'To be honest, every city in Canada has turned the corner on downtown vacancy and has started to move positively, except Vancouver. It's highly unusual.'

While most downtown cores in Canadian cities have had a decrease in office vacancy rates, Vancouver remains an outlier, a situation that is quite rare, says an observer of the local market.

Blair Quinn, vice-chairman at commercial broker CBRE, said Vancouver is usually the “last to enter a bad market” and the “first to recover.”

But CBRE pegged the downtown Vancouver vacancy rate in the third quarter of 2026 at 13.1 per cent, the highest in 22 years.

“To be honest, every city in Canada has turned the corner on downtown vacancy and has started to move positively, except Vancouver. It’s highly unusual.”

Quinn said vacancies in the downtown Vancouver office market are still creeping up, but expects this to reverse sometime in 2027.

He suggested the delay in a turnaround in Vancouver stems from companies waiting for a potential change in provincial leadership before investing.

“I think we’re nudging to the bottom of the cycle, but there are so many issues related to provincial politics that people are waiting.”

Echoing business groups and associations, Quinn cited a negative environment for investment brought on by a perception of slow economic growth and uncertainty.

Commercial real estate company Avison Young said earlier this year that there are no new class-AAA or -A buildings in the construction pipeline, and any project that started today would take at least five years to complete.

It estimated that if the pace of leasing space that exists today was only half of the historical average, the vacancy rate would drop to about 10 per cent. If it were to quicken to be 150 per cent of the historical average, the vacancy rate would drop to just 2.3 per cent by 2029, which would be a large swing from where it is now.

Quinn at CBRE agrees that because there won’t be new inventory for five or six years at least, the picture can flip very quickly back to one where there is a race on for space, and vacancy rates drop.

The question is what will push the pace of leasing to increase, and when will it start?

“There just has to be positive change that has people spending money, people making commitments, people hiring. When you’re taking down space, you’re investing in the economy. Your trades are working. We are just on hold and listing in the wrong direction at the moment,” he said.

The lag in Vancouver is particularly different because it usually recovers more quickly than other markets, said Quinn.

Unlike the emphasis on banking in downtown Toronto and on energy in downtown Calgary, Vancouver’s market is a mix of mining, tech and services that “really softens the blow of the highs and the lows,” said Quinn.

Two large downtown Vancouver blocks of space were vacated in the third quarter. Amazon gave up pockets of space, amounting to about 240,000 square feet, as it moved into its new corporate hub at The Post building on West Georgia Street.

CBRE anticipates that it will take time for these spaces to get leased. It hinges on economic uncertainty clearing, although recent infrastructure announcements around LNG production may spur some demand.

Avison Young said that despite the increase in vacancy with the space that Amazon has vacated, there are still some encouraging trends.

“Leasing activity continues, several significant occupancies are expected over the next six to 12 months, and the availability of high-quality space, particularly contiguous blocks, continues to tighten.”