Market Report: Q4 2025 Vancouver Office Top Highlights
What happened last quarter? Here is what you need to know!
- Shell Space vs. Fitted Out: what you need to do to attract tenants.
- Sublease market declining: a positive sign.
- Market remains steady – leasing activity continues but at a moderate pace.
Metro Vancouver’s office market is stabilizing: sublease space is down, absorption is improving, and fewer new buildings this year are helping steady vacancy, even though direct space remains high.
“The market appears stable rather than rapidly deteriorating or recovering.”
- Colliers
Big Transactions in Metro Vancouver this Quarter – Childcare dominates the leasing space, return-to-work mandates are keeping major companies downtown, and flight to quality persists with a large sublease at B6.
Childcare: As the broader economy continues to shift and tenant mix changes, an interesting trend is taking shape with childcare dominating the leasing landscape this quarter.
- Willowbrae Academy leased 33,653 sf at 10651 Shellbridge Way, Airport Executive Park
- CEFA leased 15,873 sf at 978 Granville Street
Cushman and Wakefield touched on this trend, noting that there has been an increasing trend of non-office tenants leasing office space. They additionally noted that Willowbrae Child Care Academy has been expanding in various submarkets in recent years.
Corporate Canada: Additionally, large companies like TD Bank and Mastercard renewed or expanded their footprints downtown, likely as a result of corporate Canada’s return to work mandates. TD expanded by 5800 sf at 700 W Georgia, and Mastercard renewing 41,000 sf at 475 Howe.
Flight to Quality and B6: All market watchers highlighted large activity at B6, with Equinox Gold subleasing 21k sf at the newly built B6 and Connor, Clark and Lunn also leasing 82,000 sf.
Shell space vs. Fitted out? Tenants in the driver’s seat
“Landlords with unimproved or generic space are under pressure to provide aggressive inducements or retrofit premises, while those with view space and built-out improvements continue to attract premium interest.”
- NAI Commercial
Flight to quality has been a consistent theme since the pandemic, as employers look to lure employees back to work. Colliers noted flight to quality is still the defining trend in Vancouver’s office market.
However, in a separate but related trend, this remains a tenants' market, and that means landlords need to incentive leasing. All market watchers highlighted specifically how shell space, even in high-tier buildings, sit empty, while “show-suites” are quickly snapped up.
And according to Colliers, Sublease spaces average 303 days on the market, while headleases average 579 days due to higher demand leasing of improved suites.
Sublease market easing
All market watchers noted the decline in the sublease market as subleases account for roughly 16% of total vacant space, down from a peak of nearly 26%.
This could be interpreted as a positive sign for stability as tenants are more predictable, and the market stabilizes.
“Vacancy shifts back toward direct space reflect greater stability among major tenants.”
- Colliers
Metro Vancouver sublease activity has been declining for nine consecutive quarters and is no longer a meaningful contributor to overall vacancy. Sublet space now accounts for just 16.8% of total vacant space, well below the 2023 peak when subleases represented nearly 26% of overall vacancy.
– Cushman and Wakefield.
Office market continues to stabilize
“Despite elevated overall vacancy, the market is showing signs of stabilization as tenants remain selective and sublease space continues to be absorbed.”
- NAI
- Leasing activity slows.
- Vacancy remains high, but stable.
- Sublease market continues to decline.
Overall, the market remained steady this quarter, with vacancy stabilizing and moderate to softer leasing activity.
While vacancies persist, market watchers note that new construction completions and large available blocks are likely leading to vacancies.
Leasing activity softened, likely as a result of tenants exercising caution with political and economic instability, and being selective in their choices, suggesting we are in a tenant’s market.
