Market Report: Q2 2026 Vancouver Office Top Highlights
What happened last quarter? Here is what you need to know!
- Downtown sublease market stabilizing.
- Steady as she goes – steady demand despite some softening conditions.
- Asking rents dropping.
- What's happening downtown?
Vancouver’s office market for Q2 of 2026 could be defined by mixed signals, but still stable and showing important signs of improvement.
There were slightly rising vacancy rates and slowed leasing activity, yet steady and continued demand for well-located, high-quality space despite more selective occupier decision-making.
However, a limited construction pipeline combined with steady demand means that we may be reaching the peak for elevated vacancy rates.
Nonetheless, there were several signs of optimism, including declining sublease activity, steady demand despite softer leasing volumes, and continued demand for premium space. But as elevated vacancies persisted and continued to tick up this quarter, asking rents have begun to fall.
Big Transactions in Metro Vancouver This Quarter:
Engineering, energy and professional services – what does it mean for our local economy?
Fluor Canada: Fluor, a leading engineering and construction firm, has leased 22,000 sqft at the Stack, representing a significant footprint in Vancouver, BC.
BBA Consultants: BBA, an engineering and environmental assessment firm, renewed a large 22,000 sqft lease at 1050 West Pender.
Innergex Renewable Energy Inc: Innergex, a renewable energy firm, renewed approximately 16,000 sqft of space at 888 Dunsmuir.
Engineering, energy and professional services firms were active in Q2 2026, with several notable new commitments and renewals in Downtown Vancouver. Despite softer overall leasing activity, Fluor Canada, BBA Consultants and Innergex Renewable Energy’s decisions to establish or maintain significant office footprints are positive indicators of continued business confidence.
The activity may also reflect broader momentum in sectors tied to energy, infrastructure, mining and economic growth.
Downtown Sublease Market Stabilizing.
Previous market reports noted elevated subleasing activity in Vancouver at the height of post-COVID market challenges. This was generally a sign of market distress as companies were offloading space and reconsidering their priorities.
However, this quarter, market reports noted 11 consecutive quarters of declining sublease vacancy. Cushman and Wakefield noted this as a strong sign of improving tenant stability.
“Sublease space accounted for just 14.5% of vacancy, down from 50% nearly six years ago.”
– Colliers
Colliers also stated that this reflected tenants downtown settling into long-term spaces. In other words, the worst phase of downsizing has likely passed.
Steady Demand Despite Softening Conditions.
"…The decline reflects slower and more selective occupier decision-making rather than a broad deterioration in market fundamentals.”
– Cushman and Wakefield
Q2 2026 was quiet, with the City of Vancouver and CRA representing the largest leasing transactions in Metro Vancouver.
While leasing volumes certainly slowed in Q2, it was not a major sign of concern, according to market watchers. All market reports noted softening volumes, but all agreed that there are still strong signs of momentum.
Market reports noted this was likely the result of fewer large-block transactions and more selective occupier decisions, rather than any broad-based decline.
The proof for this was in declining availability and relatively stable vacancy rates, as the market is no longer seeing a wave of unwanted space continuously entering the market.
Additionally, the narrowing gap between availability and vacancy indicates improving market balance.
According to Colliers, availability has declined in the downtown core for two consecutive quarters, and JLL specifically noted that availability dropped 40 bps to 11.9%.
Yaletown, Gastown, and the Downtown Core – What’s Happening Downtown?
The market is bifurcating and stabilizing unevenly across downtown Vancouver.
While downtown Vancouver’s total vacancy rate is quite low compared to the rest of Canada, the rate changes considerably, depending on the building class or neighbourhood.
Class C buildings downtown average a 15% vacancy rate, compared to 8% for Class AAA.
And Gastown has an overall vacancy of approximately 17% compared to an overall 12% downtown.
Downtown Asking Rents Prove Resilient
Downtown office asking rents have remained relatively stable over the past several years. And looking back to 2020, they’ve largely remained unchanged. There were modest quarter-over-quarter declines in Q2. However, some have speculated that landlords have contributed to keeping rents from falling further as they continue to offer historically high incentive packages to preserve headline rents.
"Historically high incentive packages are expected to continue through Q4 2026 as landlords pursue longer-term lease commitments (10+ years) while preserving face rents amid soft market conditions.”
– Cushman and Wakefield
Limited New Office Construction
There was significant media coverage this quarter that Vancouver’s office market vacancy numbers are peaking, as new office construction remains limited. Several market reports noted that the office construction pipeline is at a low, which will ultimately have a significant impact on future vacancy rates. As corporate Canada continues to implement return-to-work policies and leasing demand remains steady – particularly in trophy-class buildings – we can expect vacancy rates to start coming down quite significantly.
