Is Calgary’s 30% office vacancy a crisis or opportunity? How the city plans to turn empty towers into new housing

Why this matters

Calgary’s persistently high office vacancy rate, approaching 30%, underscores the ongoing structural challenges facing secondary office markets in North America. For institutional investors and capital allocators, this vacancy signals a critical juncture: traditional office demand remains subdued amid hybrid work trends and energy-sector volatility, while landlords and municipalities confront the limits of conventional leasing strategies. The city’s pivot to converting empty office towers into residential units reflects a broader recalibration of asset use and risk mitigation in markets where office fundamentals have deteriorated. From a capital-markets perspective, this adaptive reuse approach highlights the growing importance of flexibility in underwriting and asset management. It suggests that lenders and equity providers may increasingly weigh redevelopment potential and zoning adaptability as key value drivers, rather than relying solely on office income streams. For institutional portfolios, such conversions could offer a pathway to stabilize cash flows and preserve asset values, albeit with execution and entitlement risks that differ from core office leasing. Ultimately, Calgary’s situation exemplifies the evolving landscape for office real estate outside primary gateway cities. It signals a need for capital to be more discerning about market positioning and sector exposure, while also recognizing that distressed office inventory may present opportunistic avenues—if institutions can navigate the complexities of repurposing in a shifting urban and regulatory environment.

Editorial analysis · AI-assisted

On the RET wire

• Disclosed office deal value tracked in August 2026: $17.1B across 72 reported transactions. All Office coverage →

Computed from Real Estate Trail’s own tracked coverage

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