With over three decades of experience in commercial real estate, Joe Almeida brings a deep and trusted perspective to the Toronto office market. As Managing Director for Ontario, he oversees strategic operations and growth across the province, uniquely positioning him to speak to the trends, challenges, and opportunities shaping the real estate market.
Joe’s depth of knowledge expands directly into the banking industry as, here, he explores recent announcements from Canada’s major banks to bring employees back to office four days a week. Joe shares what this means for existing downtown office footprints, how Trophy property availability is shrinking, and how Avison Young is actively involved in developing and implementing clients’ return-to-office strategies.
JOE: This marks an important shift. The big banks currently occupy approximately 13% of Downtown Toronto’s 82-msf office inventory. Financial institutions were the first employers to quickly adopt work from home in 2020, with low or minimal days in the office since then.
Many departments have changed the way they use space since 2020. And while the big banks have recently made these announcements about four days a week in-office, some of their departments, like the wealth advisory side of the business, have already been in the office five days a week for some time. But the recent announcements are a way to say, “yes, it's for all parts of the bank.”
Over the last five years, financial sector jobs grew by 20%. Over the same period, financial institutions did not increase their office footprint – rather the opposite. So, they will need more space. In fact, they're all actively sourcing opportunities either for expansion of existing premises, or new space in new towers. Like every employer today, financial institutions are looking for space that helps with their return to office programs, so they're looking for space that's well located, highly amenitized, and that provides a vibrant ‘in-office’ work experience for their staff.
It becomes part of this whole overarching trend we're seeing in the market right now, which is the ongoing flight to quality.
Change in employment by sector since February 2020 in Ontario
Source: Statistics Canada
Note: Employment by industry, monthly, seasonally adjusted
JOE: Indeed, from a peak of nearly 8.6 msf that was under construction in 2020, there's nothing new underway now, other than 141 Bay Street (CIBC Square Phase II), which will quite likely be fully leased before it's officially completed.
It's not just the banks that are increasing their footprints at this point in time. Banks must compete with an active group of many different sectors of tenants who are on the hunt for the best office space. In fact, in Q2 2025, Downtown Toronto posted its strongest quarterly leasing activity since Q4 2018. For this reason, tenants must look at more than just Trophy towers, such as class A properties, potential suburban locations, and spaces outside the traditional options. Tenants want to have control of a campus of some sort, and the options are limited, so they're going to have to get creative… and in most cases move quickly.
Direct vacancy by class
Trophy
3.0%
Class A
13.0%
Class B
19.4%
Class C
12.2%
On the other hand, some large employers have decided not to move at all and maintain the hybrid model. They may change their strategy in the future, as return-to-office is still not all black and white. Some employers are using remote work as a differentiator to attract employees. That said, the main reason why so many financial institutions are now bringing their employees back to the physical office is to drive employee engagement and productivity. They see the benefits of having their people together. And as we move forward and the banks start to measure the productivity gains bringing their teams together four days a week, that in itself will provide another case for a continued return to office, not only for the banking industry, but for the city overall.
Downtown Toronto office under construction (sf)
JOE: Companies who measure productivity by billable hours, like law firms, were the first to increase the number of days in the office. Over time, we will better understand the impact of the recent and historic work-from-home experiment, and its pros and cons.
I think the reason for bringing people back to the office goes beyond productivity. It is about employee engagement and an employee's tenure with a company. There just isn't as much connection between an employer and an employee (or an employee and his/her colleagues) in a remote work environment. If you have to retrain someone every three years because you know they're not engaged and they're moving on, you know overall productivity will be impacted.
JOE: Every organization is different, and every industry is different. Even roles within a company are different. What we're seeing is that employers are giving sufficient time for this program to evolve. So, no one is saying, “Starting tomorrow, you're in 40 hours a week.” We need to give people time to plan the change. This shift has an impact on family life. It'll impact commutes. A lot of behaviours will have to adjust.
The Avison Young workplace strategy team is actively involved in developing and implementing our clients’ return-to-office strategies. The days when brokers engaged with an employer to provide basic real estate answers are gone. Now it's about understanding how your workplace is currently set up. What is your role? Where do you want to be? The banks are a perfect example. They've hired a lot of people over the last five years, many of whom have been working from home, during a time of crisis. So now is the opportunity to plan and reorganize entire departments, move people to the right place. Many employees are coming back to office from being fully remote, for example.
Our brokers, alongside our workplace strategy advisors and our project managers, build out a new space that satisfies all needs. It's really a multi-layered team effort at Avison Young, going beyond the square footage and the site location. It's a dialogue on organizing the work and how the space can support the client’s culture, employees, and business strategy.
Have more questions? Joe has the answers.
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Joe Almeida
Principal, Managing Director Ontario, Broker of Record, Avison Young Commercial Real Estate Services, LP, Brokerage
Ottawa, Toronto, Toronto North, Toronto West, Southwestern Ontario
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