Robust immigration and interprovincial migration in recent years have bolstered unprecedented expansion in the Calgary commercial real estate market. While the influx of new residents has slowed in recent quarters, supply shortages continue to exist across a multitude of commercial asset classes, including multi-family housing, which remains the top performer in Calgary, driven by REITs, institutional investors and out-of-province buyers. Almost 3,000 multi-family housing starts were reported by the City of Calgary in the first quarter of 2025, with purpose-built rentals representing nearly 65 per cent.
Existing apartment portfolio sales continue unabated, with 2024 confirmed “as the year of the multifamily in the Calgary market,” reported by CoStar. Investors are buying up doors throughout the city as the housing crunch continues to strain supply. To illustrate, Boardwalk REIT closed on the Circle, a 295-unit rental building valued at almost $80 million, in January and acquired Elbow 5 Eight, a 256-unit apartment building in Windsor Park for $93 million. Another investor group recently purchased three Class A multi-family properties in Calgary comprised of 149 units for $87.5 million.
In its 2024 Rental Market Report, the Canada Mortgage and Housing Corporation (CMHC) reported vacancy rates for purpose-built rentals in the Calgary market sat at 4.8 per cent, with monthly rental rates for an average two-bedroom apartment rising almost nine per cent to just under $1,900. The recent influx of new inventory, however, has served to stabilize the market in recent months, with future rate hikes expected to be more tempered. Vacancy rates for similar condominium apartments are much tighter, with monthly rental rates approaching $2,000.
Office conversions gain ground
The need for residential housing is also propelling office conversions in Calgary’s downtown core, with the city relaunching its Downtown Development incentive program last fall. Eleven downtown office conversions have been approved to date—with two completed—representing an additional 1,500 new units. At least 20 buildings have been purchased with an eye to conversion.
While absorption levels in the ailing office sector have increased, availability rates remained amongst the highest in the country at 20.7 per cent in the first quarter of 2025, down from 22.6 per cent during the same period in 2024, according to Altus Group. Class A buildings in the core continue to draw tenants away from older B- and C-class office space as the flight to quality continues. Incentivized larger and smaller tenants are making their moves, with several A-class office buildings now fully occupied.
Retail evolves with experience-driven format
Retail in the core is starting to benefit from increased residential, although the full impact is unlikely to be identified for several years when conversion projects are completed. New residential development on adjacent land over the past 10 to 15 years has ed the city’s retail malls. Greater emphasis has now been placed on creating a destination for shoppers by mall management, with the addition of new restaurants, on-site recreational facilities including gyms and studios, as well as health and beauty services. CF Chinook Centres recently upped the ante, bringing in a new virtual reality experience to consumers with its Horizon of Khufu trip through the Great Pyramid of Giza with great success. The mall has since followed up with another virtual experience—Life Chronicles—that takes viewers through the ages. Both events will run through to the end of October 2025. The Hudson Bay Company’s bankruptcy was a blip in the market with its space broken down and taken over by smaller retailers.
REIT and institutional investment continue to be noted in the Calgary area given long-term development potential, as evidenced by the purchase of a 50 per cent interest in the Seaton Gateway shopping centre in Calgary for $33.5 million last year.
Neighbourhood retail nodes throughout the city remain strong, with clusters of boutiques, restaurants, and cool retail shops attracting foot traffic. Retail space is particularly coveted in vibrant districts including Kensington, 17th Avenue SW, Fourth St., and Inglewood, usually commanding top dollar with vacancies few and far between.
Calgary builds a logistics powerhouse
Industrial continues to expand in the Calgary area as the city position’s itself as an inland port and distribution hub for Western Canada. A recent announcement by the City of Calgary and Rocky View underscores the commitment to develop what could be North America’s strongest inland port. Still in its infant stages, the Prairie Economic Gateway project, located on city’s eastern limits with access to rail lines, is forecast to generate over $7 billion in economic activity and create more than 30,000 jobs across the region over the next 10 to 12 years.
Smaller single-use properties with one bay, ranging from 1,500 to 2,000 square feet in size, continues to climb, yet inventory for both sale or lease is greatly diminished. Mid-market industrial product with over 30,000 square feet is also sought-after, but demand continues to outpace supply. Availability rates have edged upward for industrial product. Altus Group reported rates hovering at 6.9 per cent in the first quarter of the year, up from 5.8 per cent in Q1 2024—in large part due to new industrial developments coming on stream.
Alberta has quickly become an attractive hub for large-scale cloud-based and AI data centres, and demand is growing for land and industrial space to accommodate. Development of a $750 million data farm on the outskirts of Calgary was announced late last year, the third and largest in the province once completed. The province is actively pursuing a strategy to attract data center investments, aiming to secure $100 billion in investment over the next five years. Special considerations are necessary, as the establishment of data centres requires significant square footage and special zoning (municipal consultations and zoning approvals can take 6-12 months) as well as an application to the Alberta Electrical System Operator (AESO) for access to the grid (a process that can take 18-24 months).
Calgary’s commercial real estate market continues to undergo a period of transformation, fueled by population growth, strategic investment and ongoing economic diversification. The multi-family sector continues to lead performance metrics, underpinned by tight vacancy rates, investor confidence, and increasing demand for rental housing. Downtown office conversions and a renewed focus on residential densification are reshaping the urban core, while the retail sector benefits from a rising local population and experiential trends. Industrial expansion remains robust, positioning Calgary as a critical logistics and distribution hub for Western Canada. Although external pressures such as trade tensions and rising interest rates present challenges, Alberta’s resilient energy sector and GDP growth outlook provide a strong economic foundation. Collectively, these dynamics point to a maturing, opportunity-rich commercial landscape—one that is increasingly diversified, investor-friendly and positioned for sustained long-term growth.
