Montreal’s downtown class B office market is showing signs of renewed activity, as availability dropped to its lowest level in nearly two years during the first quarter of 2025, according to Avison Young’s first quarter office market report.

The downtown class B availability rate declined by 80 basis points quarter-over-quarter, reaching 20.5%—the lowest level since the second quarter of 2023. This marks the first quarterly decline in a year and suggests a modest spillover in demand from class A spaces.

Despite this shift, demand continues to favour class A offices, which offer newer infrastructure, more amenities, and better energy performance. Tenants seeking to upgrade their space are still primarily targeting these premium buildings, particularly in prime downtown locations.

As a result, class A buildings are leading leasing activity, while the class B segment is only now beginning to benefit from the gradual return-to-office momentum.

Across the Greater Montreal Area, the total office availability rate fell for the third consecutive quarter, landing at 18.3% in the first quarter, down 50 bps from 18.8% at the end of 2024. This continued downward trend points to cautious optimism in the leasing market, according to Avison Young.

A key insight from the report reveals that almost half of all downtown vacancies are concentrated in just 8% of office buildings. Many of these properties are not being actively marketed as they are under consideration for conversion or redevelopment, creating a form of “artificial vacancy” that inflates availability figures.

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