If you only read the residential headlines, you would think Metro Vancouver's entire real estate market is in a slump. You would be wrong.

The commercial side of the market is telling a very different story. While home sales are running 25% to 30% below long-term averages, commercial real estate in Vancouver is stabilizing and, in several asset classes, showing genuine momentum heading into 2026.

The divergence between residential and commercial has not been this sharp in years. Here is what is happening and why it matters for property owners and investors.

Industrial: The Rebound Is Already Underway

Between 2016 and 2021, you could not build industrial space in Metro Vancouver fast enough. There was an estimated 6 million square feet of excess demand over supply. Developers responded by bringing roughly 10 million square feet of new industrial space to market starting in 2022, which created an oversupply for the first time in years.

That supply cycle is now ending. Demand began recovering in the second half of 2025, with strong positive absorption for large-format industrial space. Industry forecasts suggest that large-format industrial availability could be cut in half by mid-2026.

This matters for a few reasons. First, Vancouver is geographically constrained. There is simply a limited amount of industrial-zoned land in the region, and it is not growing. Second, Vancouver remains a critical trade and logistics gateway, regardless of what happens with tariff negotiations. Third, industrial land sales have collapsed to historically low levels, with only 17 transactions in 2025 compared to a historical average of 80 to 100. That scarcity will eventually push values higher.

For investors holding industrial assets, the message is clear: sit tight. For those looking to enter the market, the window of opportunity is narrowing.

Office: A Quiet Comeback

Vancouver's office market has been the punching bag of real estate conversations since the pandemic. Downtown vacancy remains elevated at roughly 12%, and the narrative has been relentlessly negative.

But the underlying data tells a more encouraging story. Gross office leasing activity doubled in 2025 compared to 2024. Major tenants are signing deals. Lululemon recently secured 290,000 square feet in what was described as Vancouver's biggest homegrown office lease deal.

Perhaps more importantly, there is no significant new office supply coming. Planned projects are paused across the board. With demand rising and supply frozen, vacancy is expected to decrease through 2026 as existing inventory gets absorbed.

The return-to-office trend continues to strengthen investor sentiment. Trophy buildings with modern amenities are outperforming the rest of the market from both an occupancy and rent perspective. The question for the office sector is not whether it recovers, but how quickly.

Private investors are already moving. Office investment volume jumped 92% year-over-year in 2025, driven in part by a landmark $1.2 billion transaction for The Post. Smart money is buying below replacement cost, anticipating that leasing fundamentals will continue to improve.

Retail: Quiet Strength

Retail real estate in Metro Vancouver does not generate the same headlines as office or industrial, but it arguably has the most stable fundamentals of any commercial asset class right now.

British Columbia's consumer spending has been more resilient than expected. On a per capita basis, B.C. residents are outspending their counterparts in other provinces across major spending categories. That resilience is translating directly into stability for retail tenants and landlords.

Retail vacancy is holding steady, supported by strong demand from necessity-based tenants like groceries, pharmacies, and healthcare providers. Experiential retail is also gaining traction as consumers seek in-person experiences that cannot be replicated online.

Meanwhile, delays in mixed-use and housing projects mean new retail supply is limited, which supports rental stability and stronger fundamentals for existing assets.

What This Means for Property Owners

The commercial real estate landscape in Metro Vancouver is entering a period of recalibration. Transaction volumes are down from peak years, but that is more a function of limited product availability than weak demand. Investors are being selective, favouring income-producing assets with strong fundamentals.

For property owners considering a sale, the market is rewarding well-maintained, well-located assets with stable tenancies. Buyers are coming off the sidelines, but they are sophisticated and data-driven. Pricing needs to reflect current market realities, not 2021 optimism.

For those considering acquisitions, the opportunity is in the mismatch between negative sentiment and improving fundamentals. The best time to buy is often when headlines are still bearish but the data has started to turn.

Our Perspective

At Iconic Properties Group, we work across both commercial and residential transactions, which gives us a perspective that specialists in a single asset class often miss. The residential slowdown is real, but it is not the whole story. Commercial real estate in Vancouver continues to offer compelling opportunities for investors who know where to look and how to move quickly when the right deal presents itself.

Iconic Properties Group specializes in commercial and residential real estate across Metro Vancouver. Contact us at (778) 987-7029 or contact@iciconic.com for a confidential discussion about your investment strategy.