Pull up any major brokerage's Q1 2026 Metro Vancouver office report and the numbers look, if not comfortable, at least workable. Downtown Class-A vacancy is reported in the 9 to 12 per cent range. The Broadway Corridor shows availability climbing as new supply comes online. For a tenant shopping for space, or an investor underwriting an acquisition, those figures imply a market with meaningful choice.
They may be wrong—not because brokerages are being dishonest, but because the methodology behind those numbers systematically counts space that no standard tenant can actually use. This is the ghost inventory problem.
At its core, the issue is definitional. When a major brokerage marks a floor as "available," that designation can apply to four materially different situations: direct vacant space ready for immediate occupancy; sublease space offered by an existing tenant, often with restrictions on permitted use, term length, and fit-out contributions; space subject to a holdover arrangement where the current occupant is month-to-month; and space in a building with an active demolition or redevelopment permit. Major brokerages including Colliers International aggregate these categories into a single availability figure in their headline market summaries, with distinctions buried in methodology notes that many tenants and investors overlook.
The practical consequence is that a tenant who enters a lease negotiation believing vacancy is 11 per cent may be negotiating against a true fungible supply closer to 8 or 9 per cent. That gap shifts leverage quietly and in favour of landlords.
What the numbers hide
Sublease space is the largest distorting factor. When a tech company that leased 40,000 square feet in 2021 lists half of it for sublease, that space enters the availability pool. However, sublease arrangements carry fundamentally different risk profiles than direct leases. The term is capped by the head lease expiry, the sublandlord may retain termination rights, and tenant improvement allowances are typically absent. Industry documentation from firms including Avison Young acknowledges that sublease and direct space carry different risk profiles, yet the two are routinely combined in the vacancy figures that lead press releases and earnings presentations.
Holdover arrangements add a second layer of opacity. A tenant whose lease has expired but who continues to occupy space on a month-to-month basis keeps that floor off the market in practice, while the landlord may simultaneously list it as available in anticipation of the tenant's departure. The space appears in supply figures, but it is not accessible.
Then there are the demolitions. The City of Vancouver's permit database shows a material increase in demolition and redevelopment applications along the Broadway Corridor—a submarket that has seen some of the highest reported availability increases in recent quarters. Space in a building with an active demolition permit should not be counted as fungible supply, yet in some cases, it is.
The Broadway Corridor case
The Broadway Corridor illustrates the problem concretely. The submarket has attracted significant attention as the Broadway subway extension reshapes development economics. Reported availability figures have risen alongside a surge in new development applications. But a closer examination of BC Assessment property records and City of Vancouver permit filings suggests that a portion of the listed available space sits in properties where owners are pursuing rezoning or demolition rather than re-leasing.
For a tenant being told that the Broadway Corridor offers abundant choice, the reality on the ground—space that can be occupied, on a direct lease, within 90 days, with standard landlord contributions—is considerably tighter.
Why the methodology persists
Brokerages operate under industry-standard definitions developed by organizations including NAIOP and adopted across North American markets. Those standards were built for a different era—one with less sublease overhang, fewer holdover situations, and cleaner lines between available and unavailable space. The pandemic-era wave of sublease listings, combined with a construction pipeline that has outpaced absorption in several submarkets, has exposed the limits of a methodology that was never designed to handle this degree of complexity.
The brokerages themselves often provide granular breakdowns—direct versus sublease, weighted average lease terms, pending demolitions—in the full-text versions of their market reports. The problem is that headline figures, press releases, and the data feeds that flow into investor models typically carry only the aggregate number.
What tenants and investors should do
The gap is navigable for those who know where to look. Tenants entering lease negotiations in downtown Vancouver or the Broadway Corridor should request a breakdown of available space by type—direct, sublease, and holdover—before assessing their negotiating position. They should cross-reference listed properties against the City of Vancouver's active permit database and ask their advisers explicitly: how much of this availability can I actually occupy, on a direct lease, within 90 days?
Investors underwriting acquisitions should treat headline vacancy figures as a starting point, not an input. The difference between 11 per cent reported vacancy and 8 per cent fungible vacancy is not a rounding error—it is a capitalization rate conversation.
The data exists to build a clearer picture. It is not hidden; it is simply not in the headline.
