FIGURES|OTTAWAOFFICE|Q42025CBRE

Markethasachievedclarityfor2026despite

vacancyuptick

13.2%v-240K36KA$17.44

VacancyRateSFNetAbsorptionSFUnderConstructionPSFNetAskingRentalRate

Note:Arrowsindicatechangefrompreviousquarter.

MarketSummary

-Ottawa’svacancyraterecordedaquarter-over-quarterincreaseof40basispoints(bps)from12.8%to13.2%,equatingto240,000sq.ft.ofnegativenetabsorption.Newvacanciesstemmedfromamixofpublicsectortenantssheddingspaceandprivatesectortenantsright-sizingtheirportfolio.

-495RichmondRoad,whichcametomarketfullyvacantinthepreviousquarter,hasemergedasthenextconfirmedoffice-to-residentialconversionproject.Theseven-storeybuildingwillsee111,000sq.ft.convertedinto143residentialunits.Otherpotentialconversionprojects

thatremainintheplanningprocessincludetheJacksonBuildingat122BankStreet,240BankStreet,and396CooperStreet.

-Withanewfederalbudgettabled,themarkethasgainedmoreclarityonthegovernment’splansfortheirofficeportfolio.Thebudgetfocusesonausteritywithplanstoreducethesizeofthefederalpublicserviceby40,000jobsby2028or2029viajobcuts,attrition,andearlyretirement.Additionally,thefederalgovernmenthashintedatanupdatetotheircurrent

return-to-officepolicies,insinuatingthattherecouldbedifferentlevelsofreturnbasedonseniority,capacity,androle.

FIGURE1:OttawaOfficeMarketFundamentals

NetAbsorption&NewSupply(000sSF)VacancyRate(%)

800

600

400

200

0

-200

-400

-600

-800

Q1Q2Q3Q4

Q1Q2Q3Q4

Q1Q2Q3Q4

Q1Q2Q3Q4

Q1Q2Q3Q4

Q1Q2Q3Q4

2020

2021

2022

2023

2024

2025

16.0%

12.0%

8.0%

4.0%

0.0%

-4.0%

-8.0%

-12.0%

-16.0%

NetAbsorptionNewSupplyVacancyRate

Source:CBREResearch,Q42025.

1CBRERESEARCH?2026CBRELimited

FIGURES|OTTAWAOFFICE|Q42025

2CBRERESEARCH?2026CBRELimited

PublicandprivatesectorvacanciesresultinFIGURE2:HistoricalAnnualizedNetAbsorptionfortheCentralandSuburbanMarket(000sSF)

availabilityuptick

Closingout2025,Ottawarecordeda40bpsquarterlyincreaseinthevacancyrate,risingfrom12.8%to13.2%.Thisequatesto

240,000sq.ft.ofnegativenetabsorptionandayear-to-date

negativenetabsorptionof498,000sq.ft.Somelargelistingsbythefederalgovernmentandshadowvacanciesfromtheprivatesectordrovethismovement.Weightedaveragenetrentalrateshave

continuedtoremainrelativelyconsistentat$17.44persq.ft.

Inthecore,thevacancyrateroseby140bpsfrom13.4%to14.8%

withaquarterlynegativenetabsorptionof213,000sq.ft.Large

blocksofvacanciesemergedfromthefederalgovernment,with

119,000sq.ft.comingfromtheirofficesat333LaurierAvenueWestand34,000sq.ft.at222QueenStreet.Accordingly,theClassA

vacancyrateobservedaspike,goingfrom11.4%to13.1%.

Additionally,weightedaveragerentsdecreasedfrom$24.36persq.ft.to$23.73persq.ft.,affectedprimarilybytheaskingrentsat333LaurierAvenueWest.

InKanata,thevacancyratesawaminoruptickby20bpsfrom

14.9%to15.1%withaquarterlynegativenetabsorptionof12,000sq.ft.ListingssuchasMarvellTechnologyat340LeggetDriveand

Deloitte/Innovapostat365MarchRoadcontributedtothevacancythisquarter,adding106,000sq.ft.ofvacantspacethisquarter.

However,thiswasoffsetbypositivetransactionalactivity,suchastheremovalofDeloitte/Innovapost’ssublistingat425LeggetDriveaswellasthesaleof362TerryFoxDrivefromKRPPropertiestoSantecCanada.

