Downtown Vancouver office space vacancy rate sees notable increase | Daily Hive

Bentall Centre office towers in downtown Vancouver. (Hudson Pacific Properties)

Metro Vancouver as a whole saw an uptick in its leased office vacancy rate, and its major submarket of downtown Vancouver was no exception.

According to CBRE’s new bulletin for activity in the second quarter of 2025, there was a 0.2 per cent increase in the vacancy rate region-wide, from 10.7 per cent in the first quarter to 10.9 per cent in the second quarter.

You might also like:

Disney opens Industrial Light and Magic's largest studio at The Stack tower in Vancouver
New 825,000 sq. ft. logistics hub is Amazon's largest warehouse in Metro Vancouver
Amazon opens major office atrium as part of its phased growth within The Post complex in Vancouver through 2026
Sony Pictures Imageworks to relocate global headquarters office to The Post
Former Nordstrom store in downtown Vancouver to be subdivided into four retail units

The vacancies in downtown Vancouver, where over half of the region’s leased office space supply is located, saw a markedly higher increase of 1.2 per cent from 10.7 per cent to 11.9 per cent. This is largely due to nearly 100,000 sq. ft. of premium Class AAA sublet space being reintroduced into the market, mainly from an education provider releasing its space — possibly a reflection of the federal government’s recent changes to immigration levels, especially the number of international students.

This brings the city centre’s vacancy rate back to approximately the same levels that were seen in the third quarters of 2023 and 2024, which marked the highest vacancy rates since the start of the pandemic.

Downtown Vancouver’s office vacancy trends continue to reflect the post-pandemic “flight to quality,” with vacancies for premium Class AAA and Class A spaces rising by one per cent to 9.6 per cent, while lower-calibre Class B and Class C spaces saw a larger increase of 1.3 per cent to 15.2 per cent.

But the vacancy rate for the suburban market (all areas in Metro Vancouver outside of the downtown Vancouver peninsula) saw a contraction, falling by 0.9 per cent from 10.8 per cent to 9.9 per cent.

Currently, there is 583,000 sq. ft. of new office space under construction in Metro Vancouver, with 50 per cent of this space pre-leased. Just 29,000 sq. ft. of this space under construction is situated in downtown Vancouver.

Downtown Vancouver and Metro Vancouver as a whole continue to hold the distinction of being Canada’s tightest office markets at both the city and regional levels — a trend that has persisted since before the pandemic. However, for the second quarter, the markets in Vancouver, Calgary, and Toronto saw the largest amount of office space returning to the market. Moreover, in the most recent quarter, Montreal and Edmonton led the country in net office leasing.

“[Office] leasing momentum, which had been building steadily, is clearly being impacted by economic uncertainty and rising job losses,” said CBRE Canada chairman Paul Morassutti in a statement.

As for Metro Vancouver’s leased industrial space market, the second quarter saw the vacancy rate increasing to 5.1 per cent driven by the new large availabilities of over 50,000 sq. ft. The number of industrial space listings over 50,000 sq. ft. now totals 55 locations.

Although the industrial space market has seen improved conditions from the previously exceedingly tight rates below one per cent, average asking leasing rates are still increasing, but not as aggressively as before.

The second quarter saw 755,000 sq. ft. of new industrial space completions. Another 4.2 million sq. ft. is still under construction, with 2.9 million sq. ft. set to reach completion by the end of 2025. About half of this new inventory is “built-to-suit” and will not impact market availability.

“You don’t need a canary in a coal mine — you just need to watch the news to understand why the industrial market is slowing,” continued Morassutti.

“That said, the industrial market continues to right-size after the pandemic-induced logistics rush, and tariffs or no tariffs, speculative construction is going to be one of the biggest contributors to rising availability through 2026.”

You might also like: