TORONTO -- Commercial real estate firm CBRE says Toronto has the lowest downtown office vacancy rate in North America.

A new report says the vacancy rate in Toronto's office real estate market dropped to 4.9 per cent in the second quarter of the year.

That's a decline of 40 basis points compared to the first quarter of the year, when the vacancy rate was 5.3 per cent.

CBRE says vacancy rates in the office market in downtown Toronto have been going down since 2013, thanks to strong demand from tenants.

That's despite the fact that almost four million square feet of new space has come onto the market since then.

In terms of industrial space, Vancouver has overtaken Toronto to have the lowest availability rate in the country, dropping to 3.6 per cent during the second quarter, a decrease of 50 basis points from the previous quarter.