Vancouver’s Office Market: Resilience in a Shifting Tide
A deep-dive into Metro Vancouver’s commercial real estate landscape — Q1 2026 Edition
8.1%Vacancy Rate
683KSF Delivered (12 Mo)
373KNet Absorption SF
$47.35Avg Asking Rent/SF
By Abhishek Mamgain, Managing Broker — Urban TeamSource: CoStar Group · Report Date: June 3, 2026
Metro Vancouver’s office market has carried forward the resilience it built in 2025, entering 2026 with solid leasing momentum, stabilizing vacancy, and a growing chorus of major employers calling workers back to the office. Yet beneath the surface, a more complex picture is forming — one shaped by employment contraction, persistent hybrid work habits, and a wave of sublease space that may test the market’s equilibrium in the years ahead.
Market Overview
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A Market Holding Its Own For Now office property for sale
Total leasing activity across Metro Vancouver reached 3.7 million SF in 2025, placing it at the top end of the 2.7–3.7 million SF range recorded over the prior five years. That momentum carried into early 2026, with Q1 leasing totalling 1.0 million SF and generating approximately 50,000 SF of positive net absorption — enough to nudge the overall vacancy rate down to 8.1%.
When smaller and non-market buildings (government, education) are excluded, vacancy climbs to 9.3%, and market-wide availability sits at roughly 11%. Downtown Vancouver’s vacancy stands at 13%, while suburban markets remain notably tighter at 6.3% — a bifurcation that continues to define the region’s performance.
9.2M SFTotal available office space across Metro Vancouver
1.4M SFSublease inventory currently available
1.2M SFUnder construction across the region
1.6%Market asking rent growth year-over-year
Leasing Activity
Premium Buildings Win the Race for Tenants
The flight-to-quality trend is firmly entrenched. Over the past 12 months, 4 & 5 Star buildings captured 60% of all leasing volume — including renewals — up from 50% in 2024 and just 45% before the pandemic. Tenants are prioritizing amenity-rich, modern spaces as they right-size their footprints, even as the premium segment grapples with pockets of availability in newer towers and a persistent sublet market.
The largest lease of the period was Lululemon Athletica’s 289,557 SF commitment at CF Pacific Centre in Q3 2025, followed by Electronic Arts securing 175,546 SF at Broadway Tech Centre in Q1 2026. These blockbuster deals contrast with the broader reality: Vancouver’s office market is fundamentally a small-tenant market, with average deal sizes of just 4,500 SF — up roughly 10% year-over-year, but still modest.
“Many major tenants have already optimized their footprints in prior years and, given elevated construction and fit-out costs, are opting to renew rather than relocate.”
Renewal activity reflects cautious market sentiment. Notable recent renewals include Ledcor’s 61,000 SF at 1055 W Hastings, Gowling WLG’s 47,000 SF at Bentall Five, and Technical Safety BC’s 40,500 SF at Renfrew Centre. This pattern is expected to persist through 2027 as fit-out costs remain elevated and relocation options are limited.
Top Leases of the Past 12 Months
- Lululemon Athletica — 289,557 SF at CF Pacific Centre, Downtown Vancouver (Q3 2025)
- Electronic Arts — 175,546 SF at Broadway Tech Centre (Q1 2026)
- Teck Resources — 65,292 SF at Bentall Centre Three (Q3 2025)
- City of Vancouver — 51,608 SF at 1125 Howe St (Q1 2026)
- Acsenda School of Management — 49,105 SF at Deloitte Summit (Q4 2025)
- Infosys — 49,004 SF at Broadway Tech Centre (Q4 2025)
- Mastercard — 41,323 SF at The Exchange (Q3 2025, renewal)
Rent Trends
Rents Inch Higher — But the Real Story Is in the Incentives
Market asking rents have risen modestly, growing 1.6% over the past year to an average of $47.35/SF gross. Vancouver maintains a meaningful 25% premium over the national average of $37/SF, driven by the scarcity of high-quality space relative to other Canadian cities.
