Montreal’s commercial real estate market in Q1 2026 shows mixed signals: office vacancy remains elevated while retail and mixed-use segments demonstrate recovery. Investment activity is picking up as interest rates stabilize, creating opportunities for strategic buyers.
14.8%
Office vacancy
5.2%
Avg cap rate
+8% YoY
Retail recovery
$2.1B
Investment volume
Office Market
Downtown office vacancy sits at 14.8%, creating a tenant’s market with generous concessions. Class A buildings maintain stronger occupancy while Class B/C face conversion pressure. Sublease space is declining, a positive leading indicator.
Retail Recovery
Street-level retail along Sainte-Catherine, Mont-Royal, and Old Montreal corridors has rebounded 8% year-over-year. Pop-up and experiential retail are driving new lease signings. Food and beverage tenants continue to dominate demand.
Investment Activity
Transaction volume reached $2.1B in Q1, up 15% from Q4 2025. Stabilized interest rates are bringing institutional buyers back. Mixed-use properties with residential components command the highest pricing.