The leased office vacancy rate for downtown Vancouver saw a slight improvement in the second quarter of 2024, dropping slightly to 10.8% from 10.9% in the first quarter of this year, according to commercial real estate firm CBRE.
But there were increased vacancies elsewhere in Metro Vancouver’s office market.
The suburban office vacancy rate (areas outside of the downtown Vancouver peninsula) increased from 7.8% in the first quarter to 8.4% in the second quarter.
Metro Vancouver’s overall office vacancy rate now stands at 9.7% — slightly up from 9.5% in the first quarter. This marks the second consecutive quarter of a rising vacancy rate.
As of the end of the second quarter (late June 2024), over one million sq ft of new office space was under construction, including 1.04 million sq ft in the suburban areas and just 29,000 sq ft in downtown Vancouver.
This follows the completion of 1.15 million sq ft of new office space in downtown Vancouver in the first quarter of 2024, with 1.04 million sq ft absorbed largely due to pre-leased building completions. The completions in the first quarter of the year also marked the conclusion of the years-long office building boom in downtown Vancouver, which first began before the pandemic, resulting in roughly four million sq ft of new office space.
The amount of vacant direct space (leased directly from the property owner/landlord) now stands at 2.5 million sq ft in downtown Vancouver and 1.5 million sq ft in the suburbs, while the amount of vacant sublet space now hovers at 494,000 sq ft in downtown Vancouver and 588,000 sq ft in the suburbs. This represents an overall decrease from the first quarter.
In total, 5.14 million sq ft of office space across Metro Vancouver is currently vacant, out of a total rentable office supply of 53.3 million sq ft across the region, with more than half of the regional rental office supply situated within downtown Vancouver. This only accounts for the status of a space’s lease agreements, not actual spatial use.
CBRE also notes that there is growing interest in office conversions to other uses with some new developments shifting mid-construction to either residential or hotel uses.
Although these statistics represent challenging office market conditions, downtown Vancouver and Metro Vancouver as a whole remain the tightest office market among major urban centres in Canada and the United States. A healthy office vacancy rate for a market is generally considered to be between 4% and 8%.
Here is how Metro Vancouver’s office market compares with other major Canadian urban regions, according to CBRE’s calculations as of the second quarter of 2024:
- Vancouver
- Downtown: 10.8%
- Suburban: 8.4%
- Regional: 9.7%
- Ottawa
- Downtown: 14.0%
- Suburban: 10.1%
- Regional: 11.8%
- Halifax
- Downtown: 18.1%
- Suburban: 10.5%
- Regional: 13.6%
- Waterloo
- Downtown: 24.4%
- Suburban: 9.4%
- Regional: 13.9%
- Winnipeg
- Downtown: 18.6%
- Suburban: 10.3%
- Regional: 16.3%
- Montreal
- Downtown: 17.4%
- Suburban: 20.7%
- Regional: 18.8%
- Toronto
- Downtown: 18.1%
- Suburban: 21.0%
- Regional: 19.4%
- Edmonton
- Downtown: 22.3%
- Suburban: 17.9%
- Regional: 20.6%
- London
- Downtown: 30.4%
- Suburban: 10.6%
- Regional: 25.3%
- Calgary
- Downtown: 30.3%
- Suburban: 23.7%
- Regional: 27.8%