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Following years of uncertainty, CBRE’s forecast suggests the office leasing market may finally be turning a corner. With no major new office projects under construction and several previously planned office developments paused, CBRE expects inventory growth to remain essentially flat in the near term.

But it should be noted that just days prior to CBRE’s publication of its forecast, the City of Vancouver began the formal public consultation period for Cadillac Fairview’s newly-submitted development permit application for 601 West Cordova St., effectively rebooting its long-envisioned Waterfront Station office tower project with a brand new 22-storey design featuring about 417,000 sq. ft. of premium office space.

The municipal government is expected to decide on Cadillac Fairview’s proposal in May 2026.

This is the first major office tower proposed for downtown Vancouver in years amid the high vacancies induced by the pandemic. Even if approved, the project would still be several years away from completion and impacting market supply levels.

As well, QuadReal Property Group’s sale of its flagship The Post mixed-use office and retail building — anchored by Amazon’s office presence — in 2025 is indicative of the downtown Vancouver office market’s relatively strong fundamentals. The property was sold to Pontegadea Inversiones SL, a Spanish entity owned by Zara founder Amancio Ortega, for over $1 billion.

Despite that tentative return of interest in new office development, the bigger picture still points to office inventory shrinking rather than growing in the near term.

In December 2025, the City approved Reliance Properties’ development permit application to renovate and convert the nearby 1966-built, 11-storey office building at 1111 West Hastings St. into a hotel with 180 guest rooms under the Le Germain Hotel brand. This will remove about 100,000 sq. ft. of office space from the market, with construction expected to begin relatively soon if the project is to meet its target of opening the hotel in 2029.

Moreover, as previously reported by Daily Hive Urbanized, Westbank has abandoned its approved plans to build a 17-storey, 583,000 sq. ft. office tower project at 150 West Georgia St. — the site of Creative Energy’s steam plant — for a pivot into a 48-storey tower with 700,000 sq. ft. of space, containing hotel, residential, and data centre uses.

As well, Austeville Properties’ approved plan to build a 23-storey, 376,000 sq. ft. office tower at 450 West Georgia St. has been cancelled, with a development permit application recently submitted to turn the site into a two-storey, 44,000 sq. ft. grocery store and pharmacy building.

According to CBRE’s forecast, office demand in downtown Vancouver is strengthening, relatively.

Gross leasing activity has doubled year-over-year, a signal that prospective tenants are exploring the currently favourable leasing options after a prolonged period of caution.

CBRE notes that this combination of constrained supply and rising tenant activity should allow existing vacant space to be gradually leased, pushing office vacancy rates lower through 2026.

Downtown Vancouver’s total leased office space supply is forecast to remain steady at roughly 27.8 million sq. ft. through 2026, while vacancy is expected to edge down after peaking in 2025. CBRE projects the office vacancy rate will dip to 12.3 per cent in 2026, after reaching 12.8 per cent at the end of 2025. The highest vacancies are within the older and/or lower-tier properties, while newer, higher-calibre, and amenity-rich properties continue to perform relatively well.

Although downtown Vancouver’s overall leased office vacancy rate is currently highly elevated compared to its pre-pandemic range of about two per cent, it is still Canada’s best-performing major city centre office market.

Net absorption of downtown Vancouver’s office space, which turned negative last year, is projected to return to positive territory in 2026. Asking office rents, which softened in 2025, are forecast to firm modestly as conditions stabilize.

Metro Vancouver’s suburban office market — all areas outside of the downtown Vancouver peninsula — tells a similar, if quieter, story. Inventory growth remains limited, vacancy is expected to trend down gradually, and leasing is forecast to improve as tenants look beyond the core for value and flexibility.

In the suburban office market, vacancy is expected to remain comparatively lower and more stable. CBRE expects the office vacancy rate outside of the downtown Vancouver peninsula will inch lower from 10.3 per cent in late 2025 to 10.2 per cent in 2026. Limited new construction and improving leasing support a slow but steady tightening, as some tenants continue to seek cost-effective alternatives outside Vancouver’s city centre.

While the office sector shows signs of recovery, CBRE’s broader outlook highlights uneven conditions across other non-residential property types.

Leased industrial space, after several years of rapid expansion in response to previous extreme shortages, is now working through an oversupply cycle. However, a resurgence in large-format leasing — particularly for spaces exceeding 100,000 sq. ft. — is expected to accelerate leasing activity and set the stage for a rebound by the second half of 2026.

Retail, meanwhile, faces a pivotal period as significant new developments deliver in 2026 and 2027. Although consumer spending remains resilient and vacancy is tight in many categories, the market will be closely watching how new supply is absorbed, particularly in shopping centres.

In Spring 2026, Vancouver’s new Oakridge Park mall will finally open, with the overwhelming majority of the spaces already pre-leased, and a significant proportion of the shops, food and beverage offerings, and services expected to be ready in time for opening day crowds. It should also be noted that Oakridge Park’s first phase completion also entails significant strata and lease office space within the base podiums of its initial residential towers.

The multi-family residential building market is also navigating a short-term supply peak, driven by a wave of secured purpose-built rental housing completions in 2025 that will continue into 2026, as well as the conversion of new strata market ownership condominium projects to rental housing. Rental housing vacancy may rise modestly in the short term, but CBRE expects this trend to stabilize within the next year as new units are tenanted and future supply tapers off.

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