Office space vacancy continues to recover for Calgary, Edmonton markets
Calgary and Edmonton both saw improvements in office space vacancy across downtown and the suburbs to cap off 2023.
According to a recent report by real estate firm CBRE, Alberta’s two largest cities posted consecutive quarters of positive net absorption last year.
The Calgary office market ended the year with a cumulative 677,000 sq ft of positive
net absorption, which is the market’s strongest performance since 2014, according to CBRE.
There was a total of 27.9% vacancy toward the end of 2023 in Alberta’s biggest city.
“Primary demand growth drivers included a slight resurgence of the energy sector, sublease spaces being reclaimed by tenants, as well as purchases by owner-users,” the report reads.
- You might also like:
- Calgary's office-to-residential conversion plan rolls on with three new projects
- Downtown Vancouver office vacancy rate sees improvement
- IWG opening 13 co-working office locations across Canada
A total vacancy of 21.4% was available in Edmonton at the end of last year, and the market had a cumulative 171,173 sq ft of positive net absorption.
“Landlords continue to improve their portfolio with lobby improvements and new amenities as a means of attracting tenants,” CBRE said in the report.
“Rice Howard Place has started its $22 million renovation while MNP Tower recently launched a new amenity floor which includes a lounge, game areas and virtual golf
simulator.”
The report adds that tenants in Edmonton are taking advantage of current market conditions and making flight-to-quality moves, with amenities acting as a major draw.
Converting and repurposing office spaces
CBRE said that repurposing of office properties has been on the rise across Canada since 2021, and 2023 was the largest year yet with a cumulative 2.5 million sq ft of competitive office space.
According to the company, those spaces are most often replaced with residential properties.
That strategy has been implemented by the City of Calgary and its downtown partners to remove 6 million sq ft of vacant office space by 2031.
As of now, there are 17 office conversion projects, which equates to more than 2,300 new homes possible for Calgarians downtown, according to the City.
Follow Channels and Categories