Property consultancy Avison Young reports that overall absorption rates in what is Canada’s third-largest city were positive throughout 2010, while vacancy rates in the downtown area were 5.2 per cent at the end of last year.
See examples of flexible office spaces in Vancouver here
Such limited availability leaves businesses in the city with very little room for manoeuvre in expanding their office space, and a number of experts are now urging developers to consider starting work on new office towers.
Supply issues in downtown Vancouver are compounded by the expectation that only slightly more than 100,000 square feet of new office space will be brought to market in 2011, and no new buildings are scheduled for completion in the area before the end of 2014.
Brian Pearson from Avison Young explained: “Large blocks of available contiguous space greater than 25,000 square feet are virtually non-existent.
“Leasing activity exceeded 900,000 square feet in the second half of 2010. However, 13 of the 16 notable transactions we recorded were renewals, which likely reflects the supply constraints prevailing in the downtown office market. Looking forward, current leasing momentum suggests the market will tighten even further in 2011.”
The cost of renting office space in downtown Vancouver is expected to increase slightly over the course of this year and into next, but Avison Young’s analysts are convinced that momentum will gather behind the prospect of new office blocks being added to the city’s skyline over the next few years.
Editor’s notes: In 2015/16, office building vacancy rates reached 11.5 per cent across the region, with downtown Vancouver standing at a vacant rate of 10.5 per cent and the suburbs standing at 14 per cent.
These rates were not as high as they had been in the early 2000s following the bursting of the tech bubble. At that time, the vacancy rate across the whole region was 17 per cent, with downtown Vancouver standing at 14 per cent and the suburbs at 23 per cent.
At the end of 2022, the vacancy rate in downtown Vancouver quadrupled from its pre-pandemic level, and Metro Vancouver’s rate stood at 7.8 per cent, up 1.2 per cent from the previous quarter.
At that time, the vacancy rates were 9.8 per cent for downtown Vancouver and 5.8 per cent for the suburban market.
At the end of the first quarter of 2023, commercial real estate firm CBRE forecasted that the vacancy rate in downtown Vancouver would reach up to 11.6 per cent by the end of 2023.
It stated that the increase would be driven by the largest new office supply cycle completion Vancouver has ever seen, comprising major office building completions from the construction boom that began before the pandemic.
The firm advised that about 800,000 square feet of new office space reached completion in downtown Vancouver in 2021. A further 910,000 square feet reached completion in 2022, and a further 1.82 million square feet was expected to be completed in 2023.
In Quarter 1 of 2023, the gross asking rent was CAD 42.74 per square foot per year.
Research conducted in June 2026 found that JLL had reported in April that Vancouver’s office development pipeline was set to end in 2027, which would create a new supply constraint as leasing momentum was building and vacancy rates were declining.
In the first quarter of the year, overall vacancy rates had reduced to 12.2 per cent, with overall net absorption sitting at 141,000 square feet.
It was observed that availability across the Vancouver metro region decreased from 13.1 per cent to 12.4 per cent following strong leasing activity in the first quarter.
Notable deals in Q1 included Electronic Arts acquiring 175,546 square feet at 2910 Virtual Way in the Vancouver Outlying submarket, and National Bank of Canada renewing its lease of 51,937 square feet at 1040 West Georgia Street in the Downtown Core.
However, only 946,627 square feet of office space was under construction, and the pipeline was effectively ending in 2027, with no completions scheduled beyond that, raising concerns about future availability.
At the end of Q1 2026, the average direct net asking rent across the Vancouver office market was CAD 32.05 per square foot per year, and the average gross asking rent was CAD 53.52 per square foot.