Office Vacancies in Canada Reach Highest Level Since 1994

(Bloomberg) -- Canadian office vacancies have hit their highest point in more than a quarter century, surpassing the levels reached after both the dotcom bubble and the global financial crisis.

The distress in the commercial real estate market comes as the Covid-19 pandemic continues to keep workers home and as employers reconsider how much space they’ll need long term. The national vacancy rate reached 15.7% in the third quarter, the highest since 1994, according to a report released Friday by commercial real estate brokerage CBRE Group. 

Across the country, office buildings that began construction before the pandemic are being completed and hitting the market even as many tenants are walking away from the space they have now, the report says.

With the highly contagious delta variant of the coronavirus spurring a new wave of infections, many companies and workers are delaying their office return despite provincial regulations allowing it. 

The vacancy trend is uneven, particularly in Canada’s largest cities. For example, available space in downtown Toronto, home to the country’s major banks, decreased slightly, while the citywide rate continued to climb.

Vancouver has the lowest vacancy rate in the country at 7.4%, but that’s still rising, up from 6.9% the previous quarter, as new supply continues to outpace demand. Calgary office vacancies are the highest in Canada at 32.9%.

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