Sanjeev Sawhney



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The Impact of Remote Work on Commercial Real Estate in Canadian Cities

The year 2020 marked a paradigm shift in the way businesses operate. With the onset of the COVID-19 pandemic, remote work transitioned from being a flexible work perk to a necessary norm. As companies adapted, the footprint of empty office spaces in major Canadian cities expanded, leading us to ponder the future of commercial real estate (CRE). Here, we'll explore how the rise of remote work is affecting the demand for office spaces in Canadian cities and the evolving needs of commercial tenants.

The Shrinking Demand for Office Spaces

While Canada’s metropolitan areas have traditionally been hubs for big corporations and bustling startups, the demand for office spaces has seen a significant decline. Toronto, Vancouver, Montreal, and Calgary, known for their skyscrapers teeming with office goers, are now faced with an oversupply of commercial real estate. A report from CBRE Group Inc. highlighted that office vacancies in Canada hit a 16-year high in 2021.

The reasons are multifold:

  1. Cost Savings: Maintaining office space is an overhead that many businesses found they could reduce or eliminate. Utilities, rent, and maintenance costs can be redirected towards improving digital infrastructure and other investments.

  2. Employee Preference: A PwC Canada report found that a significant percentage of workers prefer a flexible work model. The appeal of avoiding daily commutes, achieving a better work-life balance, and working in a personalized environment is strong.

  3. Safety Concerns: With unpredictable pandemic-related developments, having fewer centralized staff means less risk of widespread outbreaks among employees.

The Changing Face of Commercial Spaces

As demand shrinks, the nature of the demand is evolving too. Here's how:

  • Flexible Office Spaces: Instead of committing to long-term leases, businesses are now looking for flexible renting options. Spaces that can be rented for days or months, as opposed to years, are becoming popular.

  • Hybrid Workspaces: Companies that are adopting a hybrid work model need spaces that cater to both in-person and remote employees. This means state-of-the-art video conferencing facilities, hot desks, and collaborative spaces.

  • Emphasis on Wellness: The health and well-being of employees have taken center stage. Modern commercial spaces are now emphasizing natural lighting, open spaces, wellness rooms, and advanced HVAC systems.

  • Reduced Space Requirements: With a fraction of employees coming in, companies are opting for smaller, more efficient spaces.

The Silver Lining for Commercial Real Estate

While things may seem bleak, there's potential for rejuvenation in the commercial real estate sector:

  1. Repurposing Office Spaces: Large office spaces can be repurposed. We might see more co-working spaces, educational institutions, or even residential conversions springing up in prime locations.

  2. Increased Demand Outside Major Cities: As people move to suburban or rural areas thanks to remote work flexibility, there might be increased commercial space demand in these previously overlooked regions.

  3. Innovation in Offerings: Commercial real estate developers and brokers have an opportunity to innovate. This could be in the form of rent models, office designs, or additional services.


The world of work is undergoing a transformative phase, and its effects on commercial real estate, especially in bustling Canadian cities, are evident. While the traditional office space might be seeing reduced demand, the sector's future hinges on adaptability, innovation, and alignment with the evolving needs of the modern workforce.

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