CALGARY -- The number of empty office spaces in Calgary continues to rise as businesses shift their operation model.

A report by Avison Young indicates that overall office vacancy in the city for the third quarter increased to 23.5 per cent. This is the highest figure Calgary has ever seen but it’s not the first time it's been this high.

The city hit this record before in both 2017 and 2018.

The higher vacancy rate unfortunately means less people downtown and that hurts businesses in the core that rely on corporate customers.

Spice Cafe is located right in an office building along Sixth Avenue S.W.

Veronica Wai’s family owns the restaurant and says they’ve seen revenue take a nose dive.

“It’s definitely impacted us,” said Wai. “The traffic in the plus 15 is a lot less than we’ve ever seen before. We need all the office people to come in and they’re not coming to the office as frequently.”

Part of this has to do with many businesses adopting a work-from-home model during the pandemic.

Susan Thompson, a research manager at Avison Young, says other reasons include businesses closing down, layoffs and some simply realizing they don’t need all the space.

“It is unfortunate at this time we are seeing some additional distress in Calgary’s office market. We had a very high office vacancy rate going into the COVID-19 pandemic and this seems to have amplified some of that,” said Thompson.

Downtown Calgary’s office vacancy rate is 25.7 per cent, but other areas in the city also saw an increase, including the Beltline and suburbs in the north and south.

Right now in the core, there are four buildings sitting completely empty, including the former Nexen building which is just under 600,000 square feet and the former SNC Lavalin building at just under 120,000 square feet.

While another report from the CBRE, put Calgary's office vacancy slightly higher at 28.7 per cent, both figures mean bad news for the market.

Thompson says the city should expect a very erratic office market over the next few years.

The upside is a tenant's market has been created, which can open opportunities for entrepreneurs looking for a downtown spot.