supply constraints apply upward pressure on CBD rents, waiting game continues
Overall availability continues to tighten as tenants vie for limited high-quality office space. Total market availability declined 260 basis points over the year to 7.2%. Availability is even more constrained in the CBD, now at 3.1% compared to 6.0% one year prior. Correspondingly, CBD gross asking rents climbed to $59.13 per square foot (psf) in Q1 – a 6.2% increase year-over-year. Technology, media, advertising and information (TAMI) sector tenants continue to flock downtown as the market proves its value in attracting and retaining employees. In the near term, increased rents and limited availability are expected to continue. Though, supply pressures may lessen over the next 12-36 months as new and redeveloped buildings are brought online. Tenants engaging in early real estate planning will be best-positioned to meet the shift in the supply-demand equilibrium.