Vancouver’s downtown office vacancy rate climbed to 13.1 per cent in the third quarter, reaching its highest level in more than two decades as technology-sector consolidation pushed additional large blocks of space onto the market.
The increase came as the broader Metro Vancouver office market also weakened in the quarter, with overall vacancy rising 0.5 percentage point to 12.2 per cent compared with the second quarter of 2026, according to new data from CBRE Group Inc. released Thursday.
Downtown vacancy rose 0.9 percentage point during the period, while suburban vacancy edged up 0.1 percentage point.
“Two large downtown blocks of future available space were officially vacated this quarter due to consolidation within the technology sector, pushing downtown vacancy to its highest level in over 22 years,” according to the CBRE report.
“It is anticipated that these spaces will take time to absorb and hinges on reduced economic uncertainty, though recent infrastructure announcements may help spur demand more quickly.”
Vancouver’s office market has continued to lag its suburban counterpart, with the downtown vacancy rate now exceeding suburban vacancy for six consecutive quarters. Meanwhile, the gap between higher-quality and lower-quality office space narrowed during the quarter, according to CBRE.
The Vancouver market’s performance stands in contrast to improving office conditions in several other major Canadian markets.
Nationally, office markets recorded two million square feet of net absorption in the third quarter, marking the fifth consecutive quarter of positive net absorption. Nine of 11 markets tracked by CBRE recorded positive absorption, led by Toronto, Calgary and Montreal.
Industrial market shows greater resilience
While Vancouver’s office market faced pressure, Metro Vancouver’s industrial market is showing signs of strengthening.
The region’s industrial availability rate fell 0.3 percentage point quarter over quarter, while the vacancy rate remained unchanged at five per cent. Net absorption reached 1.1 million square feet in the third quarter.
“With trade disputes ongoing, we keep waiting for the other shoe to drop in the industrial market,” said Marc Meehan, research managing director of CBRE Canada, in a statement Thursday.
“Aside from some challenges in Southwestern Ontario, however, the industrial market has performed well in 2026. But in this changeable environment, the past is not prologue.”
Vancouver accounted for 10.9 per cent of new industrial construction starts nationally during the quarter behind Toronto and Montreal, according to CBRE.
The organization said both the sale and leasing markets in Metro Vancouver continue to undergo price adjustments, with many properties transacting at rates significantly below both their original asking prices from a year ago and their current marketed rates.
A total of 414,000 square feet of new supply was delivered during the quarter, nearly all of which was speculative—meaning it was built without a tenant secured in advance—bringing year-to-date deliveries to approximately 1.2 million square feet.
An additional 3.1 million square feet remains under construction, with roughly 1.1 million square feet scheduled for delivery by year-end in Metro Vancouver. Speculative developments represent about half of the space under construction, with more than 400,000 square feet expected for delivery by year-end, according to CBRE.
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