Dream Office posted a notable increase in occupancy during the second quarter, adding to evidence that Toronto’s office market is gradually recovering after years of higher vacancies.

The landlord’s downtown Toronto in-place occupancy rose 2.3 percentage points to 83.2 per cent. Committed occupancy, which includes signed leases for space tenants have not yet occupied, reached 90 per cent.

New leases and renewals more than offset space returned through expiries during the quarter. Dream did not provide a property-by-property breakdown of all those changes.

Though one identified contributor was 67 Richmond Street West, where Dream recently completed a modernization. A major technology tenant took occupancy of 20,000 square feet in June, with the remaining 12,000 square feet scheduled for December.

Dream has also secured leases at 30 Adelaide Street East and 74 Victoria Street that are scheduled to begin in stages through the end of the year. The company did not say whether either building directly contributed to the second-quarter improvements.

At 74 Victoria, the new leasing represents progress following a 206,000-square-foot lease expiry in late 2024. Dream has since undertaken lobby renovations and constructed move-in-ready suites as it works to refill the building.

The same group of downtown Toronto properties generated 9.2 per cent more operating income than a year earlier, driven by higher occupancy from new leasing. Across Dream’s established portfolio as a whole, operating income rose 6.2 per cent.

Dream’s occupancy gains came amid broader signs of recovery in Toronto’s office market. Greater Toronto Area office vacancy declined for a second consecutive quarter to 16.1 per cent, according to commercial real estate advisory firm Cresa.

Pictured: Dream’s recently renovated office space at 67 Richmond Street W., Toronto

Credit: Dream