NAI Advent Fall 2025 Market Report
Fall 2025 Market Report – Calgary Commercial Real Estate
Industrial Sector-Strong Recovery and Strategic Growth in 2025
Calgary’s industrial real estate market demonstrated renewed strength through Q3 2025, rebounding from a softer Q2. Net absorption surged to +2.58 million square feet in Q3 after a Q2 decline, while average asking rents climbed to $15.18 per square foot and vacancy tightened to 3.88%. Availability also fell to 4.94%, signaling healthy tenant demand across major submarkets. Investment activity remained steady, with cap rates compressing slightly to 6.92%, reflecting confidence in stabilized fundamentals. Development continues at a disciplined pace, with notable projects such as Pet Valu’s 295,000 SF distribution centre and the YYC AeroNex logistics hub reinforcing Calgary’s position as a strategic Western Canadian logistics node. Looking ahead, vacancy is expected to hover in the mid-4% range through 2026, with modest rent growth and sustained investor interest.
Downtown Office – Flight-to-Quality and Conversion Trends Define the Core
Calgary’s downtown office market remains in a state of transition. Overall vacancy sits between 25% and 27%, slightly higher than earlier in the year but still improved year-over-year. The flight-to-quality trend persists, with AA and A-class assets outperforming older buildings, which face pressure from rising vacancy and conversion activity.
Major corporate moves including Equinor’s lease expiry (124,000 SF) and sublease additions from mergers such as Whitecap Resources and Veren Inc.—continue to shape availability. Despite elevated vacancy, average net rental rates hold firm at $27.67 per square foot, supported by demand for well-located Class A assets. Cap rates average 12.79%, and office-to-residential conversions remain a defining trend, with over 1.7 million SF of obsolete office space being repurposed.
Suburban Office Market – Positive Absorption and Flexible Leasing Drive Momentum
Suburban and Beltline office markets maintained positive absorption through late 2025, outperforming the downtown core. Vacancy declined to 18.1% in suburban areas and 19.2% in the Beltline, with average net rents at $16.40 PSF and $24.60 PSF, respectively. Leasing activity is driven by mid-sized tenants and sectors such as healthcare, education, and social services. Landlords are responding to elevated construction costs with flexible strategies, including turnkey build-outs and extended tenant improvement amortizations. While Southeast availability may rise following Imperial Oil’s space return at Quarry Park, overall fundamentals remain strong. Cap rates average 11.90%, and demand for quality suburban product is expected to persist into 2026.
Multi-Family Sector – Record Completions Reshape Calgary’s Rental Landscape
Calgary’s multi-family market is transitioning toward balance as record completions ease supply constraints. Apartment vacancy reached 6.7% in Q2 2025, the highest among major Canadian cities, reflecting the impact of new inventory. Average rents have moderated, with two-bedroom units at $2,013 and one-bedroom units at $1,643 per month, offering more choice for renters.
Despite higher vacancy, demand fundamentals remain strong, supported by population growth and economic diversification. Over 1.7 million SF of office space is being converted to residential, adding units in transit-oriented corridors. Investor sentiment remains positive, with Calgary continuing to lead Canada in housing starts and purpose-built rental development.
For deeper insights and a full analysis of Calgary’s evolving commercial real estate landscape, download our Spring 2025 Market Report: