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1. SPRING 2013 | OFFICE
COLLIERS INTERNATIONAL | MARKET REPORT
TORONTO ONTARIO
Canadian Market Overview
The Canadian economy has been sending mixed signals during recent months, with
some current domestic indicators looking more positive while others are not so
encouraging. Most uplifting was the February employment report with the addition
of just over 50,000 jobs. Good news for the office sector was the increase of
service sector jobs, many of which were full-time positions. Overall retail sales were
pretty flat, with auto sales excluded, following a drop in December. The retail sales
numbers may indicate a reduced appetite for spending during 2013 as household
debt weighs heavily on many consumers. A sobering trend becoming evident in the
housing market is the downward trajectory of new home starts as the market seeks
to find a sustainable level of starts.
Downtown office vacancies, with minor exceptions, are sitting in mid-single
digits and rents are reflecting the tight market conditions in prime CBD locations.
Industrial markets are similarly well positioned, albeit with less upward pressure on
rents in the Eastern markets. Retail property continues to benefit from U.S. retailer
migration into Canada with retailers vying for prime mall space. Reflecting the above
conditions, commercial market fundamentals across the country are anticipated to
remain solid throughout 2013.
MARKET INDICATORS
2012 Q4* 2013 Q1*
Greater Toronto Area Overview
The Greater Toronto Area office market experienced heightened activity in the last
INVENTORY two quarters, especially in the two largest markets – Downtown and the GTA West
market. The Downtown market experienced increased demand for quality space,
NET ABSORPTION leading several new developments from the proposed stages into the planned/under
construction phases.
VACANCY RATE
Despite the relatively low overall absorption for the GTA West market, there were
ASKING NET RENT significant tenant moves to and from the market leading to nearly a balanced amount
of negative and positive absorption as the market continues to be extremely active.
ADDITIONAL RENT
*change in comparison to previous quarter
www.colliers.com/toronto

2. MARKET REPORT | SPRING 2013 | OFFICE | TORONTO
GTA Markets Downtown
The downtown market has seen an increase
in demand for office space as shown in the
steady decline in the vacancy rate from 4.6
percent to 4.2 percent since last quarter. The
Financial Core has seen a more significant
decline in vacancy from 5.2 percent to 4.5
percent, indicating continued growth in
demand for space within this submarket.
GTA East Heightened leasing activity, especially with
GTA North the more significant deals done at Commerce
Court West, has resulted in fewer large block
Central East
opportunities. In the past six months, the
Midtown
Downtown several large block spaces that have been
Central North
vacant in the building have been leased to
LAKE ONTARIO sizeable tenants, including Chubb Insurance,
GTA West
Inmet Mining and Laurentian Bank. The
reasonable rates for this AAA class asset
and lack of large block opportunities in AAA
$24.12
and A class properties facilitated tenant
DOWNTOWN
OFFICE 4.2% 198,464 Wgt Avg. Asking
interest and resulted in this building being
STATISTICS Vacancy Rate Absorption 2013 Q1 almost fully leased. Davies Ward Phillips and
Net Rent
GTA | HISTORICAL PERFORMANCE & FORECAST | Q1 2003 - Q1 2014F
Net Absorption Vacancy Rate Asking Net Rent
25 25
FORECAST
20 20
Asking Net Rent ($)/Vacancy Rate (%)
15 15
Net Absorption (100,000 SF)
10 10
5 5
- 0
(5) -5
(10) -10
1 2 3 4 1 2 3 4 1 2 3 4 1 2 3 4 1 2 3 4 1 2 3 4 1 2 3 4 1 2 3 4 1 2 3 4 1 2 3 4 1 2 3 4 1
2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013
Source: Colliers International, April 2013
P. 2 | COLLIERS INTERNATIONAL

3. MARKET REPORT | SPRING 2013 | OFFICE | TORONTO
Vineberg LLP took 103,515 square feet of Quick absorption of new product has in the availability rate, which dropped from
space at 155 Wellington Street West adding boosted developer confidence shown in the 6.5 percent last quarter to 5.6 percent this
to the significant Class A absorption this escalation in the number of developments quarter. This demographic trend is expected
quarter. moving into the construction phase before to grow as city planners continue to move
pre-leasing commitments reach the towards the creation of “live, play, work”
Tenants looking for space over 50,000 standard 60 percent. Allied Properties communities throughout the downtown
square feet will find 4 opportunities in AAA REIT has begun construction on Queen hubs, namely south-bound towards the
properties compared to A class where Richmond Center West with 18 percent pre- waterfront. Financial services remain the
there are no availabilities for this space leased. With roughly 5 million square feet of key drivers of demand for new office space
requirement. The vacancy rate for A class office space currently under construction in with Deloitte & Touche and Ernst & Young
is 4.2 percent compared to 5.0 percent for the downtown core and 17 projects in the accounting for nearly 600,000 square feet of
AAA class properties, suggesting increased planned/proposed phase, new supply could pre-leased space in deals done this quarter.
appeal in the lower rental rates that A class add a potential 14 million square feet to the The upward pressure on rental rates in
properties provide. downtown office inventory from 2015 to conjunction with low vacancy rates reflects
2018. strength in the downtown office leasing
Demand for new space is strong in market. It is expected that the activity within
As residential developments continue to
downtown Toronto with pre-leasing activity A class properties will remain high as newly
rise and companies such as Google, Coca-
ensuring projects such as 2 Adelaide constructed buildings continue to attract A
Cola and TELUS look to attract a younger
Street West, which is 43 percent pre- class tenants causing downward pressure
generation of talent, there is an expectation
leased, continue to the construction phase on rental rates in existing buildings within
that many companies will want to be located
adding an additional 900,000 square feet this asset class.
in the core. This is exhibited by the decrease
of inventory to the Financial Core in 2016.
GTA DOWNTOWN | HISTORICAL PERFORMANCE & FORECAST | Q1 2003 - Q1 2014F
Net Absorption Vacancy Rate Asking Net Rent
12 30
FORECAST
10 25
8 20
Asking Net Rent ($) / Availability Rate (%)
6 15
Net Absorption (100.000 SF)
4 10
2 5
0 0
-2 -5
-4 -10
-6 -15
-8 -20
1 2 3 4 1 2 3 4 1 2 3 4 1 2 3 4 1 2 3 4 1 2 3 4 1 2 3 4 1 2 3 4 1 2 3 4 1 2 3 4 1 2 3 4 1
2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013
Source: Colliers International, April 2013
COLLIERS INTERNATIONAL | P. 3

4. MARKET REPORT | SPRING 2013 | OFFICE | TORONTO
Midtown
Leasing activity has remained stagnant in However, there was a heightened amount of
Midtown with the vacancy rate rising to 5.2 activity this quarter with deals that will impact
percent this quarter. At the end of 2012, absorption over the next few quarters. By
Midtown hit an all-time low in vacancy of 5.0 year-end, over 60,000 square feet will be
percent and average net asking rates were occupied by three tenants.
at their highest at $17.73 per square foot this
quarter. The residential activity continues with the
early stage of construction beginning at Minto
Demand for residential space in Midtown 30Roe, a 34-storey residential condominium
continues to drive developer interest in development by Minto located at Yonge and
new condo construction. The lack of new Eglinton. This development will add 397 units
commercial office construction has resulted to the residential market in spring 2015.
in the tight marketplace at Yonge and Bloor
with total availability at 5.1 percent this Morguard Investments and Pensionfund
quarter and a continued rise in rental rates Realty have submitted an application to the
from $19.66 last quarter to $20.93. City of Toronto to build an 83-storey tower
on top of the Holt Renfrew Centre on Bloor
The Yonge and Eglinton submarket appears Street. This mixed-use development will
to tell a different story with vacancy rising contain an 8-storey office podium with the
from 6.5 percent to 7.0 percent this quarter. remaining floors to be residential condos.
MIDTOWN
OFFICE 5.2% -48,786 $17.70
Wgt Avg. Asking
STATISTICS Vacancy Rate Absorption 2013 Q1
Net Rent
MIDTOWN | HISTORICAL PERFORMANCE & FORECAST | Q1 2003 - Q1 2014F
Net Absorption Vacancy Rate Asking Net Rent
4 20
FORECAST
3 15
Asking Net Rent ($) / Vacancy Rate (%)
2 10
Net Absorption (100,000 SF)
1 5
0 0
-1 -5
-2 -10
-3 -15
-4 -20
1 2 3 4 1 2 3 4 1 2 3 4 1 2 3 4 1 2 3 4 1 2 3 4 1 2 3 4 1 2 3 4 1 2 3 4 1 2 3 4 1 2 3 4 1
2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013
Source: Colliers International, April 2013
P. 4 | COLLIERS INTERNATIONAL

