Through the July-September period, a degree of normalcy began to emerge with leasing activity showing early signs of thawing after a period of relative inactivity. While far from pre-COVID levels, businesses began to wade (tentatively) back into the leasing market. While more pronounced in the warehouse leasing market, office tenants we're also more active, although widespread remote working by many office workers continues to have a highly negative influence on the office leasing market.
The region's office vacancy rate increased by almost a fully percentage point [90 basis points (bps)] during the quarter to register 5.7%, a level not seen seen the third quarter of 2018. Most of this increase was due to the downtown market where the vacancy rate increased by 1.6 percentage points to finish the quarter at 5.3%. By contrast, Metro Vancouver's industrial market saw conditions once again become more restrictive for tenants with the overall availability rate decreasing by 50 bps to 2.2%. During the quarter, rents also moved in opposite directions with region-wide office rates dropping by 1.8%, while industrial lease rates increased by $0.32 per square foot.