The fourth quarter was again very sluggish with office leasing activity down at levels not seen since the depths of COVID. Contributing most to anaemic leasing conditions was the bell-weather downtown market, where a further surge in sublease space pushed the availability rate up to 12.5%. This represents the highest availability rate since the early 1990’s. The downtown vacancy rate also increased during the quarter, finishing at 10.2%, the highest since the fourth quarter of 2004 (11.2%). Both the availability rate and vacancy rate are expected to rise further in the coming quarters, possibly testing levels last seen in the late 1980’s. With the imbalance between supply and demand set to only increase, rents, and in particular net effective rents (NERs), could easily fall by as much as 25%. This will represent a sea change for the Vancouver office market.