Ottawa-Gatineau Office Market: Q1 2026 Market Snapshot

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Market News

March 30, 2026

Ottawa’s office market in Q1 2026 is increasingly bifurcated: newer, higher-quality, ESG-compliant buildings are performing well, while older inventory faces much higher vacancy and heavier leasing concessions. Overall vacancy sits at 7.1%, but post-2010 buildings are far tighter at 5.0% versus 15.2% for older properties, reflecting a strong tenant preference for modern space.

Federal government downsizing may soften demand in some areas, yet return-to-office mandates and a shift toward sustainable buildings could boost demand for premium assets.

With almost no new speculative construction underway, obsolete buildings being removed, and top-tier assets still trading at strong values, the current market presents tenants with a rare window of negotiating leverage and access to quality space before supply tightens further.

RealStrategy

Ottawa-Gatineau office market

Q1 2026 market snapshot

Data as of March 30, 2026

7.1%

Vacancy rate

$32.28

Avg. asking rent (PSF)

(1.2M)

12-mo net absorption (SF)

0.5%

Rent growth (YoY)

A tale of two markets

The gap between newer and older office buildings is the defining feature of Ottawa’s market right now. Quality matters more than ever.

Built 2010 or later

5.0%

vacancy rate

Built before 2010

15.2%

vacancy rate

Asking rents by building class

Premium space commands a significant premium. Net effective rents in older buildings are even lower due to generous tenant inducements.

4 & 5 Star

$37.80 PSF

12.2% vacancy | 12.6% availability

3 Star

$30.60 PSF

6.0% vacancy | 7.0% availability

1 & 2 Star

$30.97 PSF

2.0% vacancy | 2.3% availability

Vacancy trend (overall market)

Vacancy peaked at 7.1% in Q1 2026, up from a trough of 3.4% in Q2 2020. The market is forecast to gradually improve from here.

’19 ’20 ’20 ’21 ’22 ’22 ’23 ’23 ’24 ’25 Q1’26 ’26F ’27F ’28F ’29F ’30F

Historical Current Forecast

Submarket breakdown

Nine submarkets, each with a different story. Centretown-Byward leads in absorption, while Gatineau and West Central face the steepest headwinds.

Submarket	Inventory (000 SF)	Vacancy	Asking rent (PSF)	12-mo absorption (SF)
CBD	18,943	11.0%	$38.18	(342,730)
Centretown-Byward	13,715	6.5%	$33.97	111,399
East Central	12,242	7.4%	$33.04	(113,376)
Gatineau	18,804	5.0%	$30.06	(493,899)
Kanata	10,981	9.9%	$29.21	(133,564)
Northeast Ontario	4,662	1.0%	$26.96	86,820
Papineau-Pontiac	145	0.4%	$29.13	(597)
Tunney’s Pasture	6,768	3.0%	$33.54	(28,690)
West Central	13,236	7.4%	$29.71	(289,922)

Construction pipeline: nearly empty

Development has ground to a halt. Only three buildings are under construction, and all are fully pre-leased. Meanwhile, older buildings are being demolished and converted to residential.

Buildings under construction

110K

Square feet (0.1% of inventory)

100%

Pre-leased

Net deliveries over the past 12 months: -290,000 SF. Demolitions are outpacing completions as obsolete stock is removed. Example: 110 O’Connor St (200,000 SF, built 1970) was demolished in June 2025, now being replaced by a 26-storey residential tower.

Notable transactions

Recent sales reveal the bifurcation: best-in-class assets command strong pricing, while older stock trades at steep discounts.

EDC Building, 150 Slater St

$143.5M

~$300/SF | LEED-Gold, built 2011 | 100% occupied by Export Development Canada | Acquired by Regional Group, Feb 2026

129-131 Queen St

$148.2M

305,000 SF | Government commitment to purchase from Morguard | Closing Aug 2026 | Signals government pivot to modern space

$325M

12-month sales volume

$251

Avg. sale price per SF

6.8%

Avg. cap rate

Looking ahead: what to watch

For people-first leaders thinking about their workspace strategy, Q1 2026 presents both complexity and opportunity.

Government return to office

A 4-day in-office workweek starting summer 2026 could create a shortage of modern, ESG-compliant government office space, benefiting premium buildings.

Supply contraction

With virtually no new construction and ongoing demolitions of obsolete stock, the supply-demand balance is set to gradually improve over the next several years.

Private-sector tailwinds

Government capital spending in AI, defence, infrastructure, and housing is expected to lift demand from Ottawa’s tech and professional services sectors.

Tenant-favourable conditions

Generous inducements, rising sublease absorption, and longer lease terms signal a window for organizations to secure quality space on favourable terms.

RealStrategy

Love, Work, and Amazing Space.

realstrategy.com
Data sourced from CoStar Group
Licensed to RealStrategy

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