1,000

800

600

400

200

0

-200

-400

-600

-800

20152016201720182019202020212022202320242025

CentralSuburban

Source:CBREResearch,Q42025.

FIGURES|OTTAWAOFFICE|Q42025

3CBRERESEARCH?2026CBRELimited

Federalbudgetoffersaroughblueprinttohelp

shapefuturemarketexpectations

Therecentfederalbudgethasprovidedsomemoreclarityforthemarketinvisualizingthedirectionthegovernmentisheaded

regardingtheirofficeutilizationplans.Thishastheaddedbenefitofacceleratingdecision-making,withthecurrentadministration

workingtowards

workforceadjustmentsofthepublicsector

aswellasa

potentialreturn

-

to

-

officebasedontheirposition

.

PSPC’slongtermplanisto

reducetheirofficeportfolioby50%over

10years

,althoughaninternalaudithasshownthatthefederal

governmentwouldonlybeontracktoreduce30%

atitscurrent

rate.Sincemid-2022,theOttawa’sofficemarkethasrecordedat

least1.4millionsq.ft.offederallyleasedspacecomingtomarket.

Whilesomeofthesespaceswererelocationsorexpansionsthatgotreabsorbed,mostotherinstancesrepresentthegovernment

downsizingtheiroverallfootprint.Inselectcases,someofthese

vacantbuildingswerebeingconvertedtoresidentialunits,suchasCRA’spreviousspaceat360LaurierAvenueWestandNav

Canada’sformerofficesat77MetcalfeStreet.

Anewanalysishasshownthat

increasedin

-

officepresencewould

runintoconflictwithPSPC’scurrentworkplacemodel

asmorethan50%ofthestaffdonothavetheirownassignedworkspace.Astheypotentiallyshifttowardsreturn-to-office,theirhotelingsystem

wouldlikelycreateconflictswiththecurrentnumberofemployees,requiringconcessionsoneithertheircurrentfootprintortheir

workforce.Inlightofthegovernment

cancelingtheirco

-

working

contract

and

cutting40,000jobswithinthreetofouryears

,the

outlinedfederalbudgetpromisesausteritywhilecatalyzing

investments.Atitscore,policiesshouldensurethattheyareabletofindthebalancebetweenachievingfiscalresponsibility,maximizingproductivityandequity,anddeliveringontheirresults.

FIGURE3:CumulativeTotalofLeasedOfficeVacanciesThatCametoMarketbytheFederalGovernment(000sSF)

1,600

1,400

1,200

1,000

800

600

400

200

0

*DataincludesknownofficevacanciesbyGovernmentofCanadadepartmentsandcrowncorporationsSource:DirectoryofFederalRealProperty,CBREResearch,Q42025.

FIGURES|OTTAWAOFFICE|Q42025

4CBRERESEARCH?2026CBRELimited

Office-to-residentialconversionsandfuture

worktrendscontinuetoberelevant

Onenewoffice-to-residentialconversionprojecthasemergedat

495RichmondRoad,theformerofficefortheCanadianInstituteforHealthInformationwhichcametomarketfullyvacantlastquarter.Theseven-storeybuildingwillsee111,000sq.ft.convertedinto143residentialunits.OtherpotentialconversionprojectsthatremainintheplanningprocessincludetheJacksonBuildingat122Bank

Street,240BankStreet,and396CooperStreet.Although

conversionscanbeanenticingmethodforrepurposingvacantandoutdatedofficeassets,

theprocesscomeswithamyriadof

considerations

suchasengineeringchallenges,environmentalfactors,andcompliancewithmunicipalregulations.Assuch,

adaptivereusehasservedasaspecializedsolutionforlandlordswhocansolvefortheeconomicsofconversion.Nevertheless,

OttawasitsjustbehindCalgarywiththe2ndmostconversionprojectsinCanada.

Return-to-officeremainedarelevanttopicasconversations

regardingproductivity,work-lifebalance,andworkculturecontinuebetweenemployersandemployees.While

somecompanieshave

achievedasteadystateofofficeutilization

,othersarestillseekingtovampuptheirin-officepresence.AccordingtoStatisticsCanada,morethan80%ofworkersinnon-officeindustries,suchasthoseintheaccommodationoreducationsector,havereturnedtopre-

pandemicnorms,spendingmostoftheirtimeworkingoutsidetheirhome.Othersectors,suchasthoseworkingintheFIREeconomyorprofessionalservices,lagbehind,although

recentreturn

-

to

-

office

announcementsbysomeofthelargeCanadianbanks

willshiftsomeofthesefigures.Companiesandemployeesshouldaimtoachieveaworkplacestrategythatmaximizesproductivity,efficiency,and

workerretention.

