Canada’s office market has softened in the past year, while the U.S. market is picking up, says a report by Avison Young.

Despite rising from 8% in 2013, Canada’s average vacancy of 9.2% shows the ongoing health of the market. That’s better than the U.S., which has a rate of 13.5%. The gap between these two rates has narrowed during the past year, as the American rate was previously 14.2%.

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“As we have seen with industrial markets, quite a bit of momentum is building in the U.S., as increasing demand from tenants and falling vacancy rates have led to a substantial increase in new development,” says Mark E. Rose, chair and CEO of Avison Young. “Construction is partially being driven by tenant demand for modern, efficient workspaces that are in transit-served and mixed-use environments.”

More office jobs in the U.S. is buoying confidence in the leasing and investment sectors, leading to rising rental rates.

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“Some Canadian markets have had the wind taken out of their sails lately, but an uptick in cross-border activity could help rectify the imbalance between supply and demand that some markets are witnessing, as considerable levels of new supply are scheduled for delivery over the next several years,” says Rose.

The report shows that more than 83 million square feet (msf) were under construction across Canada and the U.S. at mid-year 2014, up from 66 msf a year prior. In Canada, downtown areas account for roughly two-thirds of construction activity, whereas in the U.S., approximately 61% is focused in the suburbs.

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“North America’s office markets are well-positioned to show further growth for the remainder of the year and into 2015,” says Rose.

According to the report, of the 39 office markets tracked by Avison Young across North America, 23 markets saw vacancy rates in the past 12 months.

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