Office leasing activity in Metro Vancouver had a strong start to the year, seeing the most activity since the first quarter of 2018 to help nudge down vacancy in the region.
Regional vacancy declined to 9.1 per cent in the first quarter of 2025, down from 9.4 per cent during the same period last year, according to Newmark Group Inc.
The commercial real estate firm’s May 14 report attributes the decline in vacancy to strong performances in the suburbs, as well as downtown renewals and relocations.
“We saw quite a number of deals being done in the first quarter, and that’s new leases, that’s renewals, and we saw it in a wide range of tenant types,” said Andrew Petrozzi, director and head of Canada research with Newmark.
“That amount of leasing activity, we haven’t really seen since pre-COVID, and that bodes well for the market.”
Newmark’s first-quarter office report on Vancouver said local tenant types are currently more active than global tech firms. It also said suburban strength is a key driver of demand.
According to the report, tightening vacancy rates in large suburban markets like Burnaby, Richmond and Surrey, combined with declines in other parts of Vancouver, have left downtown as the only sub-market exceeding 10-per-cent vacancy.
Much of the 260,000 square feet of property leased during the first quarter came from the suburbs, such as Richmond (85,000 square feet) and Surrey (43,000 square feet), said the report.
“When new supply is delivered in the suburbs, it tends to be absorbed fairly quickly,” Petrozzi said.
Throughout most of the COVID period, suburban office tended to stay fairly stable, he said.
“We didn’t see the spikes in vacancy that we saw in the downtown core, and the markets historically over that kind of three- or four-year period actually remained quite stable and, in fact, in some cases actually declined.”
This was “obviously very different from the narrative we were hearing about as it relates to downtown,” he said.
With office vacancy now as low as 4.3 per cent in Surrey, more supply may be needed in the suburbs.
"The suburban office markets typically have not had as much supply, new supply, as say the downtown market receives," Petrozzi said.
"As that continues year after year, we continue to see the suburban markets remain very tight vacancy-wise."
