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“Anybody who’s been in Toronto over the last 25 years has not seen a market this strong,” said James Butchard, vice president with tenant advisory and transaction services at CBRE. “With Amazon and other technology companies showing interest in Toronto, it’s driving more and more companies to ask why they aren’t in Toronto.”

The low availability is driving prices higher, particularly in Toronto, where net rents for top grade office space surged 10.7 per cent to $30.96 per square foot in 2017, according to the CBRE report. Rents in Vancouver rose to $31.77 per square foot, a 5 per cent increase from the same period last year. With a vacancy rate of 5 per cent, Vancouver also has the distinction of being the second tightest market in North America after Toronto.

In both cities, technology firms are leading the charge, accounting for 21 per cent of all tenant demand over the year.

Anybody who has been in Toronto over the last 25 years has not seen a market this strong James Butchard

For startups like ReUp, the first challenge is finding space. The second is securing a lease that is compatible with their rapid growth projections and the dramatic ups and downs of the tech industry. Though leases are often three to five years in length, many startups fail or are bought out by bigger players long before that time has elapsed, Shahjahan said.

For the rest, “the goal is to double or triple in size every year,” he added. Given the market constraints in Toronto, these firms often rent offices that are larger than they currently need rather than risk being unable to find the space later on. The excess space is then sublet to smaller tech players like ReUp on agreements as short as six months. When their time is up, many of these secondary players are forced to pack up on move on to other temporary space.