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Reversing trends: Montréal office space in 2026
One of the biggest challenges for companies is attracting and retaining talent. This has become more acute as the work-from-home and hybrid trend reverses; some larger companies, particularly in the tech, banking and government sectors, have mandated a return to the office (RTO). Some employees, however, are reluctant to return. Companies are employing a carrot-and-stick approach: the stick is the RTO mandate, and the carrot is making the office an attractive place to go by amenitising the space and making it more attractive.
“It’s just because of the highs of the previous years, where we were seeing sometimes 20 to 30 per cent rent growth on an annualized basis. But if you had told someone 20 years ago, rents would be $14 a square foot and vacancy as low as five to seven per cent, they would say ‘you’re crazy’” “If you told that same person two years ago the same thing, they would say, ‘Oh my, the market’s going to crater.’ And that just tells you how much the market has moved.”
Why the way to value office space must change
A balanced market, adds Mark, needs some room for tenant movement. “A seven per cent vacancy, generally speaking, is a healthy market.”
David Salomon-Lima Senior Vice President at Savills
The latter was one of the drivers of the flight-to-quality that the real estate office market saw post-pandemic.
In last year’s Canadian Real Estate Forums, the conversation around office centred on flight to quality and the amenitisation of office space, but also on the fact that tenants were leasing less space. If only half your workforce is in at any given time, why have all that empty space? THE RESURGENCE OF OFFICE But in 2026, there are signs that this trend is reversing. David Salomon-Lima, Senior Vice President at Savills and a moderator at the Montréal Real Estate Forum this year, explains why: “I think tenants are still trying to figure out what they need. It’s a question of making sure you come to the office and feel good while you’re there, that you have room to collaborate, that you can concentrate, and that you feel like it’s worthwhile to leave the house.” What this means this year and beyond, says David, is that there needs to be a rethink of how office space is valued, moving beyond cost per square foot.
While the market is volatile, opportunities exist for those who are cautious, fast, and data-driven, not headline-driven. Mark advises that investors must look past the headline noise, which often creates disproportionate volatility: “If I read the headlines today, we’re still talking about a housing shortage. If I look at the data, we’ve got a 10 per cent vacancy rate. You tell me which? If you’re buying based on the headlines, you’re buying into a story where there’s a shortage.”
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Opportunities exist, concludes Mark, for those willing to look beyond the short term.
“I cannot tell you how many battles we have had, explaining to all parties that we need to move the deal forward. It’s the old acronym time kills deals, and it could not be truer in this environment.”
■ Alex Gray
realestateforums.com
realestateforums.com
Canadian Real Estate Forums / Spring 2026 24
Canadian Real Estate Forums / Spring 2026 25
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