| Building Class | Vacancy Rate | Asking Rent (Gross) | 12-Mo Rent Growth |
|---|---|---|---|
| 4 & 5 Star | 8.7% | $57.26/SF | +3.4% |
| 3 Star | 7.9% | $40.32/SF | –0.5% |
| 1 & 2 Star | 6.0% | $35.17/SF | +0.7% |
| Market Overall | 8.1% | $47.35/SF | +1.6% |
However, asking rents tell only part of the story. Tenant inducements — including free rent periods, tenant improvement allowances, and fit-out contributions — have surged to roughly $75–$100/SF in most submarkets, and as high as $200/SF in Downtown. Industry sources confirm that these concessions are approximately double pre-pandemic levels, with some landlords reporting that net effective rents have fallen up to 50% below face rates.
The result is a market in which headline rents appear stable, but actual economics have shifted significantly toward tenants — particularly those in well-located, high-quality buildings with negotiating leverage.
Construction & Supply
The Development Pipeline Is Winding Down
Approximately 1.2 million SF of office space is currently under construction across Metro Vancouver — equal to 1.3% of total inventory, above the national average of 0.6%, but a fraction of the record deliveries seen in 2023 (3.3M SF). Crucially, 87.6% of space under construction is already pre-leased, meaning limited speculative supply is entering the market.
Key projects completing in 2026 include the Oakridge development (300,000+ SF of office-condo inventory), AbCellera’s purpose-built facility at 110 W 4th Ave (220,000 SF), and The Hive at 2150 Keith Drive (164,000 SF). There are no new Downtown Vancouver office towers under active construction, and brokers do not expect any new starts before 2028 or 2029.
| Submarket | Under Constr. (SF) | Pre-Leased % |
|---|---|---|
| City of Vancouver (Non-Core) | 435,000 | 76.7% |
| Broadway Corridor | 384,000 | 100% |
| Surrey / Langley | 217,000 | 96.2% |
| North Shore | 97,000 | 100% |
| Downtown Vancouver | 49,000 | 100% |
| Richmond / Delta | 42,000 | 0% |
Since 2020, Metro Vancouver’s office footprint has expanded by 7.5%, driven primarily by Downtown Vancouver and the Surrey/Langley submarkets — both posting double-digit inventory growth. But with developers increasingly pivoting toward residential and hospitality projects, the next wave of office delivery will be embedded in mixed-use developments rather than standalone towers.
Investment Sales
A Record Year for Sales Led by One Historic Transaction
Vancouver’s office investment market recorded $2.4 billion in activity over the past 12 months — approximately 35% of Canada’s total office investment volume. The headline figure was dominated by the $1.009 billion sale of The Post (349 W Georgia St), the largest single office transaction in the city’s history. The two-tower Amazon-anchored complex transacted at $734–$870/SF, with both towers at 0% vacancy at the time of sale.
Excluding The Post, investment volumes tracked closely with the trailing five-year average of roughly $1.1 billion — reflecting a market where institutional owners remain selective sellers. A notable portfolio transaction was Oxford Properties’ acquisition of a 50% interest in eight top-tier office buildings in Calgary and Vancouver (including the Marine Building, MNP Tower, Guinness Tower, and The Stack) from CPP Investments, valuing Vancouver assets at approximately $660/SF.
Recent Significant Sales (Past 12 Months)
- The Post, South Tower (349 W Georgia) — $572M · $734/SF · Nov 2025
- The Post, North Tower (349 W Georgia) — $437M · $870/SF · Nov 2025
- Oceanic Plaza (1066 W Hastings) — $246M · $700/SF · Jan 2026
- The Stack (1133 Melville St) — $203M · $733/SF · Jun 2025
- 700 & 750 W Pender (Kingsett acquisition) — $125M · $427/SF · Aug 2025
- 4333 Still Creek Dr, Burnaby (Fortinet) — $33M · $449/SF · Jul 2025
Mid-tier pricing has reset materially. Compared to Sunnyland Group’s 2021 acquisition of 888 Dunsmuir and 625 Howe for $940/SF, recent 3 Star trades at $427–$450/SF imply a 40–50% decline in mid-tier office valuations over four years. Cap rates on core assets are now expected to settle in the 5.5%–7.0% range — approximately 150–200 basis points above pandemic-era peaks.
