Vancouver Office Market Report
Metro Vancouver remained one of the tightest office markets in North America in early 2024 thanks to low vacancy in the suburbs and a lack of new supply outside the core. Delivery of new supply in the Downtown market from 2021 to 2023 contributed notably to a historic rise in vacancy but also obscured the superior performance of class A assets. Class A office vacancy had either stabilized or declined at the end of the first quarter of 2024 in virtually all Metro Vancouver markets and submarkets. Annual absorption was positive in the Downtown, Broadway Corridor and Vancouver Periphery submarkets in 2023, while most suburban markets flipped negative, many for the first time since 2020. Total square footage of class B/C office space leased in Downtown Vancouver peaked in 2017 and has been in decline ever since, accelerating notably starting in 2020. New construction remained largely at a standstill in Downtown Vancouver, which poses the risk of a potential shortage of class A space in the late 2020s given development timelines. Achievable office rents downtown are increasingly likely to play a larger role in determining when new construction kicks off as opposed to attempts to model vacancy/demand. All the fundamentals that made Downtown Vancouver an attractive office market prior to COVID-19 remain in place with more current opportunities than have been present in almost a decade. Quality supply will likely be a growing issue moving forward as tenants’ evolving needs are not being met in the many obsolete class B/C buildings that continue to populate the market.
Download Vancouver Office Market Report 1Q24
