NAI Advent Spring 2025 Market Report
Spring 2025 Market Report – Calgary Commercial Real Estate
Industrial Sector – Resilience Amid Global Uncertainty
Calgary’s industrial real estate market remained resilient through Q4 2024 and Q1 2025, supported by strong demand across major submarkets and a backdrop of stabilizing economic conditions. Despite global uncertainties, the sector demonstrated healthy fundamentals, with active development and steady leasing activity maintaining market confidence.
Downtown Office Spaces Adapt to Market Shifts
After two quarters of positive absorption, Calgary’s downtown office market recorded –340,000 square feet of negative absorption in Q1 2025—the largest since Q2 2022. This decline was largely driven by Chevron’s exit and ongoing mergers and acquisitions in the energy sector. The vacancy rate increased from 28.3% to 29.9%, with this upward trend expected to continue due to global economic pressures and declining oil prices.
Despite this, average net rental rates rose from $12.32 to $13.01 per square foot, signaling sustained interest in quality space. Sublease vacancy held steady at 15.2%, suggesting that many tenants are opting to renew existing leases rather than absorb higher costs associated with new builds or relocations. Cap rates remained stable at 11.3%.
Office-to-residential conversions also continue to shape the downtown core. The HAT at Eau Claire was recently completed, adding 87 rental units. An additional dozen projects are in the pipeline, with five buildings expected to be completed in 2025.
Suburban Office Demand Surges
Calgary’s suburban office market continued to show strength in early 2025, with positive absorption and a further decline in vacancy rates. This growth is driven by increased demand from sectors such as healthcare, education, childcare, and social services.
The Beltline market is also experiencing sustained activity, partly due to the removal of two office buildings—Joffre Place and Connaught Centre—from inventory for conversion to residential use. Tariffs have added to elevated construction costs, further fueling demand for move-in-ready space. Landlords are responding with flexible leasing strategies, including turnkey build-outs, extended tenant improvement amortizations, and reusing existing space to control costs.
The suburban and Beltline markets are expected to stay active through 2025, although some moderation may occur as demand stabilizes and potential policy changes tied to the federal election come into play.
Multi-Family Sector – New Supply Meets Ongoing Demand
Calgary’s multifamily rental market in 2025 reflects a significant uptick in supply, driven by record-setting construction activity. In 2024, 1,836 new purpose-built rental units were delivered, increasing vacancy from 4.7% to 7.4%, according to Yardi.
Despite the rising vacancy rate, population growth continues to support rental demand. From 2020 to 2025, Calgary added approximately 141,000 new residents. The average rent for a two-bedroom unit is projected to rise from $1,859 to $1,922, while one-bedroom units now range between $1,800 and $2,200 per month. Premium suites are achieving rents of $3.00 to $3.50 per square foot.
The development pipeline remains strong, with 6,550 units currently under construction across 282 projects. In 2025, 2,260 new units across 29 major developments are scheduled for delivery, with high activity in the Beltline, East Village, Eau Claire, West Village, and Inner Northwest.
For deeper insights and a full analysis of Calgary’s evolving commercial real estate landscape, download our Spring 2025 Market Report: