GWL Realty Advisors has acquired Citigroup Place, a 20-storey office tower directly across York Street from Union Station, on behalf of an institutional client as leasing demand improves for Toronto’s best-located buildings.

The 344,000-square-foot Class A tower at 123 Front St. W. is approximately 93 per cent leased. Major tenants include Citigroup’s Canadian headquarters and Teranet, both of which recently signed long-term renewals.

The property occupies a one-acre site at the southwest corner of York and Front streets. It is connected to the PATH network and offers immediate access to GO Transit, the TTC, VIA Rail and the UP Express.

Steven Marino, executive vice-president of portfolio management at GWL Realty Advisors, said leasing activity is increasing as tenants favour high-quality offices that provide commuter convenience.

“The investment in Citigroup Place speaks to our conviction in high-quality, well-located assets that are positioned to deliver strong, resilient cash flow,” Marino told Connect. “The asset’s irreplaceable location in the heart of downtown Toronto and its immediate proximity to Union Station affords it a distinct competitive advantage, as tenants look to access talent from across the Greater Toronto Area.”

The acquisition comes amid signs of renewed momentum in Toronto’s office leasing market. Colliers reported more than 523,000 square feet of positive net absorption during the second quarter of 2026, reducing the city’s overall vacancy rate to 10.6 per cent. Vacancy across the downtown and midtown core fell below 10 per cent for the first time since the third quarter of 2022.

The recovery has been most pronounced at the upper end of the market. CBRE reported a 2.6 per cent vacancy rate among downtown Toronto trophy office properties during the second quarter, indicating limited availability in the city’s premium buildings.

Marino said return-to-office mandates in the public and private sectors, combined with a limited pipeline of new office development, are expected to tighten leasing conditions further.

“The transaction is a reflection of the growing strength of the City of Toronto financial core’s office leasing market,” he said. “This is manifesting in a material increase in leasing activity across our investment portfolio, and we believe best-in-class assets will continue to maintain a distinct competitive advantage moving forward.”

CBRE reported that Canada’s office construction pipeline had fallen to a two-decade low, with no significant deliveries expected beyond 2027.

The purchase price of Citigroup Place was not disclosed.

Pictured: Citigroup Place at 123 Front St. W. in downtown Toronto.

Credit: Raysonho/Wikimedia Commons.