This market update reflects published data available as of mid-September 2026. Figures will change as new quarterly reports are released.
Metro Vancouver’s office market is sending mixed signals heading into the second half of 2026. Downtown is slowly improving, the suburbs have softened, and almost no new supply is on the way. For businesses planning a move, a lease renewal or an office renovation, those trends shape how much leverage you have and what kind of space will compete.
Here is what the latest reports say, and what it means for your next office tenant improvement.
According to CBRE Canada’s Q2 2026 Vancouver Office Figures, overall Metro Vancouver office vacancy rose 80 basis points to 11.6% in Q2 2026, driven by the suburbs, while the downtown core edged down to 12.2%. Nationally, CBRE’s Q2 2026 Canada Office Figures recorded a fourth consecutive quarter of positive net absorption, the first sustained run of its kind since before the pandemic.
The suburban picture is less encouraging. CBRE’s Q2 national data identifies Vancouver as one of the two weakest suburban performers, with suburban vacancy rising 190 basis points, a reversal from earlier quarters when the suburbs outperformed downtown. Altus Group’s Q2 2026 Canadian Office Market Update describes Vancouver as still in the earlier stages of recovery compared with Toronto and Calgary.
What it means for tenants: if you are leasing or renewing suburban space, landlords may be more open to negotiating tenant improvement allowances than their downtown counterparts are right now. That makes it worth knowing what your build-out will actually involve before you negotiate, so the allowance you ask for matches the work.
The clearest trend across every source is the gap between top-tier buildings (Class AAA and A) and older Class B and C stock. CBRE reported that the downtown gap between the two tiers held steady in Q2 2026, the first quarter in more than two years that it did not widen, leaving the divide at its widest in years. Buildings with modern mechanical systems, amenities and sustainability credentials are being leased first, while older inventory sits. Altus Group notes that competition for Class AAA space is now spilling over into well-located Class A buildings.
For property owners, this has a direct practical consequence: upgrading existing space to compete with top-tier buildings has become a leasing strategy, not just a capital project. RENX’s reporting from the Vancouver Real Estate Forum highlighted growing landlord interest in “show suites”: fully fitted, move-in-ready spaces that skip the traditional tenant improvement negotiation. Tenants are increasingly looking for fitted space rather than bare shell.
We covered this trend in more depth in How Vancouver’s Flight to Quality Is Reshaping the TI Contractor Industry. For how hybrid work first changed office demand, see The Future of Office Space Occupancy.
One figure stands out from CBRE’s July 2026 release: just one new office project broke ground in Canada in Q2 2026, and it was in Vancouver. It was only the third national construction start in 12 months. Altus Group puts Vancouver’s active under-construction pipeline at eight projects totalling just over 582,000 square feet, with most of that space still available for lease. Nationally, CBRE reports active office construction at a historic low of 1.2 million square feet, with no significant deliveries expected beyond 2027.
What it means for tenants: with so little new space coming, the window to secure large contiguous blocks, particularly in Class A, is likely to narrow over the next 12 to 18 months. Larger tenants approaching lease expiry should start conversations early and leave enough time for design, permits and construction before their move date.
What it means for landlords: the lack of new competition does not automatically fill older buildings. RENX reporting notes that Vancouver’s seismic requirements and high land values make full office-to-residential conversion less viable here than in eastern Canadian markets. For most Class B owners, repositioning the building as better office space remains the more practical path.
Transaction data points in the same direction. Altus Group’s Vancouver Q2 2026 market update reports that overall commercial real estate investment volume fell 23% year over year in the first half of 2026, and office-specific investment was down 46%, constrained by limited deal supply and higher financing costs. Altus also notes a strategic shift away from ground-up development toward retrofitting and upgrading existing buildings.
Nationally, office-to-other-use conversions slowed sharply after a record first quarter, with CBRE reporting only two conversion or demolition projects moving forward across Canada in Q2 2026. Altus also flags continued job losses in construction and technology as a drag on demand in the region.
In a market where tenants choose on quality rather than just location, the projects that make the biggest difference to older and suburban buildings tend to be:
For typical budget ranges on office build-outs, see our tenant improvement cost guide.
Whether you are a tenant preparing to negotiate a lease or a landlord repositioning a building, a realistic scope and schedule for the build-out puts you in a stronger position. Hallmark Projects builds office tenant improvements and base-building upgrades across Metro Vancouver.
Talk to us early. Contact us to review a space or plan your next office project.
