Q1 2025 Office Market Newsletter
At a Glance
In 2024, the Greater Montreal Area office market showed early signs of stabilization amid ongoing challenges. The overall vacancy rate held steady at 18.1% for the first time since Q1 2020, while the average net asking rent declined to $19.25 PSF (-1.5% QoQ, -3.8% YoY). Hybrid work trends continued to impact Class B and C properties, but a “flight to quality” kept demand for Class A buildings strong and Class AAA vacancy rates relatively low. Suburban markets benefited from work-from-home trends, driving stabilization in those areas. Leasing activity focused on smaller spaces (3,000–5,000 SF), reflecting tenants’ preference to optimize workspace needs.
2025 Outlook
The Greater Montreal Area office market is expected to remain tenant-favorable in 2025, with high vacancy rates continuing to place downward pressure on rents. Tenants will likely maintain significant leverage to negotiate lower rents, generous concessions, and flexible lease terms. Demand for Class A and AAA properties, particularly those close to public transportation, is anticipated to remain strong as companies prioritize premium, welllocated office spaces. While hybrid work remains a key trend, many organizations are strategizing ways to enhance the office environment for employees. This includes introducing new company incentives to encourage in-office attendance, fostering a more organized structure for employees’ work schedules, and creating attractive, collaborative workspaces to support evolving workplace dynamics.
Today, the value of the workplace is less about the number of tasks people complete in the office, and more about how well the physical space supports the relationships that drive great work. Reattaching — not just returning — to the office will primarily focus on strengthening relationships rather than just performing tasks. Higher-quality spaces that offer a broader range of work settings to support key interactions will enhance the social vibrancy of the environment.
81% of employees want location flexibility
93% of employees want schedule flexibility
85% of employees want time in the office
What a real estate broker brings to a transaction
Our expertise Space users often commence negotiations from a challenging standpoint, much like the unpredictable nature of the stock market.
Our team is here to support and navigate tenants through this dynamic landscape of commercial real estate, constantly monitoring market fluctuations.
