A new report from CBRE Canada says office space in Calgary has seen a decline in vacancy, and suburban office spaces are leading the charge. Since the start of 2025, there has been 1.1 million square feet of net absorption in the suburban office market, creating a one per cent decline in the second quarter of 2026, as suburban office space vacancy now sits at 16 per cent. “What’s been driving the suburban absorption this year has been the construction industry, engineering and public services--so any government agencies,” said Michael Hoffman, managing director of CBRE Calgary. “It’s really due to the population growth we’ve had over the last three to five years. Additional services are required in the suburbs; that’s where the population is growing.” Downtown offices have held steady in the 29 to 30 per cent vacancy range, although Hoffman notes Calgary’s downtown office conversion program has been a vital tool in addressing what the CBRE report calls “downtown Calgary’s chronically high vacancy rate.” However, potential decreases in downtown vacancies are often offset. “The office conversion program that’s happening in Calgary has taken away about 3.6 million (square feet) of inventory, so that would bring our vacancy down three to five per cent. However, that hasn’t occurred because of the sublease space coming onto the market, which has muted all that, keeping it (vacancy) at 29 to 30 per cent, which you expect for the next couple of years,” Hoffman said. Some areas like International Avenue have been enjoying the positive impacts of lower vacancy. Alison Karim-McSwiney, International Avenue BRZ executive director, says it’s a very tight rental market with few vacancies, noting a variety of businesses have moved in to contribute to a thriving local business scene. “We have had a number of new businesses move in, which is quite exciting, including a bakery and coffee shop, a new clothing store, a travel agency--a number of things like that,” Karim-McSwiney said. Karim-McSwiney says the surrounding area has seen more construction due to Calgary’s population growth and continually expanding suburban areas, a fact she expects will provide a healthy environment for local business to grow. “We have had a lot of new builds that are happening (and) a number of new units that have come in. We also have some apartments that are happening where they just broke some ground, and that’s about 600 new residents coming in, so you’re seeing a densification that I think will really help the businesses in the long run,” Karim-McSwiney said. However, tight rental markets and low vacancies can often create high rent prices, a problem Ayu’s Boutique on International Avenue is facing. “If it goes on the way it is right now … I’m just waiting for my lease to come up. If there is no other chance, I have to leave,” said Ikram Ahmed, Ayu’s Boutique owner. Ahmed says because Calgary is a growing city and a city that is becoming increasingly diverse, she believes the government should offer more supports toward small businesses and their rent costs to not only keep the small business economy healthy but also create a space for newcomers to thrive. “I want the Alberta government to pay attention to the small businesses and support us. That way, we will have the encouragement to work harder, and our community is growing, especially in Calgary,” Ahmed said. On the industrial side, the CBRE report says 429,000 square feet of new supply were delivered in Calgary this past quarter. Over the past year, that greatly expands to 1.7 million square feet, contributing to 92.6 per cent of all new supply.
