Calgary hit record-high office vacancy last quarter: report

A stock photo showing downtown Calgary. (Getty Images)

CALGARY -

Calgary's office vacancy rate continued to climb last quarter, hitting another record high.

According to Avison and Young's Office Market Report, released on Tuesday, Calgary's Q3 office vacancy rate was 26.1 per cent overall.

That's compared to 26.0 per cent in Q2 and 25.7 per cent a year ago.

Though office vacancy hit an all-time high in Q3, Avison and Young noted that the overall Calgary office market saw its smallest decrease in occupied space since the COVID-19 pandemic started.

The survey indicated the downtown office vacancy rate was 29.9 per cent last quarter compared to 29.2 in Q2. In the suburbs, vacancy rates stayed steady at 19.3 per cent in the north, but slid down to 20.8 per cent in the south from 21.6 the quarter before.

The report indicates there are 19 office buildings in Calgary that are completely empty, five of which are in the Beltline.

Avison and Young said Q3 saw negative absorption of 267,000 square feet.

"This is the seventh consecutive quarter of negative absorption for downtown Calgary, the longest period of negativity since 2014-16, which saw nine consecutive quarters of negative absorption," the report noted.

"Real estate decisions take a long time to play out and we will likely see further softness in the market for another year or two."

The survey noted there is "very little" construction of new office space taking place in Calgary.

"What is being built is primarily medical/ professional space in high demand, suburban locations," it said.

Avison and Young also noted in its vitality index that, as of Oct. 11, Calgary's downtown foot traffic was down 65 per cent from pre-pandemic levels recorded in March 2020.

The vitality index tracks and updates daily, real-time visitor volumes using anonymized cell phone pings across 23 markets in North America, including six Canadian cities.