The office market has been written off plenty of times since the pandemic. And yet, in Montreal, vacancy has been falling for a year and top-tier space has never leased for more. Here's what that turn means, including for an owner or a tenant on the South Shore.

The office market has stopped falling

For three years, the question that came up most often when I talked with investor clients was the same: does anyone still want an office? The second-quarter numbers give a clear answer. According to CBRE, the Greater Montreal office vacancy rate stands at 18.0% in Q2 2026. That may sound high, but it's the lowest level since the second quarter of 2023. And if you set aside space that's been listed for more than 36 months, the stuff nobody is really trying to lease, the real rate drops to 12.4%.

The trend is national. CBRE calls it a full year of recovery: four straight quarters of positive absorption across the country, a first since the pandemic. Montreal was among the leaders, absorbing more than 300,000 sq ft in the quarter, neck and neck with Toronto and Calgary. Sublet space, that barometer of corporate nervousness, shrank 12.4% in the region to 1.4 million square feet. When companies stop dumping their surplus space, it's because they've started using it again.

18.0%
Greater Montreal office vacancy in Q2 2026, lowest since 2023
300,000 sq ft
Positive net absorption in Montreal for the quarter, among the top markets in the country
2.25%
Bank of Canada policy rate, held for the sixth time in a row

The top tier leads, the rest follows

The recovery isn't uniform, and that's worth saying plainly. It's playing out first in the prestige towers. Net asking rent for Class AAA space is touching new highs, in a range of $33 to $42 per square foot. Headline vacancy in those towers rose to 6.3%, but the real, lease-it-today vacancy fell to 4.8%. In other words, the good new space goes fast, and tenants pay to get it.

Downtown is pulling everything up. Class A and B there have strung together three quarters of positive absorption. This isn't the office exodus people forecast in 2021, it's a sorting. Companies are leaving tired old buildings for something brighter, more efficient, better located. Owners of second-tier product, meanwhile, still have to negotiate hard. That split between the top tier and the rest shows up everywhere, and it maps where the money is going.

The office market isn't coming back, it's sorting itself out. Good space leases high and fast, the rest has to reinvent itself. That's true downtown and on the South Shore alike.

The South Shore connection

You might be thinking all of this happens far away, on the other side of the bridge. Not entirely. When downtown tightens and paying $40 a square foot isn't for everyone, part of the demand looks elsewhere. Hubs like Quartier DIX30 in Brossard offer modern offices, parking, direct highway access and the REM a few minutes away, at rents often around $20 per square foot. For a South Shore small business, staying close to where its people live costs less and keeps staff better.

The cost of money completes the picture. On July 15, the Bank of Canada held its policy rate at 2.25%, a sixth pause in a row. For an investor eyeing an office building, a retail unit or a mixed-use property, that stability makes the return calculation reliable over five years. I broke down the industrial rebound in my piece on falling vacancy, and the wider commercial picture in my mid-2026 update.

What this means for you

  • You own an office or mixed-use building on the South Shore: demand is back, but it goes to quality product. Renovated, bright, well-served space leases. An aging unit will have to cut its price or get a facelift. Before you renew a lease below market, get the real rental value of your asset established.
  • You're looking to invest: the window is in buildings to reposition, where the gap between the top tier and the rest leaves room. With a stable policy rate at 2.25%, the return calculates cleanly. The bet rides on your ability to move a Class B building toward something that ticks today's boxes.
  • You're a business owner looking for space: you still have choice and leverage, especially outside downtown. Good space on the South Shore, in Brossard or Longueuil, will cost you a fraction of a Montreal tower, with parking thrown in. That negotiating room exists today, and it narrows as the market firms up.

I work both sides of the market, residential and commercial, and it's often where the two intersect that the best opportunities on the South Shore reveal themselves. Want to know the value of your building or assess a project? Request a free evaluation or write to me directly. I answer personally.

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