5. MARKET REPORT | SPRING 2013 | OFFICE | TORONTO
GTA North
The GTA North market experienced a The Highway 404-407 submarket
further decline in vacancy this quarter to 6.1 experienced heightened activity this quarter
percent – an all-time low for this market. A with some significant tenant moves. Although
significant amount of absorption occurred absorption levels seem fairly minimal, several
in the Vaughan submarket, where 610 tenants in the 10-20,000 square foot range
Applewood Crescent was newly occupied absorbed space in the market this quarter,
by CIBC, Scotia Bank and Classified Media whereas four different tenants vacated space
throughout the last six months. Vaughan this quarter. Toshiba is expected to take
continues to have the highest suburban occupancy of their property at 75 Tiverton
submarket Class A average net asking rent Court within the next six months, which will
at $22.67 this quarter. account for nearly 80,000 square feet of
positive absorption.
There are limited large block opportunities
With very limited new supply in the pipeline,
in Vaughan with only 1 option with
and a consistently low vacancy rate, it is
immediate occupancy over 25,000 square
expected that the GTA North market will
feet at 7300 Keele Street, a total of 45,926
remain strong with vacancy expected to hit
square feet available with an asking net
5.6 percent by year-end. Net asking rents
rent of $23.50.
are forecasted to remain at the current levels.
GTA NORTH
OFFICE 6.1% 46,030 $15.25
Wgt Avg. Asking
STATISTICS Vacancy Rate Absorption 2013 Q1
Net Rent
GTA NORTH | HISTORICAL PERFORMANCE & FORECAST | Q1 2003 - Q1 2014F
Net Absorption Vacancy Rate Asking Net Rent
5 25
FORECAST
4 20
Asking Net Rent ($) / Vacancy Rate (%)
3 15
Net Absorption (100,000 SF)
2 10
1 5
0 0
-1 -5
-2 -10
-3 -15
1 2 3 4 1 2 3 4 1 2 3 4 1 2 3 4 1 2 3 4 1 2 3 4 1 2 3 4 1 2 3 4 1 2 3 4 1 2 3 4 1 2 3 4 1
2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013
Source: Colliers International, April 2013
COLLIERS INTERNATIONAL | P. 5

6. MARKET REPORT | SPRING 2013 | OFFICE | TORONTO
GTA East
The GTA East market, the smallest of all The current inventory in this market is
GTA office markets at just 5.5 million square aging, with the majority of buildings built
feet, continues to post the highest vacancy in the 1980’s. In the last ten years, there
rate in the GTA, at 8.6 percent this quarter. has been no significant new supply in this
With negative absorption reported in the last market, keeping average net asking rates at
two quarters, the market has seen some of affordable levels.
its more significant sized tenants relocate.
It is expected that asking rates will decline
Last quarter, CUPE left their space at 305
in the GTA East market due to the number
Milner Avenue (27,489 square feet) to
of available options. The vacancy rate is
relocate to 80 Commerce Valley Drive East
expected to continue to hover between 8 to
in the Markham Town Centre submarket.
9 percent.
Currently, there are several large block
opportunities in the GTA East market, with
six direct options over 20,000 square feet.
Nearly all of these options are available
immediately, currently sitting vacant.
GTA EAST
OFFICE 8.6% -20,262 $13.14
Wgt Avg. Asking
STATISTICS Vacancy Rate Absorption 2013 Q1
Net Rent
GTA EAST | HISTORICAL PERFORMANCE & FORECAST | Q1 2003 - Q1 2014F
Net Absorption Vacancy Rate Net Asking Rent
3 20
FORECAST
15
2
Asking Net Rent ($) / Vacancy Ret (%)
10
Net Absorption (100,000 SF)
1
5
0 0
-5
-1
-10
-2
-15
-3 -20
1 2 3 4 1 2 3 4 1 2 3 4 1 2 3 4 1 2 3 4 1 2 3 4 1 2 3 4 1 2 3 4 1 2 3 4 1 2 3 4 1 2 3 4 1
2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013
Source: Colliers International, April 2013
P. 6 | COLLIERS INTERNATIONAL

