Ottawa's commercial market was very strong pre-COVID (low vacancies across classes), but office has seen the clearest and most persistent increase in vacancies due to work-from-home shifts.
Industrial and retail have been more resilient, with vacancies rising modestly but staying low and demand-driven. These trends align with broader Canadian patterns, though Ottawa benefits from government/tech stability.
Some of you may know that occupancy in commercial business space is down, some federal governments spaces are less than 50% occupied.
Some commercial tenants will simply not renew their leases.
What will be the consequence of this in Ottawa? Do you know? Have you asked or surveyed landlords about their business horizons?
When building owners do not have tenants, who will support their mortgage payments?
This will affect their supporting banks adversely.
Are those buildings convertible to residential space? Do city bylaws permit the transformation?
What will be the consequence of this in Ottawa? Do you know? Have you asked or surveyed landlords about their business horizons?
When building owners do not have tenants, who will support their mortgage payments?
This will affect their supporting banks adversely.
Are those buildings convertible to residential space? Do city bylaws permit the transformation?
Office Vacancy Rate
- Pre-COVID (2019): Around 7.0–7.5% overall (e.g., reports noted a 10-year low of ~7.5% in early 2019 after strong absorption; downtown/Class A often lower at ~4.7–7.7%, suburbs similar or slightly higher). Ottawa was one of Canada's tighter office markets.
- Current (late 2025): 12.3% overall (Cushman & Wakefield Q4 2025), with fluctuations earlier in 2025 (e.g., 10.8–12.7% in Q1–Q2 per CBRE/Colliers). Downtown/core submarkets often higher (13–15% in recent periods).
- Comparison: Significantly higher now — roughly 5–6 percentage points up from pre-COVID levels. This reflects ongoing hybrid work impacts, slower federal government return-to-office, and some shadow/sublet space. Ottawa remains relatively low compared to national Canadian averages (often 17–18%+) or cities like Calgary/Toronto.
Are we willfully blind about the issue of low occupancy in commercial buildings?
ReplyDeletecommercial vacancy rates in Ottawa based on the latest available reports from major firms like Cushman & Wakefield, Colliers, CBRE, and others (as of early 2026, reflecting Q4 2025 or late 2025 data).Commercial real estate in Ottawa is typically broken down by major asset classes: office, industrial, and retail. Here's a summary of the most recent figures:Office vacancy rate: Ottawa's overall office vacancy rate settled at 12.3% in Q4 2025 (per Cushman & Wakefield's January 2026 MarketBeat report). This reflects a stabilization or slight improvement in some periods after earlier increases (e.g., it was around 12.7% in Q1 2025 per CBRE, and dipped to 10.8% in Q2 2025 per Colliers before ticking up again). Ottawa remains one of Canada's tighter office markets compared to higher-vacancy cities like Calgary or Toronto nationally, though downtown/core areas often show higher rates (e.g., around 14-15% in some submarkets) due to hybrid work trends and shadow space.
Industrial vacancy rate: This sector has been much stronger (one of Ottawa's best-performing). It rose to 5.8% in Q3 2025 (highest since the pandemic, per Cushman & Wakefield), but reports describe it as remaining low overall with strong demand from logistics, e-commerce, and manufacturing. Availability has been tight (e.g., around 4.3% in earlier 2025 data from Altus Group), with upward pressure on rents and new supply gradually easing constraints.
Retail vacancy rate: Retail has shown positive trends, particularly in ground-floor and neighbourhood spaces. For example, increased occupancy in office-tower retail led to a drop, with vacancy at 7.6% in some tracked segments (Cushman & Wakefield mid-2025). Neighbourhood malls continued declining (e.g., from 2.0% to 1.8% over six months in 2025 reports). Grocery-anchored and essential retail remain strong, with overall retail vacancy declining in the first half of 2025 per broader Canadian trends.
Overall, Ottawa's commercial market is mixed but resilient: office faces ongoing post-pandemic adjustments (with some recovery signs from return-to-office shifts), while industrial and retail are tighter and more demand-driven. These rates can vary by submarket (e.g., downtown vs. suburban/Kanata), class (A/B/C buildings), and exact timing—Q4 2025 data is the freshest widely reported.