Amazon will add 79,000 square feet of space to one of its Toronto offices by November and plans to open the North Tower of its Vancouver office complex in 2026, the company announced Thursday afternoon.

The tech giant made the reveals as it opened a 43,000-square-foot atrium at its flagship office building The Post in Vancouver, and launched its first high-tech Just Walk Out store in its YYZ14 office at 120 Bremner Blvd. in Toronto.

The expansion will take place at its YYZ18 office at 18 York St. in Toronto, where three new floors will be opened. Across Amazon’s three Toronto offices the company currently occupies approximately 500,000 square feet of space (excluding the upcoming expansion). It provides employment for approximately 3,500 staff members.

The Post has 1.1 million square feet of office space across its 21-floor South Tower and 22-floor North Tower linked by the just-opened atrium. Over 4,500 of Amazon’s employees work in The Post, where Amazon is the sole corporate tenant. The South Tower was opened earlier this year.

“Our investment in The Post reflects Amazon’s continued commitment to our Vancouver Tech Hub,” Jesse Dougherty, Amazon’s vice president, said in the announcement. “This new space will be an ideal location for our teams to gather and invent on behalf of customers.”

The Post’s atrium

The atrium at The Post is designed to feature collaboration spaces for Amazon employees with break-out areas, meeting rooms, a cafe and an event venue. B+H Architects designed the atrium, with QuadReal Property Group as its developer and manager.

Amazon emphasized the sustainability of The Post: a waste heat recovery system, passive solar shading, an energy-efficient envelope and light shelves that reflect daylight into the interior. The building is on track to acquire LEED Gold certification, Amazon states.

Approximately 25,000 tons of carbon was saved and “significant construction waste from local landfills” was diverted by reusing the building’s existing central podium, the company said.

Just Walk Out shopping in Toronto

As in Vancouver, Amazon is also partnered with QuadReal in Toronto. The YYZ14 and YYZ18 offices are located in QuadReal’s Southcore Financial Centre; the YYZ16 office is in Scotia Plaza, which is owned by Kingsett Capital and AIMCo.

Amazon’s Just Walk Out shopping allows customers entering the store to link their credit card, then a mix of artificial intelligence and sensors underpinning the system checks whether items are taken or returned to shelves. Customers leave without transacting at the traditional check-out line, and are automatically charged for the items they exit the store with.

Amazon will be rolling out its Just Walk Out shopping at YYZ14 for its employees and at YYZ18 later this year. Just Walk Out is already used at the Scotiabank Arena, Toronto Pearson International Airport and the Scotiabank Saddledome in Calgary among other Canadian and global locations.

Amazon expands offices despite office vacancies rising

Amazon looks to add more space as office vacancies in Toronto and Vancouver consider to be elevated due to corporate remote work policies.

Newmark’s 2Q '24 Downtown Toronto Office Market Overview showed a 14.6 per cent vacancy rate in downtown Toronto during the quarter – a 24-year high. Avison Young showed similar data in its Q2 Greater Toronto office market report: vacancy rising to 14 per cent and availability at 20.2 per cent.

In Toronto, deliveries of new supply, the office real estate cycle, technology changing how tenants use office space, work-from-home policies and the COVID pandemic raised vacancy from pre-pandemic lows.

Downtown Vancouver’s office market had Q2 vacancy at 16.1 per cent, according to NAI Commercial’s Metro Vancouver Office Market Report Q2 2024. The high cost of construction and financing hurt the financial viability of some office projects, Rob DesBrisay, managing partner of NAI Commercial, told RENX in July.

“If you look at office across North America, investors are no longer keen on office. Nobody is looking to weigh heavier in office investment right now,” he said.

Colliers forecasts Canada’s office vacancy rate to reach a ceiling of 15 per cent by the end of Q2 2025.