Edmonton Outlook 2024

January 17, 2024 5 Minute Read

Edmonton skyline with bridge

2024 | Real Estate Outlook Series

Edmonton is gathering momentum. Businesses and investors should take note and take advantage.

The downtown office market ended 2023 positively, with vacancy dropping 100 bps in a single quarter to 22.9% in Q4, thanks to 158,160 sq. ft. of net absorption. It was the best quarter for absorption in nearly three years.

The Edmonton industrial market remained steady throughout last year, and ended with a fourth quarter availability rate of 5.3%, down slightly from the same period in 2022.

What to expect for the year ahead in Edmonton commercial real estate? We spoke to CBRE Edmonton Managing Director Dave Young to find out what he’ll be watching for in 2024.


We’ll see a continued evolution of the Class A and AA office space in terms of tenants demanding more out of their premises. There will be the ongoing flight to quality that everyone is talking about. It’s going to be very important for building owners to have extremely well amenitized offerings to attract and retain tenants.  Updated fitness areas and tenant lounges will be a necessity and if you don’t have those amenities businesses won’t even tour your available listings.

We are going to see activity downtown in the Class A and better buildings, and continued growth in the suburbs given the nature of our business.  There have been recent announcements of major projects (DOW, Air Products) so we anticipate that  the engineering tenancy base, for example, will start to ramp up a bit more to service some of these large scale investments.

The big question is what do you do with the Class B and C office space? What do you do with obsolete or smaller floorplate buildings? There is talk of conversion but, will that permeate through the market? And on conversions, what buildings really work? People think conversion is a silver bullet to solve the housing crisis, but it only works for a certain scale and floorplate. So what happens with the marginal office assets? I think there will be continued value erosion in the B and C space.

Edmonton and Alberta are leading the nation in GDP growth. So retailers will benefit from the activity in the region. - Dave Young


Our population has grown about 4% year over year. That’s significant for Edmonton and we’ll continue to see that as we provide a cost-effective environment for residents and businesses, too. The high cost of doing business in Vancouver will benefit Calgary, then Edmonton; you’ll start to see more of those tenants consider this market given the sheer cost of operations.

2024 is going to be the year of existing industrial product. There are buildings being built albeit not at the same pace as in the last couple of years but, there’s still absorption. You’re seeing industrial vacancy rates continue to fall and we’ll see rental rate growth in all categories of industrial space in 2024.

You’ll continue to see the growth of oil and gas tenants and tenants that service that industry. It’s going to be in the mid-box range. The bigger tenants aren’t seeing the same amount of activity as they saw in 2021 and 2022, but it’s still a healthy market. The industrial market will take advantage of the tremendous growth in the province.

Dow just announced it’s building an $9 billion carbon capture facility in the northeast quadrant of the city; Air Products announced a hydrogen facility in the same area, a deal CBRE’s industrial team worked on. And Canada’s largest municipal solar farm is located here in Edmonton. So it’s not just conventional oil and gas. Those companies have been resilient in looking at how we green the energy business.


Retail has really bounced back since COVID. We’re a very entrepreneurial province with great disposable income figures. GDP growth in the city and the province is leading the nation. So retailers will benefit from the activity in the region.

There’s not a tremendous amount of retail product under development at the moment given construction costs and the debt market and I don’t see a lot of new projects coming up. There will be infill development or un-anchored strip centres developed to service a specific node as the residential market continues to expand.

And again, you can tie this story back to the power of the province and the income demographic as it relates to the City of Edmonton. Our airport call letters are YEG, which people are saying stands for Young Educated and Growing. That will help the retail and residential business as we go forward.

Our tax rates are starting to climb and that could put a bit of a damper on the growth in the city itself. But as you go outside Edmonton to the surrounding communities, the region will be competitive. Alberta is most competitive tax regime in Canada and the macroeconomic prospects for the province are the strongest we’ve seen in 8 years. I see Edmonton continuing to capitalize on the tailwinds currently at play in the province.


It’s just like the housing situation in every other city: costs are escalating dramatically and it’s hard to build. So there will be continued growth in rents. This year is going to be a story of existing income-producing properties. If debt starts to stabilize and rents continue to grow, the multi-family market will be very active in 2024.

The cost of debt and access to financing has been a challenge. The private market is still fairly active. Smaller deals – sub $30 million – will continue to be the most sought after in Edmonton as there’s an active private market here. And a new zoning bylaw should ease smaller-scale multifamily development.

The housing problem in Edmonton is not as acute as in Toronto and Vancouver. Calgary is attracting about 60% of the in-migration to the province and we are starting to see pricing escalate in that market. Edmonton is still extremely affordable so that will help bode well for growth in 2024. There will be a bit of supply challenge in the next little while, but we’re still attractive from an affordability perspective.

Business and investors overlook Edmonton at their own risk. We’ve got a lot to offer and are going to punch above our mid-sized city weight.

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