‘The core has carried the entire city’: Downtown office vacancy down in second quarter

A new report shows downtown office space vacancy rate dropped to 25% last quarter with over 82,000 sq. ft. now occupied. CTV London’s Bryan Bicknell reports.

Downtown London, Ont. is finally seeing some encouraging numbers when it comes to office vacancy. A new report from commercial realty firm CBRE indicates a gradual return to the workplace is helping bring more people to the core.

That’s good news for downtown business owner Shane Kenneth of Coffee Culture on Dundas Street. Kenneth says the exodus of workers due to the pandemic left many businesses just trying to stay afloat.

“Between the two office towers, there’s 5,000 people. So even if 10 per cent of those go out for lunch, that’s 500 people. And a lot of people don’t go two or three blocks down, they stay in the downtown core. So having everybody back, it breathes new life into the businesses, ‘cause we were struggling,” he said.

According to CBRE, London saw 82,380 square feet of downtown office space absorbed in the second quarter of 2026. The overall office vacancy rate dropped 80 basis points to 25 per cent, largely due to activity in the core.

“Leasing activity happening from tenants either from outside of the core or new to the city,” explained CBRE London Broker and Vice President Greg Harris. “But also, in one instance, one of the downtown landlords invested in their property and converted some less desirable office space into a tenant amenity space,” he said.

He’s referring to the City Centre towers at 275 Dundas St. and 380 Wellington St., which saw a significant drop in vacant office space because of a major conversion project.

The report also highlights an increase in leasing activity in both large office towers and mid-sized office buildings, or class A and B, respectively.

City Councillor David Ferreira, whose ward includes downtown, says he’s encouraged by the downtown’s recovery.

“You saw around 82-thousand square feet recovered, comparatively speaking with suburban areas, I think there was around 32-thousand square feet was lost. So there’s a net variance of around 50-thousand square feet that the core has carried the entire city,” Ferriera pointed out.

London is following a national trend, with the overall Canadian downtown office market now having reached a full year of recovery. Office leasing momentum remained positive for the fourth consecutive quarter.

Greg Harris says it’s a sign the effects of the pandemic are finally starting to ease.

“It’s more of a macro-economic thing that’s happening with the desire to move away from 100 per cent remote and to more of a structured hybrid,” Harris said.