Like many other Canadian markets, there is little to no new office supply in Vancouver’s pipeline, meaning the supply that currently exists will make up the market for the foreseeable future and landlords must work with what they have.

According to Avison Young’s Q4 office market report, a bit over one million square feet of new office space is set to complete this year – primarily as part of mixed-use projects rather than standalone office buildings and primarily outside of the downtown core. After that, Vancouver currently has just 350,000 sq. ft of new office coming in 2027 and beyond, “creating a widening supply gap.”

This served as the premise for a panel on Day Two of the recent Vancouver Real Estate Forum entitled Charting the next phase of Vancouver’s office market. Moderated by Avison Young Vancouver’s Glenn Gardner, it featured Gord Oughton of Allied Properties REIT, Roz McQueen of Nicola Wealth Real Estate, Jeff Rank of QuadReal Property Group, and Janay Koldingnes of EDIT Studios.

It was one of two panels devoted to the office sector during the two-day event March 31-April 1, with the other group focused on investment as opposed to leasing.

Uncertain market factors

The overall office vacancy rate in Vancouver ended 2025 at 12.4 per cent, according to Avison Young, after steadily rising from a low of sub-five per cent in Q4 2019. Gardner described it as a “stubborn” vacancy because the rate hasn’t budged for about a year.

Rank, SVP of commercial leasing at QuadReal, which sold The Post in downtown Vancouver to Spanish billionaire Amancio Ortega for $1.2 billion last fall, said Vancouver is a “difficult market to operate in” because demand is uncertain, there are not enough tenants, and the market cannot currently count on new entrants.

A not-insignificant amount of activity in the market, from a leasing perspective, has involved companies playing musical chairs with their spaces. After moving into the South Tower of The Post a few years ago, Amazon began moving into the North Tower two weeks ago, consolidating employees from the nearby Telus Garden and leaving behind an amount of space that Rank said is nearly two-thirds of a new build.

McQueen, VP of asset management and portfolio strategy for Nicola Wealth Real Estate, described the firm's office portfolio as exclusive to the Mount Pleasant neighbourhood of Vancouver. She sees smaller office buildings like the ones Nicola is involved in as more manageable than the large triple-A office buildings.

Show suites entering the mainstream

A large portion of the 55-minute panel was dedicated to discussing the trend of show suites – suites landlords fit out and make occupancy-ready, instead of the traditional method of holding shell space and then going through the tenant improvement process.

Oughton of Allied Properties REIT, which owns the 24-storey Deloitte Summit in downtown Vancouver after buying out Westbank in 2024, called show suites a “tried-and-true strategy” Allied has been utilizing on a “targeted” basis. He said tenants oftentimes do not want to manage a construction project like tenant improvements and prefer a “frictionless” experience.

He acknowledged show suites are a “loss leader” for Allied, but said they model the investment within the larger context of the life of the full building rather than within the narrower context of a particular lease or term. Rank echoed the sentiment, saying landlords just can’t sit on shell space anymore and have to remove barriers for tenants to remain competitive.

Koldingnes, partner and design director at EDIT Studios, an interior design studio for commercial projects, outlined several showsuite projects — with photos and floorplans — she has been involved in. Included were 601 W. Hastings for PCI Developments and 1075 W. Georgia for KingSett Capital and Reliance Properties.

In those cases, Koldingnes said, the landlords opted to start with a small number of suites before fitting out entire floors and both saw the spaces leased out quickly. Her prediction for 2026 is that show suites will grow in scale, be adopted by more landlords and with bigger floorplates.

Office investment

The investment panel was moderated by Canada ICI managing director of B.C. Graham Collings and featured Crown Realty Partners managing partner Emily Hanna, BGO CIO Simon Holmes, Realstar CEO Randy Hoffman, and Beedie’s president of industrial Todd Yuen.

The panel featured an in-depth discussion about BGO’s acquisition of the Oceanic Plaza office tower in downtown Vancouver from Oxford Properties and CPP Investments that closed in January. That transpired because Holmes of BGO was sitting next to Hoffman, who had been at Oxford for over 19 years before joining Realstar last year (prior to the Oceanic Plaza deal).

Describing the buyer-side perspective, Holmes said BGO believed the office market was going through a cyclical downturn rather than a fundamental change. He said BGO believed that meant the market was “poised for recovery” and they were looking to get into the market in a significant way. Oceanic Plaza checked off a lot of boxes for BGO and was the right opportunity at the right time.

Speaking on behalf of office-focused Crown Realty Partners, Hanna said Crown doesn’t currently have any assets in British Columbia, but said it is certainly interested and sees it as “a very liquid market.”

With the panel focused on investment across various asset classes, Holmes concluded his comments by saying his perspective is today’s market is less about specific sector allocations. What it really comes down to is executing a good strategy.