Atlantic Canada’s downtown office markets are undergoing a permanent structural shift, according to a new analysis from Turner Drake & Partners.

Turner Drake’s Winter 2025–2026 Atlantic Canada Newsletter feature a review of downtown office conditions across Halifax, Moncton, Saint John, St. John’s, Fredericton and Charlottetown. The review was completed by the firm’s economic intelligence unit.

The lead article, titled “The Goose That Used to Lay the Golden Egg,” examines inflation-adjusted net rents, vacancy and long-term demand trends across class A, B and C office space.

While nominal asking rents in many downtowns appear stable or rising, the analysis finds that real economic rents have been declining for decades, with vacancy absorbing much of the imbalance. Using more than 20 years of semi-annual downtown office surveys and adjusting net rents for inflation with provincial CPI, Turner Drake concluded that real rents peaked years ago in most Atlantic markets and have only experienced brief cyclical recoveries since. In many centres, real rents are now $3 to $6 per square foot below mid-2000s levels, before inducements are considered.

“It’s easy to confuse nominal stability with economic health,” said Jigme Choerab, manager of Turner Drake’s EIU. “When inflation is stripped out, the long-term trend is clear: Downtown office markets are undergoing a structural reset.”

The report shows vacancy, particularly in class A space, has borne the brunt of the adjustment. Halifax saw real class A rents fall roughly $4 to $5 psf from pre-2015 levels, with class A vacancy peaking near 30% before easing. In Saint John, N.B., overall downtown vacancy exceeds 30%, with class A space no longer insulated. In Moncton, post-pandemic vacancy now tops 15% as rents are structurally repriced downward. Nearly one-third of prime space in St. John’s, NL, remains vacant following a commodity-driven boom. Fredericton, N.B., and Charlottetown, P.E.I., remain the most balanced markets, adjusting primarily through occupancy rather than rent erosion.

Beyond real estate fundamentals, the analysis highlights broader fiscal implications. Downtown office buildings underpin municipal tax bases that fund services such as transit, infrastructure and housing.

“When downtown office markets weaken structurally, municipal finances weaken with them,” the article notes. “Ignoring real rent erosion risks overstating fiscal resilience.”

Although vacancy has begun to decline in some centres, Turner Drake cautions against expecting a return to pre-2010 conditions. Hybrid work, smaller office footprints and sectoral shifts have structurally reduced long-run demand per worker, pointing to a future of gradual consolidation in which adaptable, amenity-rich buildings remain viable while obsolete stock continues to struggle without reinvestment or conversion.

“The downtown office market isn’t disappearing,” said Jigme. “But it is changing — permanently. Markets that recognize this early will fare far better than those waiting for conditions that no longer exist.”

Turner Drake is a Canadian real estate consulting firm specializing in valuation, property tax, counselling, planning, economic intelligence and space measurement services, with offices in Halifax, St. John’s, Charlottetown, Saint John and Toronto, serving clients across Canada.