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Key metric for Toronto’s downtown office buildings signals investment risks are moving higher

Increase in estimated capitalization rates leaves little room for doubt on asset class's vulnerability
A street in downtown Toronto. (Getty Images)
A street in downtown Toronto. (Getty Images)
CoStar Analytics
September 16, 2025 | 11:30 AM

Over the past five years, office capitalization rates, a measure of the expected yield on net operating income in the first year of owning an investment property, have expanded across the Greater Toronto Area, but nowhere more dramatically than in downtown Toronto.

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News | Key metric for Toronto’s downtown office buildings signals investment risks are moving higher