Q2 2023 Vancouver Office Market Report

The second quarter was again very sluggish with leasing velocity posting new lows not seen since the extremes experienced during COVID. At just 452,000 square feet, leasing activity was little more than half the 5-yr average of 890,000 square feet. At the end of the quarter the region wide availability rate registered 10.8%, the highest level since the third quarter of 2016, while the vacancy rate increased slightly to 6.0%, double Q4 2019. After a mild bounce back during 2021, the last 18 months has been characterized by subdued leasing activity and a broad-based hesitancy to commit to space, particularly if substantial capital expenditures are required. This has put shell space at a substantial disadvantage, and conversely well improved space at a significant advantage. To help level the playing field, landlords with first generation space have responded with spec suites, with limited success.