Vancouver’s commercial real estate vacancy rate remains high amid hybrid work

The days of working from home are coming to an end for many, making office buildings busier.

A new report found employees returning to the office could have an impact on the commercial real estate activity in Vancouver and other Canadian major cities.

According to the 2026 Royal LePage Commercial Real Estate Report, downtown Vancouver has the third highest commercial vacancy rate in Canada at 3.6 per cent. In comparison, the Montreal region had the highest commercial vacancy rate across all industry types at 5.2 per cent, followed by Calgary at 3.8 per cent. Downtown Toronto had the lowest commercial vacancy rate at 2.1 per cent.

The report also showed Greater Vancouver’s vacancy rate was sitting at 2.9 per cent.

“Vancouver’s downtown office rental market has remained soft in the post-pandemic period, with the greatest pressure on larger office buildings as companies reduce their footprints and continue using hybrid working models,” said Raman Bayanzadeh, principal of CRE investment and development team, Royal LePage Sussex.

“As a result, downtown landlords are increasingly offering incentives, such as discounted rental rates and extended rent-free periods to attract tenants.”

Bayanzadeh went on to say that office markets outside the city core have seen more stable growth in rental rates.

He explained to CTV News that Vancouver’s commercial real estate industry experienced an infusion of a large amount of capital and investment in office towers in 2025, which he believes is a positive sign for the future as occupancies remain high.

The survey released on Thursday found 42 per cent of respondents expect vacancy rates for office space to decrease in their market this year.

In recent weeks, the federal government announced it is expanding its return-to-office mandate for public servants.

Letters from the Secretary of the Treasury Board have gone out to workers in federal departments informing them that executives will be required onsite five days per week by May 4, and all other employees will be required onsite a minimum of four days per week by July 6.

With files from Sammy Hudes, The Canadian Press