Metro Vancouver office market report

Metro Vancouver office market fundamentals

01. Quality space continues to outperform the market

Metro Vancouver's office market told two different stories this quarter. While overall vacancy increased to 12.2%, driven by a handful of large tenant move-outs and the delivery of available new inventory, the downtown market continued to outperform the broader region. Vacancy dropped 40 basis points (bps) to 14.0% quarter-over-quarter (QoQ), with combined class AAA and A vacancy declining to 11.6% from 12.9% in Q1 2026.

Tenants remain focused on well-improved offices offering strong amenities, convenient transit access and immediate occupancy. As premium options become more limited, it is expected that landlords of top-tier assets will begin to scale back incentives, while owners of class B and C buildings continue to compete aggressively on economics.

02. Creative leasing strategies drive more transactions

Leasing negotiations have become increasingly tailored, with landlords moving away from standardized incentive packages in favour of solutions aligned with each tenant's objectives. For some occupiers, speed to occupancy is the priority, while others place greater value on minimizing upfront capital costs, flexibility or fully improved space. Increasingly, creativity is determining whether transactions get completed.

Flexibility extends beyond pricing, with landlords offering turnkey suites, speculative improvements, free rent and customized construction packages. Institutional owners often prioritize long-term asset value, while private owners may negotiate more aggressively to secure the right tenant. As a result, no two office transactions look exactly alike.

03. Tenant demand grows despite cautious decision-making

This quarter saw stronger leasing activity and more active requirements than in recent quarters. Several larger occupiers continue to evaluate early renewals, relocations, and expansions, pointing to continued momentum in tenant demand.

Despite improving demand, transactions continue to take longer to complete as internal approvals and broader economic uncertainty extend decision timelines. At the same time, many occupiers continue to equate elevated vacancy with abundant choice. In reality, quality space is becoming increasingly competitive. With no downtown office projects under construction, meaningful new supply is not expected until at least 2031. As premium inventory is absorbed, organizations approaching lease expiry may find fewer options than today's vacancy statistics suggest.