the country. While Calgary has recovered to pre-pandemic vacancy rates, that level was still historically elevated, while Montreal and Vancouver’s large office buildings have yet to see a sustained recovery.

For the broader Metro Toronto area, office availability rates have fallen from their peak, but remain high compared with before the pandemic.

There is a further north-south divide in Toronto. As people return to downtown, those premium, newer buildings closer to Union Station and near ramps to the Gardiner Expressway are filling up faster, said Mr. Haythornthwaite. Vacancy rates for buildings north of King Street are on average roughly one percentage point higher than buildings south of that east-west corridor, CoStar data shows.

“The idea of accessibility and how quickly people can get in and out of the office has become more important because it’s such a gridlock-ridden city,” he said.

Much of downtown Toronto’s revival stems from decisions by financial institutions to compel employees back to the office, effectively scrapping pandemic-era hybrid policies that prompted companies to put vast amounts of space on the market for sublet.

Royal Bank of Canada’s RY-T announcement in May, 2025, that staff must return to the office four days a week that fall was a watershed moment for the downtown core, said Stan Krawitz, a principal with commercial real estate company Avison Young.

The decision had a ripple effect across the financial services sector and beyond. Other big banks quickly followed suit, leading to bank workers jockeying for precious desk space. What followed was a frenzied push to secure larger offices. For some buildings, “rents have gone up significantly in the past 12 months,” said Mr. Krawitz.

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Getting back to full buildings was a drawn-out process.

Former Toronto mayor John Tory led the push to get more workers back to the city’s downtown core in the summer of 2022 by launching an economic advisory recovery panel tasked with, among other things, figuring out how to get more workers back to the office. RBC’s CEO, Dave McKay, aired his desire for staff to be back in the office more often, saying in a 2022 memo that technology couldn’t replicate the “energy, spontaneity, big ideas, true sense of belonging and fun” of being in the office together.

But the uptake was slow among downtown employers. Many embraced a hybrid workplace, allowing employees to work from home two to three times a week. Doing so allowed businesses to unload excess space and save money on rent. Data from the Canadian Chamber of Commerce and Environics Analytics showed that foot traffic in downtown Toronto was 46 per cent lower in September, 2022 (when most large white-collar workplaces began mandating return-to-office policies), compared to January, 2020.

In 2024, with many restaurant and retail businesses in the financial district still struggling with a lack of foot traffic, Toronto’s current Mayor Olivia Chow met with bank CEOs to discuss how to get more workers back into the office at least four days a week and jumpstart the downtown economy.

It was only in the fall of 2025 that all the big banks embraced a four-day-in-office policy – and it has left a mark.

For instance, The Well, a tower that opened west of the financial core in 2022 just as remote work became entrenched, was left with a gaping availability rate when e-commerce company Shopify Inc. SHOP-T cancelled plans to move in, despite being on the hook for a lease on several floors until 2037.

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Then in January of this year, Canadian Imperial Bank of Commerce CM-T took most of Shopify’s sublease at The Well. CIBC is also the main tenant at CIBC Square, a large office complex that opened during the pandemic.

Scotiabank snapped up nearly 160,000 square feet in a building called 1 Adelaide East in February of this year, according to CoStar data.

That building, owned by GWL Realty Advisors, had a crushing availability rate of 46 per cent in May, 2024. Now the rate is just 3.9 per cent, according to CoStar.

“We went from not a lot of companies occupying their space, to shrinking their footprints, to then rushing to secure the space they need to bring their people back, because a lot of companies grew during the pandemic, but didn’t grow their office footprints,” said Devan Sloan, GWL’s vice-president, asset management and leasing.

“There was a fair amount of catching up to do. So it was this sort of whiplash of getting people back to the office and wanting to secure proper space for them.”

As employers rush to fill that space, there have been growing pains.

The balance of power between employers and workers has shifted significantly over the past two to three years, with job vacancies down from their 2022 highs, the trade war sparking uncertainty, and stories of artificial intelligence-related layoffs dominating headlines – all the more reason to head into the office and let the boss see your face.

“Employers are gaining the upper hand,” said Mark Rose, chief executive of Avison Young, a sharp contrast to four or five years ago when it was an employee’s market.

“Individuals that stayed home were not seen, individuals who stayed home were not fully developed and individuals that stayed home started to miss out on things like promotions.”

