Canadian office vacancy falls for fourth straight quarter: CBRE
Seven of 11 Canadian markets recorded positive absorption in the period, with overall net absorption reaching 1.2 million square feet, led by Toronto, Calgary, and Montreal, each of which absorbed more than 300,000 square feet in the quarter.
“For the first time since before the pandemic, office leasing momentum remained positive for a fourth consecutive quarter in the second quarter of 2026,” the report said.
Trophy buildings lead, but demand is spreading downward
The initial phase of the recovery concentrated in top-tier, triple-A office space. Canada’s national trophy vacancy rate now sits at 9.4%, just 100 basis points above its pre-pandemic level.
Toronto has the least available premium space of any Canadian city, with an AAA vacancy rate of only 2.6% in Q2, according to CBRE. That scarcity is now pushing tenant demand into the next tier down, a development with direct implications for commercial mortgage brokers financing Class A and Class B assets.
“The first stage of the Canadian office recovery was in trophy buildings and it’s encouraging to see demand trickling down into the next-best spaces. The balance of Class A was the primary beneficiary, however even Class B/C vacancy is starting to improve amid a mix of transactional activity and the removal of inventory for building conversions,” said Marc Meehan, CBRE Canada research managing director.
