Metro Vancouver’s office market softened in the third quarter while the region’s industrial sector continued to tighten amid strong leasing activity and limited supply.
Office vacancy rates increased in both downtown Vancouver and suburban markets, reaching 12.2 per cent and 7.9 per cent respectively, according to Colliers’ Q3 2026 national market snapshot released Thursday.
“The office market, after 12 months of fairly solid activity and a shrinking vacancy rate, has hit a period of stabilization whereas the industrial sector is evolving,” said Susan Thompson, director of research for Western Canada at Colliers.
“It's heavily driven by logistics and the movement of goods, which is driving a lot of the activity.”
The increase of office vacancy rate came as about 350,000 square feet of negative net absorption was recorded across Metro Vancouver, largely because of new listings entering the market, particularly in Burnaby and Richmond, according to Colliers.
“Vancouver, if you’re looking at the office market, it hasn’t found the same kickstart to its industries and economies that drive activity the way a lot of the rest of Canada has,” said Thompson.
“So it’s really feeling a bit sluggish and stalled at the moment.”
Downtown Vancouver has one of its highest vacancy rates in more than 20 years, while the suburban market is performing better by comparison, according to Thompson.
Surrey’s office vacancy rate was about 7.6 per cent. Burnaby and Richmond have also seen relatively strong leasing activity, although newly completed buildings and new listings affected vacancy calculations during the quarter.
She attributed part of the difference to the composition of suburban tenants, which tend to be smaller and more stable.
Industrial market moves in opposite direction
While office conditions softened, Metro Vancouver’s industrial market continued to tighten, according to the report.
Industrial vacancy fell 0.5 percentage point quarter over quarter to 2.6 per cent, while availability declined 0.7 percentage point to 3.7 per cent.
It was the first time in 10 quarters that both vacancy was below three per cent and availability was below four per cent, according to Colliers.
“Metro Vancouver's industrial market continued to tighten this quarter as strong leasing activity, coupled with limited new availability, pushed both vacancy and availability lower,” the report said.
The region recorded nearly 1.3 million square feet of positive net absorption during the quarter, supported in part by several major lease transactions.
One of the largest was the leasing of 411,417 square feet at 18111 Blundell Road in Richmond, removing a substantial block of industrial space from the market.
The industrial market is also undergoing a broader structural shift across Canada, as demand increasingly extends beyond traditional logistics facilities toward manufacturing, advanced research and development, defence and other activities tied to Canada's emerging economic strategy, according to Colliers.
"I expect we are on the cusp of a foundational shift in Canada's industrial economy, and commercial real estate is at the heart of it," said Adam Jacobs, head of research for Colliers Canada, in a statement.
"For years, our national supply chains have been too reliant on international suppliers. Now, with historic new investment in defence and infrastructure, we are seeing the direct real estate requirements needed to bring that ambition to life."
Election uncertainty adds another layer
Thompson said uncertainty surrounding B.C.’s municipal and provincial elections is also contributing to caution among businesses making longer-term real estate decisions.
“With an election both at the municipal and provincial [level] going on across the board in B.C. right now, that’s really stalling a lot of decision-making,” she said.
She expects some of that uncertainty could ease after the elections, potentially allowing businesses to make longer-term decisions.
“We could potentially see things unlock once there’s some more certainty in what people are going to be facing,” Thompson said.
The data relating to real estate on this website comes in part from the MLS® Reciprocity program of either the Greater Vancouver REALTORS® (GVR), the Fraser Valley Real Estate Board (FVREB) or the Chilliwack and District Real Estate Board (CADREB). Real estate listings held by participating real estate firms are marked with the MLS® logo and detailed information about the listing includes the name of the listing agent. This representation is based in whole or part on data generated by either the GVR, the FVREB or the CADREB which assumes no responsibility for its accuracy. The materials contained on this page may not be reproduced without the express written consent of either the GVR, the FVREB or the CADREB.