Vancouver Tech Industrial Real Estate: Q1 2025 Market Insights

The industrial real estate landscape in Metro Vancouver is shifting, and tech companies must stay ahead of these changes to make strategic decisions about their real estate needs. The CBRE Q1 2025 Vancouver Industrial Figures report highlights key trends that directly impact the Vancouver’s industrial, manufacturing and tech sector, from fluctuating vacancy rates to evolving lease opportunities.

Vacancy Rates & Lease Trends

Metro Vancouver’s industrial vacancy rate fell to 3.7% in Q1 2025, driven by large lease transactions toward the end of the quarter. Availability also decreased to 4.9%, signaling a stronger appetite for well-located industrial spaces. This is good news for tech companies looking to establish or expand industrial operations, as it indicates that prime locations are being absorbed, and competition for quality space may increase.

However, despite this positive shift, the market is still in a state of transition. High availability rates in recent years mean that while some areas are stabilizing, others remain uncertain. Tech companies looking for new spaces should act strategically to secure leases in areas showing signs of recovery.

Rental Prices: An Opportunity for Tech Firms

One significant takeaway from the Q1 2025 report is the continued decline in asking net rents, now averaging $19.96 per square foot. This marks the fifth consecutive quarter of rent decreases, making it an ideal time for tech companies to negotiate leases or renewals, particularly if seeking large, flexible spaces for R&D or light manufacturing.

The distinction between the north and south of the Fraser River is crucial for tech firms. Areas closer to Vancouver’s urban core still command higher rents (above $20.00 per sq. ft. net), while more affordable options (under $20.00 per sq. ft. net) are available in southern markets. Balancing location with cost-effectiveness will be key, especially for companies requiring proximity to talent pools, transit, and amenities.

Sublease Opportunities: Flexible and Cost-Effective

Sublease inventory grew by 9.2% in Q1 2025, now accounting for 18.5% of total available space. For tech firms needing short-term or flexible space—for project-based work or testing new products—these could be practical options. Subleasing often comes at a lower cost and can provide short-term occupancy without long-term commitments.

The Tariff Challenge: Mitigating Supply Chain Risks

American tariffs introduced in early 2025 have created uncertainty within the Metro Vancouver industrial market. While some companies are securing large spaces in anticipation of potential supply chain disruptions, others are pulling back. Tech companies reliant on U.S. components or distribution should assess the impact of tariffs on their operations and consider securing industrial space closer to ports or logistics hubs to reduce cross-border risks.

Strategic Takeaways for Tech CEOs

1. Capitalize on Lower Rents: The decline in average asking rents presents a unique window to secure high-quality space at favorable rates. Consider negotiating longer-term leases to lock in these lower costs.

2. Explore Sublease Options: Given the increase in sublease availability, tech firms needing flexible space should investigate short-term deals, especially in desirable locations where direct leases may still be costly.

3. Monitor Tariff Impacts: Stay updated on trade policies that may affect supply chain operations. Consider diversifying space to include both urban core areas and more cost-effective sites south of the Fraser River.

4. Act Fast on Prime Locations: Areas like Burnaby and Richmond are seeing increased demand but still offer lower rates compared to the urban core. These locations can be strategic for companies needing warehouse or light manufacturing space while staying connected to the city and transit.

5. Manufacturing Inventory is Rising: From nearly 0% vacancy, there is finally some availability for technology manufacturers to take advantage of true manufacturing space with significant power, loading, column spacing and even yard space.

Final Thoughts

The Vancouver industrial real estate market is presenting both challenges and opportunities for tech companies. Understanding these trends can help CEOs make informed decisions on leasing and expansion. As rental rates continue to decline and sublease opportunities rise, now is a strategic time to secure space before the market fully rebounds.

For tailored guidance on securing the right industrial space for your tech company, The High Technology Facilities Group (The HTFG) at CBRE is here to help.  Reach out to connect!

The HTFG: Alain Rivere, Blair Quinn, Kevin Nelson, Andre Ali Day, Amber Sandhu

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