Calgary’s downtown office vacancy rate grew in the fourth quarter of 2025, rising to 30.4 per cent. A new report issued by Caldwell Banker Richard Ellis (CBRE) said that Calgary’s office vacancy rate rose in 2025’s final quarter, despite a number of announced office-to-residential conversions. In January, 2025, a CBRE report pegged Calgary’s office vacancy rate at 29.5 per cent. For its Q4 report, CBRE said increased mergers and acquisitions in the energy industry created consolidation and layoffs that reduced the need for office space. The office market in suburban Calgary showed continued growth, led by a “more diverse tenant base that is less energy industry reliant.” Nine new conversion projects were announced in Q4 2025, with six downtown and three in the Beltline. Industrial leasing strong The report found that the industrial market built momentum throughout the year, experiencing its strongest quarter of net absorption since Q3 2022. In Q4, availability fell to 5.3 per cent, the lowest since Q3 2023. Supply shortages are most acute in the northeast and south central submarkets. And in a year of political volatility, “despite tariff concerns and general economic uncertainty, market availability remained relatively stable throughout 2025.” Nationally, the report said the Canadian office market ended 2025 with “positive net absorption, a measure of office leasing activity that saw 2.2 million square feet of commercial space absorbed.” That was led by the Toronto market, which absorbed 2.7 million square feet, driven by downtown transactions over 50,000 square feet. The national report said that six Canadian cities tracked -- Vancouver, Edmonton, Winnipeg, London and the Waterloo Region -- showed “more signs of stabilization than they did increased momentum.” That meant less than 100,000 square feet of absorption either positive or negative. Edmonton finished the year with an overall office vacancy rate of 19 per cent, down slightly in 2025. ‘Baby steps’ Back in January, 2025, the expectation was that Calgary’s downtown office vacancy rate would drop a percentage point, rather than rising. At the time, Greg Kwong, CBRE’s executive chair for Alberta, said Calgary’s downtown office vacancy rate was slowly moving in the right direction. “It’s baby steps,” Kwong said. “It’s going to take a number of years before we get to any type of equilibrium in the market.” Kwong said an optimal vacancy rate is eight per cent. “That’s where there’s a good mix of vacant space that tenants can move to, and then also landlords can negotiate fairly with any tenants looking,” he said. With files from CTV’s Kevin Green
