Ottawa CBD office market | 2026 Q2

A window is opening in Ottawa’s office market.

Key takeaways for senior leaders on the federal return-to-office mandate and what it means for downtown space.

The mandate

Federal return to office is already in motion.

May 4, 2026

Executives, 5 days a week

In effect across the core public service.

July 6, 2026

Core public service, 4 days a week

All other federal employees expected on site four days each week.

The space gap

Federal departments without enough room.

4+

federal departments have publicly admitted they cannot accommodate everyone.

• Global Affairs Canada: delaying due to a multi-year renovation at the Lester B. Pearson Building.
• Immigration, Refugees and Citizenship Canada: holding non-management staff at 3 days a week.
• National Defence: workspace will be limited at certain buildings.
• ESDC, ECCC, Justice, Fisheries and Oceans, Statistics Canada: still working out whether their footprints will hold.

The real vacancy picture

The headline number hides the story.

11.6%

Headline CBD office vacancy

16.3%

Excluding government and owner-occupied buildings

Rents and recent deals

What space costs right now.

$33 to $43

Asking rent per square foot, 3-Star to 4 and 5-Star buildings

$51

Forecast top-tier rent per square foot by 2030

5.7%

Cap rate on the EDC Building sale, well below the metro average

Where leaders should look

Three opportunities in the next 6 to 12 months.

01

Sublease and surrender activity

Watch for well-located, partially fit-out space returning to the market as departments rationalize portfolios.

02

Quality flight is accelerating

Tenants in older 3-Star buildings have a narrow window to trade up on terms that may not persist.

03

Federal acquisition is selective

Premiums concentrate in ESG-compliant, transit-connected, well-leased assets. Lesser buildings work harder for tenants, which translates to leverage.

Designing for the four-day week

What actually works in workspace.

Privacy on demand

Quiet zones for focused work, available when people need them.

Video infrastructure

Built for colleagues who are not in the room, not bolted on after.

Multi-functional zones

Layouts that flex between independent and collaborative work through the day.

A commute worth making

Space that makes four days a week feel earned rather than imposed.

Market statistics sourced from Costar, 2026 Q2.

A window is opening in Ottawa’s office market. Here is what senior leaders should do with it.

The federal return-to-office mandate is here. Executives have been back five days a week since May 4, and by July 6 the rest of the core public service is expected in the office four days a week. The friction is already showing.

At least four federal departments have publicly admitted they don’t have the space to bring everyone back. Global Affairs Canada is delaying because of a multi-year renovation at the Lester B. Pearson Building. Immigration, Refugees and Citizenship Canada is keeping non-management staff at three days a week until it finds more space. National Defence has warned that workspace will be limited at certain buildings. Several others, including Employment and Social Development Canada, Environment and Climate Change Canada, Justice, Fisheries and Oceans, and Statistics Canada, are still working out whether their footprints will hold.

For Ottawa’s downtown, this is a real moment. Just not the one most commentators are describing.

What the data actually shows

CBD office vacancy currently sits at 11.6%. Take government-owned and owner-occupied buildings out of that number and it climbs to 16.3%. For private-sector tenants and landlords, the higher figure is the one that matters. Asking rents run from roughly $33 per square foot for 3-Star buildings to $43 for 4 and 5-Star buildings, and once free rent and tenant improvement allowances are factored in, effective rents come in lower still.

Meanwhile, older buildings are leaving the inventory. Some are being converted to residential, others repositioned for different uses. The federal government has made its preference for ESG-compliant space clear. Morguard’s reported $148.2 million sale of 129 to 131 Queen Street to the federal government is expected to close in August, and Regional Group’s recent acquisition of the EDC Building came in at roughly $300 per square foot and an implied cap rate of 5.7%, well below the broader metro average.

The next 6 to 12 months

Three opportunities are opening up for occupiers:

1. Sublease and surrender activity will continue as departments rationalize their portfolios. Some organizations released too much space during the hybrid era and are now working to recover it. Watch for well-located, partially fit-out space returning to the market.
2. Quality flight is accelerating. With 4 and 5-Star vacancy at 11.8% today, and top-tier rents forecast to approach $51 per square foot by 2030, tenants in older 3-Star buildings have a narrow window to trade up on terms that may not persist.
3. Federal acquisition activity is selective and indicates where value will concentrate. ESG-compliant, transit-connected, well-leased buildings will command premiums. Lesser assets will continue to work harder to attract tenants, which translates to meaningful negotiating leverage for the right occupier.

Creating space that actually works

The return-to-office mandate is being treated as a logistics challenge. It is not. It is a culture question presented in real estate terms. Returning people to the workstations they left in 2020 will not deliver the productivity or collaboration the policy is meant to generate.

Incredible people deserve amazing space. In practice, that means privacy on demand for focused work, generous video infrastructure for colleagues who are not in the room, multi-functional zones that flex between independent and collaborative work, and a layout that makes the four-day commute feel earned rather than imposed.

The organizations that approach this thoughtfully over the next year will not simply be compliant. They will be the ones their people genuinely look forward to returning to.

RealStrategy partners with people-first leaders to create spaces where more people love to work, fuelling culture, performance, and lasting growth. Learn more at realstrategy.com.

Market statistics sourced from Costar, 2026 Q2.