News | Calgary office leasing regains footing as tenant demand broadens

Why this matters

The reported broadening of tenant demand in Calgary’s office market signals a tentative recovery in a sector long challenged by structural shifts and pandemic-induced disruptions. For institutional investors and lenders, this development is a barometer of evolving occupier sentiment in secondary Canadian office markets, which often serve as a proxy for risk appetite beyond primary US gateway cities. A diversification of tenant profiles suggests that occupiers are recalibrating space needs, potentially reflecting a more nuanced approach to hybrid work models rather than outright downsizing or flight to suburbs. From a capital-markets perspective, renewed leasing activity can underpin valuations and support underwriting assumptions that have been under pressure amid persistent vacancy and rent concessions. It may also influence lender confidence, particularly for assets in markets where office fundamentals have lagged. While Calgary’s market is not a direct US office proxy, its trajectory offers insight into how energy-sector-linked economies and regional hubs are navigating the broader office demand reset. For allocators, this signals that selective exposure to office markets with improving tenant diversification could mitigate downside risk and position portfolios for a gradual normalization in leasing fundamentals.

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