7. MARKET REPORT | SPRING 2013 | OFFICE | TORONTO
GTA West
After 2 consecutive quarters of relatively space at 2425 Matheson Boulevard East. Some tenants chose relocation options in
high absorption, the GTA West market Both Sykes and Burger King accounted for more central markets, such as Replicon who
posted low levels of absorption this quarter negative absorption in the Class A Hwy left 7420 Airport Road upon lease expiry to
at a total of 4,806 square feet. The 427-Bloor-Islington submarket this quarter, relocate to 48 Yonge Street.
Mississauga City Centre and Meadowvale leaving a total of nearly 25,000 square feet
The GTA West market is expected to
submarkets accounted for the majority at 10 Four Seasons Place and 401 The West
continue to show higher than usual levels
of the positive absorption this quarter, Mall.
of activity throughout the next few quarters
recorded at 47,787 square feet and 44,943
The Meadowvale Class A submarket with some larger deals expecting to close.
square feet respectively, however, seven of
absorbed two large tenancies this quarter; It is forecasted that the average net asking
the twelve submarkets residing in the GTA
Superior Energy took space at 6750 rates will remain stable throughout the next
West market posted negative absorption
Century Avenue and Golder Associates took few quarters with a slight decrease in the
this quarter, with the most extreme being in
an additional 25,000 square feet at 6925 vacancy rate.
the Hwy 427-Bloor-Islington submarket at
Century Avenue. However, Intact Insurance
47,534 square feet of negative absorption.
left over 20,000 square feet at 6733
Despite the low overall absorption number, Mississauga Road causing total absorption
there was a heightened amount of activity levels to drop.
this quarter in this market, with some new
tenants coming into the market as well as
several companies either vacating their
space or downsizing this quarter, including
GTA WEST
OFFICE 7.8% 4,806 $14.73
Wgt Avg. Asking
STATISTICS Vacancy Rate Absorption 2013 Q1
RIM and Odyssey Financial, both leaving Net Rent
GTA WEST | HISTORICAL PERFORMANCE & FORECAST | Q1 2003 - Q1 2014F
Net Absorption Vacancy Rate Asking Net Rent
10 30
FORECAST
8 25
20
6
Asking Net Rent ($) / Vacancy Ret (%)
15
Net Absorption (100,000 SF)
4
10
2
5
0
0
-2
-5
-4
-10
-6 -15
-8 -20
1 2 3 4 1 2 3 4 1 2 3 4 1 2 3 4 1 2 3 4 1 2 3 4 1 2 3 4 1 2 3 4 1 2 3 4 1 2 3 4 1 2 3 4 1
2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013
Source: Colliers International, April 2013
COLLIERS INTERNATIONAL | P. 7

8. MARKET REPORT | SPRING 2013 | OFFICE | TORONTO
Central North
The Central North market experienced a slight increase in Our Services
vacancy rates this quarter, posting negative absorption of
> Brokerage
29,975 square feet. One noticeable vacancy in the Dufferin/
Finch submarket was the 12,500 square foot vacancy at 777
Supertest Road, formerly occupied by Alpine who downsized
this quarter. > Corporate Solutions
> Investment Services
The North Yonge Corridor continues to be an extremely tight > Project Management
market with a low vacancy rate at 2.8 percent. It continues
> Real Estate Management Services
to post one of the higher average asking net rents for Class A
space at $20.04 per square foot. With large block opportunities > Valuation & Advisory Services
in this market being somewhat rare, currently, 3 of the 4
options over 25,000 square feet are sublease opportunities.
CONTACT INFORMATION
CENTRAL NORTH OFFICE STATISTICS Scott Addison
President | Eastern Canada
4.3% -29,975 $15.68 +1 416 620 2800
Vacancy Rate Absorption 2013 Q1 Wgt Avg. Asking
Net Rent scott.addison@colliers.com
John Arnoldi
Central East Executive Managing Director
Toronto Region
The Central East market experienced a rise in vacancy this
+1 416 643 3733
quarter to 6.1 percent with a quarterly negative absorption
john.arnoldi@colliers.com
of nearly 40,000 square feet. There were two significant
vacancies in the Class A Consumers Road submarket with
Direct Energy shutting down their Toronto operations Shawna Rogowski
causing over 60,000 square feet of vacancy at 2225 Market Intelligence Manager
Sheppard Avenue East, as well as Ally Financial leaving Toronto Region
nearly 20,000 square feet at 2235 Sheppard Avenue East. +1 416 643 3764
shawna.rogowski@colliers.com
It is expected that the vacancy rate will decline to the mid-5
percent range by year-end and net asking rates will hover in
the mid-$12.00 range for the market. For more information on available
properties, additional research
reports, and our services please visit
www.collierscanada.com/toronto
CENTRAL EAST OFFICE STATISTICS
6.1% -39,855 $12.32 +1 416 777 2200
Vacancy Rate Absorption 2013 Q1 Wgt Avg. Asking
Net Rent
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