Canada's office market hits "the great stabilization" as industrial sector poised to power new economy - Colliers Q3 2026 National Snapshot

With most office markets past “peak vacancy,” a new wave of government-led investment in defence and infrastructure is set to reshape the industrial sector.

Canada’s commercial real estate market is entering a new period of stabilization and structural change, according to the Q3 2026 National Market Snapshot from Colliers. After years of turbulence, most of the nation’s office markets have passed “peak vacancy” and are entering an extended flat period, while the industrial sector is evolving from a logistics-driven boom into a critical engine for Canada’s advanced economy.

The industrial transformation: Building Canada’s future

The industrial real estate sector is evolving beyond logistics to become the physical backbone of a new national economic strategy. Spurred by the federal government’s Defence Industrial Strategy and the “Building Canada Strong” initiative – which together represent over $1 trillion in planned public and private investment – demand is shifting toward highly specialized facilities.

Colliers’ recent report Nation Building in Canada identified a potential surge in future demand for expanded manufacturing plants, advanced R&D labs, and secure defence-related facilities. This transformation is already visible in markets like Quebec City, where the construction pipeline is dominated by data centre projects, and Ottawa, where demand from the aerospace and defence sectors is putting immense pressure on an already tight industrial supply.

“I expect we are on the cusp of a foundational shift in Canada’s industrial economy, and commercial real estate is at the heart of it,” said Adam Jacobs, Head of Research for Colliers Canada. “For years, our national supply chains have been too reliant on international suppliers. Now, with historic new investment in defence and infrastructure, we are seeing the direct real estate requirements needed to bring that ambition to life.”

The great stabilization in the office market

While the industrial market transforms, the Canadian office market is finding its footing. With return-to-office plans now largely settled into a stable hybrid model, companies are beginning to make long-term real estate decisions again, leading to a slow but steady return of leasing activity.

“In Western Canada, we’re seeing a tale of two markets, but the overarching story is one of resilience,” said Susan Thompson, Director of Research for Western Canada at Colliers. “Calgary’s suburban office market is a great example, hitting a recovery milestone not seen in over a decade as its vacancy rate dropped below 13%. Vancouver remains a market to watch closely as it navigates both a municipal and a provincial election this month.”

Key findings from the Q3 2026 report:

• Greater Toronto Area (GTA) office vacancy declined to 10.4%, supported by 860,000 sq. ft. of positive absorption, driven primarily by Class A assets.

• Calgary’s suburban office market vacancy rate fell to 12.9%, the first time it has been below 13% in over a decade.

• Metro Vancouver’s industrial market vacancy remains tight at 2.6%, while Montreal’s vacancy declined significantly to 5.2%.

• Quebec City’s industrial pipeline is dominated by data centre projects, signaling a high-tech shift in industrial demand.

The full National Market Snapshot Q3 2026, including detailed regional statistics and market commentary, is available at collierscanada.com/research

About Colliers

Colliers  is a global diversified professional services and investment management company operating through three industry-leading businesses: Commercial Real Estate, Engineering and Investment Management. With greater than a 30-year track record of consistent growth and strong recurring cash flows, we scale complementary, high-value businesses that provide essential services across the full asset lifecycle. Our unique partnership philosophy empowers exceptional leaders, preserves our entrepreneurial culture, and ensures meaningful inside ownership – driving strong alignment and sustained value creation for our shareholders. With $6 billion in annual revenues, 28,000 professionals, and $110 billion in assets under management, Colliers is committed to accelerating the success of our clients, investors, and people worldwide. Learn more at colliers.com.

Source : Colliers Macaulay Nicolls Inc., Brokerage