Ottawa Office Market Report

Shift in government policy poised to lower vacancy by year-end. Ottawa’s office sector saw a renewed wave of vacancies over the past year as the federal government accelerated its footprint reduction. Within the last 12 months, the government vacated several satellite and suburban properties — including 114,000 square feet at 1550 Carling Avenue, 112,000 square feet at 59 Camelot Drive, and 73,000 square feet at 700 Silver Seven Road — as part of a shift to minimize operating expenses and consolidate employees into owned properties. This exit contributed to a 210-basis-point rise in the vacancy rate between the first quarter of 2025 and the first quarter of 2026. However, this trajectory may be short-lived, as Public Services and Procurement Canada recently signaled a pivot in its real estate strategy. To accommodate the new four-day in-office mandate, the government has acknowledged it may be forced to acquire additional space. This policy shift could reverse recent negative absorption trends and lead to an annual decline in the vacancy rate over the remainder of 2026.