Metro Vancouver office market report

Metro Vancouver office market fundamentals

01. Small and mid-sized tenants re-anchor market activity

Leasing momentum is being driven by small to mid-sized tenants, particularly those seeking spaces between 3,000 and 8,000 square feet. This segment, which has long been a key component of the Vancouver office market, has regained prominence as organizations gain clarity around workplace requirements. The renewed activity reflects delayed decision-making, lease expiries, and growing confidence in defining a “right-sized” office footprint.

This resurgence coincides with the first decline in vacancy in nine quarters, suggesting incremental demand may be starting to outpace absorption losses. Headline deals remain scarce, but steady leasing, particularly among professional services firms, is helping re-establish market balance and reinforcing a cautiously improving outlook.

02. Tenant requirements prioritize function and certainty

Tenant requirements are becoming more defined as occupiers move from uncertainty to execution, with design preferences increasingly shaped by how space is used rather than how much is required. Professional services firms generally favour more structured, office-intensive layouts, while open-plan environments remain associated with tech and coworking users.

Although tech-driven demand has yet to rebound in the Vancouver market, improving fundamentals, including a recent decline in vacancy, support cautious optimism that emerging sectors such as AI will gradually reintroduce demand. As requirements become clearer across sectors, tenants are making more confident, function-driven leasing decisions aligned with long-term operational needs.

03. Inducements remain elevated as the market rebalances

Inducements remain a central component of leasing negotiations, reflecting tenants’ preference for turnkey or near-turnkey solutions. Tenant improvement packages, now at their highest levels on longer-term, well-qualified deals, continue to reduce time, risk, and internal resource strain for occupiers, while allowing landlords to support rental rate levels on their balance sheets and maintain a competitive position within the market.

Inducements remain elevated across much of the market, though there are early indications of greater discipline in how they are being applied, particularly in higher-quality assets with improving absorption. As conditions stabilize, the pace of inducement growth is expected to moderate, pointing toward a gradually more balanced negotiating environment.