But Avison Young found a positive trend happening in the office sector of Toronto. Although availability and vacancy rates were still both higher than a year ago, they finally started to nudge down in the final quarter of 2010.
Availability for Toronto office space was 15.3% in the previous quarter, compared to 14.3% in the most recent one.
Bill Argeropoulos, vice president and director of research for Avison Young, said the key metric to look at to determine the health of a market is sublet space. After sublet space peaked at 1.5 million square feet halfway through 2010, that figure is now on the verge of dropping below one million square feet for the first time in a year.
Availability can range dramatically depending where buyers look, however. In the more established Airport Corporate Centre, the availability rate was 23.7% in the fourth quarter of 2010. That compares to 11.1% in Meadowvale, where a lot of newer development has happened lately.
"Save for the Airport Corporate Centre, which has a significant tenant base still impacted by a slow U.S. recovery, this may be the beginning of the end of the tenant's market in the GTA West," said Martin Dockrill, Avison Young principal and managing director of its Mississauga office.
Meanwhile, the industrial market in the GTA has continued to improve, according to Avison Young. The industrial availability rate declined for the fourth straight quarter to hit 5.2%.
"Barring an unforeseen shock, the gains made in 2010 are expected to carry over to 2011," said the report.
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The office vacancy rate in the Greater Toronto Area (GTA) was 10.5% for the final quarter of 2009, compared to 12.9% for the final quarter of 2010. In the third quarter of 2010, the vacancy rate was 13%.