Downtown Vancouver office vacancy hit a 21-year high during the third quarter, says a new CBRE report.

Vacancy in the node increased for the second straight quarter, to 12.6%, a 70-basis-point rise quarter-over-quarter. Vacancy increased in all downtown space classes except class A, which experienced a 50-bps decrease. The class A decline was primarily due to Lululemon’s 290,000-square-foot lease at 725 Granville Street, where the yoga-wear company absorbed about 70,000 sf of vacant space.

“Vancouver’s class AAA and A office market is experiencing a transformation,” said CBRE.

Lululemon’s lease demonstrates ongoing demand for premium space but shifts in tenant demand are moderating the overall market, according to the commercial real estate advisory firm. In the third quarter, all 165,650 sf of the region’s new supply was delivered in the suburbs.

Downtown class AAA and A sublease availabilities increased during the period, but they remain below their five-year averages and well under their historical peaks.

Much of the class AAA and A vacancy is being driven by Telus listing 87,779 at Telus Garden for sublease. Availability has also been pushed upward by Amazon’s upcoming move out of 160,000 sf at Telus Garden and into the nearby Post, where the global giant is consolidating its local office operations in coming months.

Despite the vacancy increase, the overall average net downtown asking rent remained flat quarter-over-quarter. It was down less than $2 per sf year-over-year, falling to $36.50 psf from $38.12 psf.

Pictured: Downtown Vancouver office buildings.

Photo: Shutterstock