CALGARY, ALTA. – While Canada’s office market is still recovering from the COVID-19 pandemic and a subsequent hybrid work model, Calgary is showing signs of recovery, according to a new Avison-Young report.
The company’s Q2 2023 Calgary office market report detailed the city’s office market has a 24 per cent overall vacancy rate, down 0.5 percent year-over-year, with an overall downtown vacancy rate of 27.3 per cent, down 0.8 per cent year-over-year.
“For Calgary, there is a uniqueness to the local situation. In many ways, the local market has already begun to adjust to the shocks impacting the office sector. Vacancy has declined, absorption has been on a positive trend, and tenants are flocking to amenity-rich A and AA class properties. Regarding office conversions, Calgary’s program is already several steps ahead of many of its peers,” the report stated.
The report pointed out the Calgary office market, hit before the global pandemic by an oil and gas downturn, has been “dealing with these issues for a longer time than most,” and that the local economy is ticking upwards due to increased immigration and growing employment.
Avison-Young stated market stabilization continues in Q2 2023 with the Calgary office market experiencing a moderate quarter relative to this time last year. The downtown area saw 72,000 square feet of negative absorption, bringing year-to-date absorption to effectively nil, and the vacancy rate remained flat at 27 per cent.
The Beltline area continues to struggle, the report said, with -5,000 square feet of absorption and a slight increase in vacancy to 26 per cent. The suburban market saw negative absorption in the south and positive absorption in the north for a net gain of 21,000 square feet.
Removal of inventory due to several recent sales of repurposed buildings contributed to a drop in vacancy in the suburban north.
The full report can be read here.