Vancouver office market struggling as vacancies rise, construction dives

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Vacancy rate hits 9.7%, second straight quarter of increase

Metro Vancouver office vacancies are continuing to tick upwards as developers consider shifting their priorities mid-construction to hotels or residential.

The region’s overall office vacancy rate rose to 9.7 per cent in the second quarter of 2024, according to a new report from real estate services firm CBRE.Split between Vancouver’s downtown and the surrounding suburbs, the former is struggling more with a vacancy rate of 10.8 per cent. The office vacancy rate in the suburbs landed at 8.4 per cent last quarter.The first quarter saw 6.2 million square feet of office space under development.

But by the second quarter, this figure dropped to 1.1 million square feet, “with no major commencements and a growing interest in office conversions to other uses with some new developments shifting mid-construction to either residential or hotel,” the July 2 report stated. Toronto was the only other city with more than 1 million square feet of office space under development. While most of Toronto’s construction was in the city’s downtown, Metro Vancouver’s office construction was almost entirely in the suburbs.

Nationally, office construction hit its lowest levels since 2005, falling to 5.7 million square feet in the second quarter of 2024.

 

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