Economic Context
Headwinds from Employment and Population Trends
Despite the leasing activity, the economic backdrop for Vancouver’s office market carries meaningful risks. Office-using employment has declined 3.6% year-over-year as of April 2026, with losses concentrated in finance, insurance and real estate (–9.7%) and business and support services (–8.7%) — sectors that together represent roughly 37% of office-using employment.
Technology hiring, which had shown early 2026 momentum, has since faded and remains approximately 20% below early-2024 levels, with Oxford Economics projecting a slow recovery in the near term. Total employment across all sectors in Metro Vancouver is currently down 1.6% year-over-year.
On the demographic front, Vancouver is projected to experience a population decline for the first time in recorded history in 2026, driven by revised national immigration targets and elevated living costs. GDP growth for 2025 came in at 2.1%, with a forecast downward revision to 1.5% for 2026.
Despite these pressures, Vancouver’s economy remains structurally diversified — spanning natural resources, finance, film, tourism, and international trade through Canada’s largest and busiest port. Healthcare investment (nearly $9 billion in active projects across five municipalities) is adding employment resilience, and two major SkyTrain extensions (Broadway Corridor and Surrey–Langley) are underway at a combined cost of $9 billion.
Submarket Snapshot
Not All Submarkets Are Created Equal
The divergence between Vancouver’s submarkets is one of the defining features of the current cycle. Downtown Vancouver, the largest submarket at 34.7M SF (36% of total inventory), carries the highest vacancy at 12.2% and the highest asking rent at $55.68/SF — a reflection of elevated sublease inventory and Amazon’s ongoing footprint reduction in the core.
Suburban markets are performing considerably better. Abbotsford/Chilliwack posts the lowest vacancy at 2.2%, while Surrey/Langley — the region’s fastest-growing submarket — has 13.7% of total inventory and leads in 12-month rent growth at 2.0%. The Broadway Corridor, a major growth corridor anchored by the new SkyTrain extension, has 384,000 SF under construction at 100% pre-leased — underscoring the structural demand for well-located mixed-use office nodes.
| Submarket | Vacancy | Asking Rent/SF | 12-Mo Rent Growth |
|---|---|---|---|
| Downtown Vancouver | 12.2% | $55.68 | +1.9% |
| Broadway Corridor | 7.8% | $47.84 | +1.5% |
| Burnaby | 5.8% | $43.84 | +1.7% |
| Surrey / Langley | 5.8% | $43.34 | +2.0% |
| City of Vancouver (Non-Core) | 5.9% | $42.63 | +1.6% |
| Richmond / Delta | 6.9% | $36.32 | 0.0% |
| Abbotsford / Chilliwack | 2.2% | $33.02 | –0.9% |
Market Outlook: Stabilization, Then a Slow Recovery
The Vancouver office market appears to be approaching an inflection point. Vacancy peaked at 8.4% in Q3 2025 and is now gently declining. As the construction pipeline winds down and no new Downtown towers are expected before 2028–2029, supply pressure should ease materially over the next two to three years.
The primary risk remains on the demand side. Sublease inventory of 1.4 million SF is elevated, and between 40–50% of it is expected to revert to landlord control within 24–30 months — adding to effective availability even as new supply slows. Employment contraction in office-using sectors, particularly finance and tech, will moderate the pace of recovery.
Return-to-office mandates from major employers — Amazon, Canaccord Genuity, and the City of Vancouver among them — provide a meaningful tailwind. If the labour market stabilizes and larger tenants begin making long-term commitments again, Class A buildings and well-located suburban assets are best positioned to outperform. For investors, the current repricing environment — with cap rates now in the 5.5–7.0% range — may represent the best entry point the market has offered in a decade.
Bottom line: Vancouver’s office market is not in distress — but it is navigating a complex transition. Those who understand its nuances, act decisively on well-priced assets, and lean into the flight-to-quality trend are likely to be rewarded as the cycle turns.
