Every quarter, like clockwork, the same prediction resurfaces. Office vacancy is high, yes, but recovery is just around the corner. This time it will be different. This time the numbers will turn. Ottawa’s Q1 2026 office vacancy data landed this week, and the corner has not been turned. CBRE pegged the city’s office vacancy at […]
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Every quarter, like clockwork, the same prediction resurfaces. Office vacancy is high, yes, but recovery is just around the corner. This time it will be different. This time the numbers will turn.
Ottawa’s Q1 2026 office vacancy data landed this week, and the corner has not been turned. CBRE pegged the city’s office vacancy at 14.3 per cent, up a full point from December. Colliers reported 12.9 per cent, with 372,000 square feet of total leased space disappearing in a single quarter.
Three full floors at Constitution Square came back to the market. The federal government shed more than 225,000 square feet across two locations. Giant Tiger decided it does not need to occupy its entire headquarters – a building that opened only five years ago.
And yet, within the same reports, two of Canada’s largest brokerages frame this as a passing phase. CBRE’s Ottawa managing director describes the situation as a “digestion period” and suggests we are on “the tail end” of the adjustment. That would be easier to accept if CBRE’s own national research did not tell a very different story.
We have heard this before. We heard it in 2022, when return-to-office mandates were going to bring everyone back. We heard it in 2023 and 2024, when each new quarter was supposed to mark the turning point. The language shifts slightly each time, but the optimism is always just a quarter or two ahead of the present, and the numbers keep telling a different story.
Let’s look at those numbers plainly, starting with CBRE’s.
Nationally, according to CBRE Canada’s year-end report, the office vacancy rate closed 2025 at 18 per cent. That is down from 18.7 per cent the year before, which sounds encouraging until you remember that the pre-pandemic rate was 10.9 per cent. We are still sitting nearly 65 per cent above that baseline after six years.
And the modest improvement was not driven primarily by tenants flooding back. CBRE’s data shows that since 2021, roughly 7.8 million square feet of Canadian office space has been converted to other uses and another 2.6 million square feet demolished. When vacancy improves because buildings stop being offices, that is not recovery in any traditional sense. That is the market repricing what office space is for.
In Ottawa specifically, the story has its own wrinkle. The current optimism is pinned almost entirely on the federal government’s four-day-a-week RTO mandate, set to take effect in July. But this assumption deserves scrutiny. Ottawa has already been through a three-day mandate, and rather than stabilizing demand, the government continued shedding space throughout that period.
CBRE reported more than 413,000 square feet of negative absorption in Q1 alone, driven largely by federal departures. Public Services and Procurement Canada, the very department responsible for managing the government’s real estate portfolio, vacated 114,000 square feet of its own space. If the agency in charge of federal office space is giving it back, it is worth asking what that signals about the trajectory.
