Downtown Vancouver office vacancy rises sharply in final quarter of 2022 but remains lowest in Canada: report

CBRE chalks up much of Vancouver's rising rate to two new buildings that aren't fully leased.

Vancouver office vacancy

Credit: The new Stack development in Coal Harbour represents a large amount of office space that hasn’t yet been leased

CBRE chalks up much of Vancouver’s rising rate to two new buildings that aren’t fully leased

The national office market saved its worst for last in reporting its weakest quarter in the final one of 2022, according to a report from global real estate firm CBRE. After the pandemic initially cratered the market for years, some hope was starting to emerge, particularly after a 2022 third quarter in which overall office vacancy decreased to 16.4 percent—a first since the onset of the pandemic.  

Alas, it was not to be. CBRE reported today that the national office vacancy percentage took a turn back up to 17.1 percent. That carried with it a whopping negative 2.1 million sq. ft. of net absorption.  

Vancouver wasn’t immune to those rises as the city’s downtown saw a per quarter increase of more than 2 percent, all the way up to 9.8 percent. It was a bit of a different story in Metro Vancouver as a whole though, which came in at 5.8 percent. 

In the always packed Vancouver industrial market, vacant space actually rose up to 1.2 percent, something that CBRE calls a “welcome change.”  

The company also has a viable explanation for why the downtown’s vacancy supply has increased so much, as two large developments recently hit the market in The Stack and Vancouver Centre II, both of which aren’t yet fully leased. According to the report, an additional 1.9 million square feet is expected to hit downtown next year, but over 90 percent of it is pre-leased.  

In any case, Vancouver’s struggles post-pandemic are nothing compared to the rest of the country. Overall, Calgary is dealing with 30-percent office vacancy, the highest of the cities studied. Toronto (16.2 percent) and Montreal (17 percent) are still far behind Vancouver’s 7.8 percent, while Ottawa is the next closest at 11.1 percent.