Vancouver Office Market Report
Metro Vancouver remained one of the tightest office markets in North America at mid-2025 as vacancy and availability remained largely stable with no new downtown development underway and limited new supply in the pipeline. Tightening vacancy in the suburban markets, particularly Burnaby and Surrey, combined with near record lows in the smaller suburban markets offset increased vacancy in all three of Vancouver’s urban office submarkets. A disconnect between tenants’ class A/B pricing expectations downtown and the overhead such buildings command in the suburbs may contribute to tenants exploring quality options more central to employees. Class A vacancy has stabilized at ~10% as the bifurcation of the best from the rest during the well-documented flight to quality downtown reveals a segment of class A space that may not be viewed as favourably. Office leasing decisions require clarity on long-term business needs. The potential impact of U.S. tariffs has injected significant uncertainty. As a result, some occupiers paused leasing decisions in 2Q25. Regional absorption of more than 320k sf in first half of 2025, led by Burnaby (135k), the Tri-Cities (55k), Richmond (52k), Surrey (46k), the North Shore (34k) and New Westminster (27k), demonstrated substantial suburban demand. New construction remained largely at a standstill in Downtown Vancouver at mid-2025, which continued to contribute to the rising risk of a shortage of class A space in the late 2020s given development timelines. While achievable office rents downtown will likely play a larger role in determining when new construction kicks off, demand downtown needs to improve notably to provide the confidence needed to support the first new tower of the next development cycle. News that lululemon will lease the 290,000-sf former downtown home of Microsoft and Sony Imageworks at 725 Granville Street marks one of the largest downtown deals done since Amazon confirmed its prelease of the Post’s second phase in 2022.
Download Vancouver Office Market Report 2Q25Vancouver Industrial Market Report
GVA industrial vacancy rose to 3.1% at mid-2025, which was the highest level of vacancy recorded in the GVA since 2015. Vacancy has been on the rise since the end of 2021. Negative absorption of ~438k sf in the first half of 2025 was an improvement on the negative absorption of ~1.5 msf in the first half of 2024 but the Q2 2025 drop in demand was offset by solid Q1. Sublease space availability climbed to ~2.4 msf at mid-2025, which marked the highest amount recorded since 2008 when research coverage of the region was initiated. GVA industrial leasing market activity had gained momentum through the end of 2024 and to start 2025, but uncertainty related to U.S. tariff threats seems to have ended that in Q2 2025. Maple Ridge-Pitt Meadows had the highest industrial vacancy in the GVA at 4.2%, followed by the Fraser Valley (3.9%) and Vancouver and the Tri-Cities, both at 3.7%. The North Shore (1.5%) was the lowest followed by Richmond (2.4%). The prolonged uncertainty generated by the constantly shifting threats of U.S. tariffs and their subsequent economic impact has led some businesses and investors to move forward while others delay, cancel or modify investment decisions. Overall sales and leasing activity were muted in the first half of 2025 while those submarkets with businesses that faced greater exposure to trade-related activities tended to record higher vacancy and sublease availability than others. Industrial strata sale proceeds of ~C$369M at mid-2025 is the lowest first-half total since 2020 in terms of overall dollar volume. This was due to second-quarter dollar volume of ~C$103M, the lowest quarterly strata investment since Q1 2019. GVA industrial sale proceeds of ~C$395M in the first half of 2025 (not including strata) was the lowest first-half investment total since at least 2015 with quarterly industrial sales by dollar volume in steep decline since the third quarter of 2024.
