Montreal Office Market Report

Strengthening demand and limited supply tighten vacancy. Montreal’s office sector recovery is broadening. The rebound in space demand — measured by trailing 12-month net absorption — first emerged in the second quarter of 2025, led by renewed leasing activity in Class A properties, before extending to Class B buildings shortly thereafter. By the first quarter of 2026, Class C properties had also returned to positive absorption. Rising tenant demand, combined with the absence of new supply, has driven a 90-basis-point year-over-year decline in the vacancy rate — marking the first meaningful compression since the second quarter of 2020. Looking ahead, demand is expected to remain concentrated in higher-quality, amenity-rich buildings with strong transit connectivity, as occupiers continue to prioritize space efficiency and employee experience. Combined with limited new supply, spillover effects to lower-quality buildings are also likely to continue normalizing overall market conditions.