This spark report is first of the Colliers 2019 Tech Insights, a report series highlighting various aspects of the Greater Toronto Area’s technology industry.
There’s evidence of technology tenants rapidly expanding in the GTA, showing a 203% increase in the number of lease transactions year-over-year. This brings the GTA’s tech occupied footprint up to 18.7M SF, representing 9.4% of the region’s total office inventory.
Startups and younger tech firms have limited bargaining power in today’s near zero vacancy market, impacting their ability to negotiate flexible lease terms. As a result, a concentration of young tech firms are influencing the rise in demand for flexible workspace options (coworking) and pushing for shorter lease durations in the GTA Central market.
With lease durations only able to be negotiated so low, it’s more likely the popularity in flexible workspace options will continue to grow. In the upcoming quarters, the migration of young tech tenants from downtown into the midtown and suburban market is a reasonable assumption, with these younger tenants being mirrored by mature, suburban tech tenants moving their offices downtown.