Vancouver's downtown office vacancy rate has finally fallen
Vancouver’s downtown office vacancy rate dropped slightly in the first quarter of 2026, with 48,734 sq. ft. of office space absorbed in the first three months of the year.
According to a report on Canadian office leasing by commercial real estate firm CBRE, empty office space hit 12.3 per cent, down from 12.8 per cent the quarter before, which had been the highest since the pandemic.
“To date, the office recovery has largely been a Toronto story, but Q1 was the quarter where tenant demand appears to be beginning to spread to other cities and beyond trophy buildings,” said Marc Meehan, CBRE Canada Research Managing Director, in a statement.
Metro Vancouver as a whole saw a quarter-over-quarter decline, bringing it down to 10.8 per cent across the region. While this decline happened in both suburban and downtown core markets, it fell the most in suburban areas, down to 9.1 per cent.
The gap is growing between newer, premium office buildings (like space in some of the recently completed projects) and older office buildings. The newer, premium office vacancy rates declined to 8.4 per cent, while older office rates increased to 18 per cent.
To attract tenants, landlords have been offering perks including lower rents, rent-free periods, and more flexible lease terms.
This trend is in line with the market forecast report that CBRE released in February of this year, predicting that Vancouver’s vacancy would ease in 2026 due to a lack of office construction colliding with a rebound in leasing demand.
At the time, they noted that the amount of leasing activity had doubled year-over-year, a sign that possible tenants are exploring the favourable leasing options.
Due to the limited supply downtown and the growing interest, CRBE expects office vacancy rates to decline throughout the year.
The nationwide downtown office vacancy rate is at 18.2 per cent, due to growing return-to-office expectations. Toronto continues to lead the way, with 1.9 million sq. ft of net absorption in Q1 of 2026, dropping the city’s vacancy rate to 14.4 per cent.
More office space potentially on the way
While the most recent office building boom ended with the 2023 and 2024 completions of the Bosa Waterfront Centre office tower, The Stack office tower, and the B6 office tower, more could be on the way in the years to come.
At the beginning of the year, Cadillac Fairview made another attempt to proceed with an office tower property on its Waterfront Station property, proposing a 22-storey tower with office space on 20 storeys. This is the first major office tower proposed in years, due to the high vacancies from the pandemic. The City of Vancouver is expected to decide on this proposal in May 2026.
In early 2020, before the pandemic, downtown Vancouver’s vacancy rate was at about two per cent.
With files from Kenneth Chan