Market Report
Ottawa Office Investment Forecast
2026 Investment Forecast
Local Resilience to Improve
Office Market Amid Federal Caution
Government realignment meets opposing forces. Ottawa’s office market showed mixed conditions in 2025, with overall vacancy increasing to roughly 10.5 per cent as lingering trade risks slowed leasing velocity. Even so, office-to-residential conversions are beginning to reshape the metro’s office landscape. Roughly 200,000 square feet of space was removed from inventory last year, helping contain further upward pressure on vacancy. Looking ahead, counterbalancing forces are set to emerge. The federal government’s recent budget suggests public sector employment will fall sharply over the next five years; however, new full-time return-to-office mandates from local levels of government may lift overall utilization, with the federal government also planning to follow suit this year. At the same time, growing investment in defense and infrastructure should underpin a baseline level of private-sector demand. If Canada successfully renews its trade agreement with the United States, additional momentum could also materialize. Combined with Ottawa’s expanding technology ecosystem and continued conversions, these dynamics point to a market that is beginning to stabilize, with high-quality assets leading the recovery.
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