It's believed the fire broke out behind the Royal Bank around 5:30 a.m. PT and quickly spread between floors and into the attic of the Evergreen Mall.
No one was injured, but several firefighters had to quickly leave the building before its floor and roof collapsed. Sooke fire chief Steven Sorensen says investigators consider the fire suspicious.
Sooke Mayor Wendal Milne says part of the highway leading into the town was closed and he's asking residents to use as little water as possible.
"Because of the amount of water they have used, they have gotten the reservoir just about dry," said Milne.
"People at a higher level will have no pressure in their houses. Once the firefighting is over with — about two hours it will take to replenish the reservoir."