With global financial markets riding big swings as U.S. President Donald Trump ramps up his trade war, more and more office tenants are taking a wait-and-see approach before committing to new leases, a prominent Ottawa broker says.
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With global financial markets riding big swings as U.S. President Donald Trump ramps up his trade war, more and more office tenants are taking a wait-and-see approach before committing to new leases, a prominent Ottawa broker says.
“We’re seeing a lot of deals that are pretty much negotiated, but the tenant is pausing before they sign on the dotted line because they want to see what is happening with tariffs,” Martin Aass, managing principal at Cresa’s Ottawa office, told OBJ in a recent interview.
“It’s absolute sand in the gears for our industry to have this sort of uncertainty coming out of Washington.”
Stock markets around the world have been rocked by a series of gains and losses this week amid uncertainty over whether Trump would impose more tariffs on China and how long the president would keep tariffs on other countries.
While Canada was spared from the additional U.S. tariffs that Trump imposed on other countries last week, Aass said the constant threat of a further escalation in the trade war is having a direct impact on the commercial real estate industry.
“I think there's a ton of uncertainty right now,” he explained. “And I think it’s got less to do with the stats and more to do with the news in terms of what’s going on down south of the border.
“I’m seeing landlords who don’t want to give up deals, they want to keep people at the table, they want to get deals finished. I think people are really nervous about the potential of a recession and the impact of Trump’s stuff.”
The first-quarter reports from two of Canada’s largest real estate brokerages provided little clarity on the current state of Ottawa’s office market.
Colliers reported that the city’s overall office vacancy rate fell to 11 per cent at the end of March, down from 11.6 per cent in the previous quarter. The firm said the local market “showed strong signs of recovery” in the first three months of 2025, with vacancies falling in all submarkets except Kanata.
CBRE, on the other hand, said the Ottawa market experienced “minor softening” in the opening months of 2025. Its stats showed the capital’s office vacancy rate rising to 12.7 per cent in the first quarter, up from 12.3 per cent at the end of 2024.
Maxime Foucaud, the managing director of CBRE’s Ottawa office, said leases that were signed in late 2019 or early 2020 before the pandemic wreaked havoc on the office sector are now expiring and those tenants are moving out.
In addition, he noted other offices are empty due to “shadow vacancies” – places where tenants still hold leases but are no longer occupying the space.
Foucaud said that while CBRE’s long-term outlook for the city’s office market remains positive, the current trade turmoil and the possibility of a change in political stripe on Parliament Hill may be putting a damper on leasing activity.
“We just have to weather this trade war with the U.S. and have (the federal) election, which will give us a little bit of insight on what the next government wants to do here in Canada,” he said. “I think everyone in Canada is sort of in a wait-and-see approach.”
Aass, who represents tenants in lease negotiations, said some landlords are still offering “generous inducements” such as free rent and fit-up allowances in an effort to fill vacancies.
But he also said he’s seeing a growing number of building owners and managers ask for deposits or letters of credit from occupants to protect themselves against potential defaults on rent payments as fears of a prolonged economic downturn intensify.
“We definitely see that (landlords) want to see the financials, and in a lot of cases they’re asking for more security than they might have asked for before,” Aass explained.
Suburban office properties continued to be the big winner in the Ottawa market to start the year, as neighbourhoods outside the core reported their seventh straight quarter of positive absorption.
But Colliers also said “increased touring activity” in downtown class-A properties in the first quarter could signal a “potential shift towards re-centralization that could boost downtown occupancy.”
Ottawa’s downtown vacancy rate fell nearly eight-tenths of a percentage point to 12.3 per cent, the company said, driven by more than 136,000 square feet of positive net absorption.
Colliers said those gains included “significant leases” at Groupe Mach’s marquee downtown office tower, One60 Elgin. Among the tenants signing deals to move into the building were the Royal College of Physicians and Surgeons of Canada, which took over more than 62,000 square feet of space in the class-A highrise.
“Well-amentized, built-out space is attractive, and if you have those alternatives in the downtown core, I’m sure tenants are happy to take those,” said Warren Wilkinson, senior managing director of Colliers’ Ottawa office. “Getting into a class-A building, there’s probably never been a better time than now.”
Kanata was the only suburban market to see an increase in vacancies in the first quarter despite several significant transactions such as Calian’s deal to lease 45,000 square feet of space at 175 Terence Matthews Cres.
Aass pointed to “troubling signs” that some companies in the far-west tech hub might be feeling the effects of the trade war and a turbulent global economy.
For example, Mitel – a mainstay of the city’s tech scene which recently filed for bankruptcy protection in the U.S. – put several thousand square feet of space at its office on Innovation Drive up for sublease last week.
“If you’re a landlord, it’s very concerning, for sure,” Aass said.
