Calgary Commercial Real Estate Outlook 2023

February 15, 2023 3 Minute Read


2023 Real Estate Outlook Series

Calgary finally saw a little good news as it relates to high office vacancies. Downtown office vacancy dropped slightly to 32.6% as the city's second consecutive quarter of positive net absorption of office space.  

Calgary's  industrial market has maintained strong momentum. Of the 1.0 million sq. ft. of new speculative industrial product delivered in the final quarter, 52.0% was pre-leased.

What will the coming year bring for Calgary commercial real estate? Greg Kwong, CBRE’s Regional Managing Director - Prairie Region, tells us what he’ll be watching for.


I expect it to be more of the same for our office market. There is a lot more optimism in the energy patch. However, we haven’t seen that translate into hiring yet. Energy companies are doing well from a cash flow perspective.

And there’s lots of optimism as it relates to the next 12 to 18 months. Supply shortages due to the war in Ukraine and other supply chain issues are driving prices up, directly filling the coffers of the energy sector.

The overall concern, and it’s not just in Calgary, surrounds the tech sector. It’s going through a rationalization right now. And we’re seeing tech companies put sublease space on the market. We don’t believe this is a long-term issue and this industry’s long term growth prospects are huge.

Calgary is still moving toward creating a more diverse tenant base downtown.

Last year was the best year ever for Calgary industrial. And we expect it to continue into the first half of 2023. - Greg Kwong


Last year was the best year ever for Calgary industrial. And we expect it to continue into the first half of 2023. We’re starting to see some weakness in the U.S. industrial market. Big players like Amazon are putting space on the market for sublease or sale, which is a cause for concern.

It seems like the distribution sector has taken on too much space and may be in for a pause as they digest what they consumed in 2022. Calgary is still looking good as there is pent up demand and new distribution warehouses continue to be announced because of our central location and lower cost base relative to other markets.


We’ll see the most impactful change in the retail landscape. A lot of major retailers in the restaurant space that had fallen by the wayside are coming back with new concepts. Other categories like fashion (eg. Zellers) will not dramatically impact from a real estate perspective, but it certainly shows what the retail industry is thinking as they chase the mercurial consumer.   

We see continued strong demand for the restaurant sector in 2023 as the effects of the pandemic wear off and activity returns to normal. In addition, a rebound in streetfront retail will be seen over the next 12 to 18 months.


Two opposing forces are facing our multifamily market: Interest rate hikes are putting a damper on values. And net migration into Calgary is expected to be strong for 2023, creating demand for rental apartments, which helps increase monthly rental rates.

So it’s going to be a good multifamily market in 2023. We expect to see a fair bit of deal activity, whether owners are refinancing or selling. And the overall market will be buoyed by net migration into Alberta.

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