FIGURE4:ProportionofWorkersbyIndustryWhoSpendHalforMoreHoursatTheirWorkLocationOutsideofHome

100%

90%

80%

70%

60%

50%

40%

30%

20%

10%

0%

Accommodation

andFood

Services

HealthCareand

SocialAssistance

Educational

Services

Business,Building

andOther

SupportServices

Public

Administration

Information,

Cultureand

Recreation

Finance,

Insurance,Real

Estate,Rental

andLeasing

Professional,

Scientificand

Technical

Services

*IndustrytypesarebasedontheNorthAmericanIndustryClassification(NAICS)SystemCanada2022Source:LabourForceSurvey,StatisticsCanada,CBREResearch,May2025.

FIGURES|OTTAWAOFFICE|Q42025

5CBRERESEARCH?2026CBRELimited

FIGURE5:NotableOfficeLeaseTransactions

Size(SF)

Tenant

Address

Market

20,000

MNPLLP

343PrestonStreet

Tunney’sPasture

13,000

BirdConstruction

1600CarlingAvenue

Woodward/Carling

12,800

TCCCanada

1000InnovationDrive

Kanata

Source:CBREResearch,Q42025.

FIGURE6:OfficeMarketStatistics

Submarket

Inventory

(SF)

VacancyRate

(%)

AvailabilityRate

(%)

DirectVacancy

(SF)

SubletVacancy

(SF)

NetAbsorption

(SF)

NewSupply

(SF)

UnderConstruction

(SF)

Net

AskingRent

(PSF)

T&O

(PSF)

CentralBusinessDistrict(CBD)

15,188,590

14.8%

15.2%

2,003,543

242,691

-212,861

0

0

$20.02

$21.02

ClassA

10,215,197

13.1%

13.5%

1,115,398

218,029

-164,614

0

0

$23.73

$23.73

ClassB

4,315,349

15.6%

15.9%

660,448

11,743

-24,788

0

0

$16.30

$18.18

ClassC

658,044

36.6%

37.3%

227,697

12,919

-23,459

0

0

$12.64

$15.99

Central(Excl.CBD)

2,846,230

21.9%

23.0%

581,023

42,443

10,546

0

0

$17.11

$16.52

Central

18,034,820

15.9%

16.4%

2,584,566

285,134

-202,315

0

0

$19.37

$20.01

South

3,283,370

7.2%

15.6%

236,497

0

6,932

0

0

$15.41

$15.28

East

4,748,546

9.3%

9.3%

427,958

13,477

19,655

0

0

$15.54

$19.43

West

6,589,292

10.3%

12.5%

647,616

28,763

-56,215

0

0

$16.12

$14.75

DeepWest*7,567,46414.4%16.0%892,979194,424-8,284036,000$14.27$15.21

Suburban

22,188,672

11.0%

13.5%

2,205,050

236,664

-37,912

0

36,000

$15.18

$15.90

TOTAL

40,223,492

13.2%

14.8%

4,789,616

521,798

-240,227

0

36,000

$17.44

$18.12

*Kanatasubmarketmakesupapproximately80%oftheDeepWestSource:CBREResearch,Q42025.

FIGURES|OTTAWAOFFICE|Q42025

MarketAreaOverview

Definitions

VacancyRate:TotalVacantSpacedividedbytheNRA.Calculatedasapercent.

VacantSpace:ThesumofexistingDirectandSubletSpacethatcanbeimmediatelyoccupiedorwithin30days.

AvailabilityRate:TotalAvailableSpacedividedbytheNRA.Calculatedasapercent.

AvailableSpace:ThesumofexistingDirectandSubletSpacethatcanbeoccupied,regardlessofoccupancydate.

NetAbsorption:ThechangeinOccupiedSpacefromonequartertothenextasameasureofmarketactivity.IncludesPre-leasedspaceupondeliveryasNewSupply.

SurveyCriteria

CBRE’smarketreportanalysesofficebuildingsof15,000sq.ft.andabove,acrosstheOttawamarket