High-end office towers are a hot commodity in Vancouver.
That’s according to a Monday report from CBRE Group Inc., which found competition for trophy buildings is driving significant absorption of office space in the region.
The commercial real estate services firm said the Vancouver market absorbed 230,000 square feet in the first quarter, with top-tier properties outperforming other assets.
This resulted in Vancouver’s downtown vacancy rate falling 80 basis points quarter-over-quarter to 10.7 per cent. The downtown Class A vacancy rate was even lower, at 8.6 per cent.
Compare this to the unchanged 10.8 per cent vacancy rate in Vancouver’s suburbs.
“Q1 2025 marks the first time since Q2 2021 that the downtown vacancy rate is lower than in the suburbs, indicating that demand is starting to catch up with new supply,” CBRE’s first-quarter office report said of Vancouver.
“The decline in downtown was largely driven by Class AAA and A space, which reported its lowest vacancy rate since Q3 2022. With minimal new supply on the horizon, demand continues to apply downward pressure on premium quality assets.”
Average Class A net rent in Vancouver during the first quarter was $37.65 per square foot, the March 31 report said.
The strength of best-in-class product reflects tenant preferences for quality inventory, said the analysis, which also contained data concerning sublets, construction activity and net rentable area.
CBRE also released a separate report Monday examining Vancouver’s industrial real estate market. The first quarter was relatively quiet, it said, with pockets of improving fundamentals overshadowed by tariff uncertainty.
“Increased activity towards the end of Q1 2025 saw net absorption return positive and availability rates fall to 4.9 per cent,” said the industrial report, “however declining average asking lease rates and a relatively large speculative construction pipeline continue to impact the Metro Vancouver industrial market.”
Availability rate measures the amount of space available for deals immediately or in the near future, whereas vacancy rate measures the amount of space available for immediate lease. Vancouver’s industrial vacancy rate was 3.7 per cent in the first quarter.
As of Q1 2025, average net rent in Vancouver’s industrial market was $19.96 per square foot, the company said.
