Market Report: Q1 2026 Vancouver Office Top Highlights
What happened last quarter? Here is what you need to know!
- Suburban markets show strength
- Flight to quality continues to drive downtown market
- What is driving leasing activity?
Across Metro Vancouver, the market is still facing headwinds, but it is stabilizing with signs of optimism. Vacancy rates remain elevated in the double digits but have stabilized over the last several quarters. Tenant reshufflings, small-tenant activity, weak large-deal momentum, and the flight to quality are leading to fluctuating vacancy rates. And as with previous market reporting, the market continues to bifurcate between suburban vs. downtown, Class AAA vs. B&C, and small vs. large tenants.
Big Transactions in Metro Vancouver This Quarter:
Amazon to vacate 160k sqft, Ascenda School of Management leases 3 floors at Deloitte Summit, and Crypto firm, LayerZero, takes on large new lease.
Amazon: Amazon’s lease of nearly 150,000 sqft at Telus Garden will come to an end in June 2026 as they are consolidating their space into The Post on West Georgia. Nearly 1,000 employees will be moving across the street in the process, adding a significant block of Class AAA space to the downtown core. This will offer a great opportunity for tenants looking to upgrade.
Ascenda School of Management: Downtown Vancouver has experienced significant contraction among higher education tenants because of federal government restrictions to the international student program. However, this quarter, Ascenda School of Management bucked the trend with a new 49,105 sq. ft. lease at 400 West Georgia Street, representing a notable instance of continued leasing activity within the sector.
LayerZero: LayerZero, a blockchain infrastructure company, lsigned a 32,365 SF lease at 1021 West Hastings - one of the larger instances of net-new demand this quarter, highlighting continued - albeit selective - activity from emerging technology firms.
Suburban markets show strength
“The suburban markets continue to outperform, posting positive absorption and lower vacancy levels.”
- Colliers
Market watchers this quarter all noted the strength of the suburban market relative to downtown, with government and technology tenants driving demand in the suburbs.
CBRE noted that the suburban market continues to outperform the downtown core, with four consecutive quarters of lower suburban vacancy.
And Colliers is expecting the Suburban markets to continue performing well with stable tenant demand.
Market watchers noted suburban vacancy fell to 9.1% (CBRE), and 6.4% (Colliers), with downtown still showing double-digit vacancy rates.
Flight to quality continues to drive the downtown market
In recent years, market watchers have emphasised the flight to quality in commercial real estate, as tenants are prioritizing Class AAA buildings to encourage a robust return to work.
This quarter was no exception, with four consecutive quarters of increasing divergence between Class AAA & A, and Class B&C vacancies.
According to CBRE, Metro Vancouver’s Class B & C’s vacancy is now at 18%, and Class AAA & A is now 8.4%. Colliers also noted that AAA full-floor opportunities had the strongest demand for Q1 2026.
“This sustained “flight to quality” dynamic continues to benefit well-located and amenitized assets, while placing ongoing pressure on lower-tier buildings.”
- NAI Commercial
NAI Commercial specifically noted that there is now increased pressure on Class B & C amenities to improve offerings and amenities, leasing activity this quarter was heavily dependent on tenant relocations and upgrading to higher class buildings.
The flight to quality is driving activity across Metro Vancouver, with Colliers referring to it as “Class B Churn,” as tenants in Class B continue to upgrade, leaving a steady supply of second-generation space, placing vacancy pressure downward.
What is driving leasing demand this quarter?
“Leasing activity remains active but is increasingly driven by tenant relocation and upgrading rather than net new expansion.”
- NAI Commercial
Leasing activity in the Vancouver office market remains active but is increasingly driven by structural churn rather than expansion-led demand.
All market watchers noted improved leasing activity this quarter. CBRE and NAI Commercial called Vancouver’s downtown office market “resilient,” and CBRE highlighted that gross leasing activity downtown is a very positive sign. Cushman & Wakefield highlighted the “rebound” in leasing activity this quarter.
However, it is important to narrow down what and who is driving leasing activity. Rather than a strong and robust market recovery or new market entrants, it is tenant reshufflings, right-sizing, and flight to quality driving leasing activity.
As NAI Commercial noted, “Leasing activity continues to be driven primarily by tenants upgrading into higher-quality space rather than expanding.”
And Cushman & Wakefield also noted that “tenant demand remains stable, driven primarily by internal company growth rather than new market entrants.”
Collectively, these dynamics point to a market where activity is sustained by relocations, upgrading, and lease-cycle-driven decisions, rather than net new expansion demand.
Avison Young also noted that headline deals remain scarce and leasing momentum is being driven by small to mid-sized tenants right-sizing their footprint.
In total, the Vancouver office market is currently characterized by steady but fragmented leasing activity, with demand driven by right-sizing, relocations, and smaller occupiers, while large expansion-driven “headline deals” remain absent.