And while landlords may be pleased with the office revival, many bank employees are less enthralled.

At Bank of Nova Scotia BNS-T, employees were first asked to return to the office four days a week starting last September. Prior to the fall of 2025, Scotiabank, like most of the other big banks, had mandated employees be in two to three times a week, depending on department and rank.

Four Scotiabank employees described the four-day-in-office mandate as challenging because of long commute times, and critically, the inability to do their jobs well because of a lack of desks. The Globe is not naming the bank employees in this story because they were not authorized to speak publicly about their employers.

Two employees said that even a year after the in-office mandate was established, staff have trouble booking desks on the in-house app because there are not enough desks available. More often than not, employees resort to working on a different floor or in an open lounge space, which they say defeats the purpose of coming into the office because they end up working in a different part of the building as the rest of their team.

At RBC, two employees said the bank’s in-office policy was strictly enforced, with no wiggle room to work at home for more than a day a week. The employees also said there were still a disproportionate number of online meetings as opposed to in-person meetings, so their in-office days were very similar to their work-from-home set-ups – except for the money spent on coffee, lunch and transportation.

One Scotiabank employee, a working mother of two who joined the bank when remote work policies were in place, has a one-and-a-half-hour commute from her home to the bank’s main office building in Toronto’s financial district. She said she now has fewer hours during the day to do her job because of the commute. After a full day at work and child care duties in the evening, she logs back on to complete work that she would have finished earlier if she was able to mostly work from home.

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Both RBC and Scotiabank declined to respond specifically to questions about the in-office environment for their staff over the past year but reiterated that their return-to-office policies are not expected to change. Scotiabank spokesperson Adam Garisto added that staff have been “working onsite four days per week since last fall in all locations that space allows,” but that the bank’s goal is that “all teams will be onsite four days per week.”

Meanwhile, office vacancy rates for the city core’s top towers are inching down.

At Scotia Plaza, one of the downtown’s most prominent skyscrapers with its red granite colour, the availability rate dropped 23 per cent to 0.6 per cent in early August, according to CoStar data.

After some of Scotia Plaza’s large tenants gave up office space in the early years of the pandemic, the building’s owner, KingSett Capital, refurbished the building and turned the top floor into an event space with restaurant group Oliver & Bonacini.

“The good news is that we’re full,” said Jamie Petch, KingSett’s senior vice-president, office.

For the larger spaces, or space with multiple floors or a minimum of 50,000 square feet, the company now requires longer-term leases.

Other companies are investing in downtown office spaces, especially in tech.

Wealthsimple, a fintech company challenging the big banks, is expanding its real estate footprint, though without the forced return-to-office mandate of its much larger rivals.

Construction is underway on 90,000 square feet covering three floors of a mid-rise tower in The Well complex, with roughly 1,000 employees set to move in next year, said Diana McLachlan, chief people officer at the company. The new offices are roughly twice the size of its current headquarters on Spadina Ave. and the company has the right to take over the lease on the building’s remaining space as it grows.

While Wealthsimple maintains a hybrid work model, the larger offices will be used for onboarding new employees, quarterly team gatherings, client events and its internship program. “We’re really hearing from young, early talent that they want to be in the office and they want that space,” said Ms. McLachlan.

Zip, a San Francisco-based tech company that developed an AI-based platform for procurement, is similarly on the hunt for larger space to accommodate its 180 employees, with recruiting underway to expand that number.

The company has moved once since opening its first Toronto office west of downtown in 2022 to an 18,000-square-foot office on Front St. “We’re already beyond capacity there, so we’re looking for a longer-term home that will be significantly larger,” said Shaye Martin, vice-president of people.

Zip doesn’t have a rigid policy on hybrid work, leaving it up to individual teams, but Ms. Martin said most employees come in four to five days a week, with Toronto being “the most highly utilized of all our offices.” The company has 1,000 employees, including in offices in San Francisco, New York and London.

While the company had little trouble landing its current lease when downtown Toronto office space was more available, even a year later “the hunt is more challenging in terms of vacancy,” she said.

Royal Bank of Canada took 326,347 square feet at 200 Front St. West. When asked if RBC has enough space to accommodate all its employees, spokesperson Jeff Lanthier said: “We continuously review our plans to ensure we have appropriate accommodation for employees.”

