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FOR IMMEDIATE RELEASE

Weak Economy Continues to Weigh on Toronto’s Office Market
-- Landlords Brace For Challenging Environment, While Tenants Explore Increased Options; Healthier Conditions Expected in 2011 -Toronto, July 7, 2009 – The economic downturn continues to shift Toronto’s office market further in favour of tenants as vacancy rates advance upwards reaching 5.7 per cent at the end of June 2009. These vacancy rate levels are equivalent to 10.4 million square feet, not seen since late 2007, and are coupled by a 6.4 per cent decline in the Average Asking Net Rent, currently at $17.58 per square foot, down from last year’s peak level of $18.79 in the third quarter of 2008.

According to the Colliers International 2009 Semi-annual Office Market Report and Forecast released today, the GTA office market is expected to face this challenging economic environment until early 2011 with a further increase in vacancy levels between seven and eight per cent, and a continued decline in Asking Net Rent anticipated to fall below $13 per square foot.

“Softening market fundamentals are a continued reality of the GTA office market. A twelve-year record high unemployment rate and flat GDP growth have already caused higher levels of vacant space in the market, while another increase is expected shortly with the delivery of new office inventory in the downtown and GTA West market,” says John Arnoldi, Managing Director at Colliers International in Toronto. “While technically it is still a landlord’s market, these factors are putting growing pressure on landlords who have started to implement various strategies and incentives to attract and retain tenants. Tenants looking for space on the other hand, will enjoy better pricing and more space options as the market continues to ease.”

The study also reveals that landlords are not the only ones in a pinch. Squeezed by the economic downturn and staff reductions, a growing number of tenants are pushing unneeded office space back to the market in the form of sublistings. According to the Colliers International Office Market Report and Forecast, GTA’s sublease market has grown by 68 per cent since the third quarter of 2008, representing 1.17 million square feet or 11 per cent of the total vacancy.

While weaker market conditions are forecasted across GTA sub-markets over the next 18 months, downtown and the West-end of the city could be impacted the most. This is due to the large scale of construction projects that are about to inject over 5 million square feet of new office space. These two markets also present the highest sublet ratio with 15.9 per cent in GTA West and 14 per cent downtown. About the Report
The Colliers International Semi-Annual Office Market Report & Forecast measures past performance and future trends of the office real estate sector in the Greater Toronto Area. The findings are based on real estate market indicators of Vacancy Rate, Asking Net Rent and Net Absorption. Future trend predictions are drawn from an analysis of the relationships between office market metrics and the economic indicators of Real GDP growth and Office Employment Growth. About Colliers International Colliers Macaulay Nicolls Inc. (CMN), operating as Colliers International, is a leading global real estate services company that provides a full range of services to real estate occupiers, developers and investors worldwide. The organization’s 12,700 employees span the globe in 294 offices in 61 countries. On a worldwide basis, Colliers manages more than 1 billion square feet and has revenue of $1.6 billion. Services include brokerage, property management, hotel investment sales and consulting, corporate services, valuation, consulting and appraisal services, project management, mortgage banking and research. Colliers International is a worldwide affiliation of independently owned and operated companies. Locally, Colliers professionals serve clients throughout the Greater Toronto Area. Find out more at www.colliers.com/toronto.

For further information please contact: Katie Gates/Gal Wilder Cohn & Wolfe Tel: 416-924-5700 Email: katie.gates@cohnwolfe.ca/gal.wilder@cohnwolfe.ca For all the latest international news from Colliers visit www.colliersnews.com. - 30 -