CALGARY – Calgary office space showed positive growth in Q3 2024 with downtown leading the way with 204,948 square feet of positive absorption.
The majority of downtown absorption was class AA office space, according to a new Avison-Young report, bringing the vacancy rate down to 24.5 per cent.
A class market also performed well with 58,597 square feet absorbed but there was minimal activity in the class B and C markets, the report said.
“The next round of funding for residential conversion was approved by city council, providing a new pool of incentive funding for residential conversions. It’s expected that several new residential conversion projects with be subsequently announced,” the report said.
An overall trend of steady decline in sublet space availability at 3.8 per cent “is another indicator of strong demand for top-tier office spaces, along with limited availability for built-out spaces that can be occupied on short notice,” the report added.
The Beltline office market recorded 90,286 square feet of positive absorption in Q3 2024 with leasing activity strong in class A and B spaces, which saw 36,179 and 39,627 square feet absorbed respectively. The Beltline has shown marginal improvement in 2024 as the area competes with Calgary’s downtown, the report said.
The suburban Calgary office market recorded an overall vacancy rate of 16.9 per cent with an absorption of 11,313 square feet in Q3 2024. Leasing activity was higher in the suburban north with 35,759 square feet absorbed, compared to negative absorption of 24,446 square feet in the suburban south.
The suburban markets remain stable, with less fluctuation in vacancy rates compared to downtown and continues to attract tenants looking for office spaces outside the core city areas, the report said.
The full report is available here.
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