CIBC took most of Shopify Inc.’s sublease at The Well, which opened in 2022 as remote work became entrenched and tenants rushed to give up space. The bank now has 258,197 square feet across several floors at the office complex. It is a few major blocks west of the financial core and the bank’s main office at CIBC Square, which is another large office complex that opened during the pandemic and is near Union Station, Toronto’s main commuter hub.

CIBC spokesperson Tom Wallis said the lease at The Well will consolidate several spaces and teams currently spread across the city into one new, modernized space.

Scotiabank took out three large leases in downtown Toronto. It took out 159,073 square feet at 1 Adelaide St. East, 128,278 square feet at 33 Yonge St. and 122,347 square feet at 351 King St. East (The Globe and Mail’s Toronto office is located in the same building). Scotiabank would not comment on whether it had enough office space to accommodate its employees except to say that its teams have been working together onsite four days per week in all locations that space allows.

Stripe LLC, a financial services company, took out 223,229 square feet at 530 Front St. West. Stripe declined to comment.

National Bank of Canada NA-T renewed its lease at 130 King St. West for 203,111 square feet. Spokesperson Alexandre Guay said the bank increased its office footprint when it renewed its lease as the bank is growing nationally. He said: “Some teams work entirely on-site, while others follow a hybrid model that combines in-person and remote work.”

Offices aren’t back everywhere

Other cities have had a much more mixed recovery in office building vacancies than downtown Toronto, according to CoStar data.

Calgary

Vacancy rates have fallen back to pre-pandemic levels, but the city was already grappling with empty buildings in early 2020 because of fallout from last decade’s collapse in oil prices. The city’s recovery has also been helped by office-to-residential conversions, which took a lot of empty inventory off the market, said CoStar’s Mr. Haythornthwaite. “In many respects, Calgary was quicker to pursue large-scale interventions because the market’s challenges were already evident before the pandemic,” he said.

Vancouver and Montreal

While employers in the two cities have embraced return-to-office mandates, both markets are still adjusting to a world in which many tenants require less office space than they did in 2019, even as more office space has come online.

Greater Toronto

While large, premium office buildings in the downtown core have recovered, office space across the broader Greater Toronto Area is still suffering. The GTA office vacancy rate sits at roughly 8 per cent, according to CoStar, down from roughly 11.5 per cent last year, but still double where it was in 2019.

Tales from the office revival

The Globe and Mail spoke with workers and businesses about the downtown Toronto revival, and the pros and cons of returning to the office. As told to Sophia Bertuzzi.

“This might be a really unpopular opinion for our generation, but I actually love coming into the office. I find that it just helps me be a lot more productive to be around other people. I get to engage with my coworkers, make friends, be motivated by the people around me, and I find that when I’m sitting at my desk, it’s often that things will happen and I’ll get to up, move around, talk to people. But at home, I can sit and not leave my desk for eight hours straight.

“Overall, I think it’s just better for my mental health and my productivity to be surrounded by other people. My office is quite young, fun, collaborative, so it might not be the same for everyone.”

“I like being in office – it’s the commute that I don’t like. I live in Kleinberg, so my commute is pretty far. Of course, return to work means certain parts of your budget increase. It does cost to come downtown. I do read a lot more to go on the train, listen to a lot of audiobooks. You have to make the best use of your time.”

“I like being in office three days a week. I feel like that’s almost the perfect amount to go in the office, and I have a really great team who works in Toronto as well. Once a month, I would say we try to co-ordinate our days and go to the same office. [Her company has multiple offices in the city.]

“It’s nice to be able to collaborate, bounce off ideas in person. It’s nice to be able to still have two days at home, so I get a little break whenever I need it.”

“There’s been drastic change. I feel like due to summer, especially in the last few months, more people want to work from the office itself rather than being at home. With winter coming, we might expect people going back to working from home.”

“A lot of people worked from home. That was three years of no customers, but to be honest, during those three years, a lot of dry cleaners shut down and I got lucky because of the location. My businesses work together, so it helps me survive. I got Elite [her dog, a French Bulldog mix] in 2022. I’m super lucky because she’s like a mascot for the store, people come to see her.

“In 2024, slowly more and more people came back to the office, starting at two days a week, and then three. Every year they come back more and more days. Slowly we’ve built up our new customers, those who were looking for new dry cleaners.”