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What’s Ahead for Ottawa Real Estate in 2026
February 17, 2026 4 Minute Read
Ottawa’s commercial real estate market experienced an uneven 2025, ending the fourth quarter with downtown office vacancy at 15.9% despite improvements over the course of the year. And Ottawa’s industrial availability rate rose steadily throughout 2025 to hit 4.9% in the final quarter, having started the year at 2.9%.
How is 2026 shaping up for the nation’s capital CRE markets? We checked in with CBRE Ottawa Managing Director Maxime Foucaud to see what he’s watching for this year.
Mandates Strengthen Office Market
On the whole Ottawa remains a stable market because we have a strong government employee base, with multiple return to office announcements last year. First we had the banks, followed by the provincial government and the City of Ottawa mandating a full five days back at the office. We are currently waiting for an updated federal government mandate, hinted at by Prime Minister Carney last December in Ottawa. This is a positive leading indicator which isn’t showing up immediately in the statistics but we’re hopeful that in 2026 we’ll see progress in the office market now that we have that clarity.
We’ve found where most companies want to be in terms of office space requirements. Many groups are still downsizing from pre-COVID leases, but we’re getting to the end of understanding what the rationalization of space will look like. Generally the sentiment toward office is positive. Class A / AA is doing well. Much like everywhere else, well amenitized and well located and well taken care of properties will continue to outperform the rest.
We’re seeing a good amount of interest for new office transaction activity; whether it’s leasing, tours or CBRE clients from outside Ottawa, there’s been more velocity. We’re just waiting to see that convert into actual transactions. On the office investment front, as in other Canadian markets, we’re seeing a renewed interest in the office asset class. A number of deals are moving along in the transaction cycle and hopefully we should see completed transactions in the first part of 2026.
Ottawa is just behind Calgary on office conversions. We’ve had several assets converted from office to multi-residential. That’s good for us. On the one hand it removes a fair bit of square footage from the total office space inventory, which helps with the vacancy rate and in removing tired assets from the market. And it helps our downtown with more residential space, which is better for retail and service providers and even offices. So that will be a positive as we move forward in 2026.
Industrial Deals Getting Done
Trade discussions were a big topic of conversation on the industrial occupier side earlier last year. With Ottawa being so close to the border, we were impacted. Canada is looking at ramping up domestic manufacturing as a result of trade talks. But thankfully trade discussion tension has lessened and therefore some industrial deals are getting done with American or global companies.
Ottawa industrial fundamentals remain positive and optimistic. Vacancy remains low and while rates have moved down and it hasn’t been as consequential as in other markets. And we’re positioned to capture more positive transaction activity in 2026. There was a good amount of large leasing transactions in the second half of 2025 and I think that will continue.
Retail Continues to Perform
Retail is one of the favoured asset class whether it’s for investment or leasing. On the investment side, we’ve seen a good number of grocery-anchored or service-oriented retail properties transact. There remains strong interest in those assets among a number of groups.
On the leasing front, new retail plazas are commanding strong rents because of the demand. Service oriented and food and beverage tenants continue to look at new areas of growth or to expand their footprint in Ottawa. They’re looking at these sites and bidding on them competitively, which has been a positive for landlords.
Urban retail continues to do well in Ottawa, too. There is a limited amount of vacant retail space in the city centre. So prime urban retail or high street retail has done very well because of that.
More Multifamily Product Coming
Demand remains high for multifamily product among investors, both public and private. The sector last year was impacted in part by the reduction of immigration and visas for international students. Furthermore, there is still a good amount of product coming online in 2026 that benefited from opportunistic CMHC lending programs.
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