Calgary’s commercial real estate market has remained resilient, underpinned by sustained growth in the industrial sector. The city’s emergence as a western Canada inland port, combined with accelerating investment in AI-driven data centre infrastructure, continues to support healthy transaction activity across the region.
Availability of industrial product declined year over year, with rates sitting at 5.9 per cent in the fourth quarter of 2025, down from 6.5 per cent during the same period in 2024, according to Altus Group. Institutional investors have been active in the market, targeting A-class industrial assets, while owner-occupiers have focused on smaller-bay industrial units in older B-class buildings throughout the city’s industrial parks. Demand has continued to outpace supply of product suited to office/showroom configurations, which typically hovers at 3,000 sq. ft. Lower lease rates in older industrial buildings have been attracting price-conscious small businesses, while demand for more expensive and newer industrial product has been steady.
Logistics ambitions take shape
The city’s growing reputation as an inland port has been recently supersized by the Prairie Economic Gateway Initiative on Calgary’s periphery. The joint effort between the city and Rocky View County will create a rail-served industrial development that is expected to enhance interprovincial trade and global market access. The 10-year plus project could generate over $7 billion in economic activity. (Source: City of Calgary)
National market continues to evolve
REMAX Canada’s national 2026 Commercial Real Estate Report examined first-quarter activity across 12 major Canadian markets and found that the commercial property market has continued to evolve with improved absorption, particularly in the office sector, where return-to-office mandates are supporting increased leasing activity in premium space. Industrial demand has remained durable nationwide, with inventory challenges persisting. Retail fundamentals have continued to outperform expectations, supported by population growth and infrastructure investment, reinforcing long-term demand. While capital deployment has been measured in most markets analyzed, improving financial conditions have prompted renewed interest in well-located, income-producing assets.
Data farms/warehousing, manufacturing and distribution drive land demand in Calgary
Alberta’s commitment to data centre development has proven to be a magnet for local and foreign investment, with more than 20 farms now up and running in Calgary and surrounding areas, and additional projects in the pipeline. The Major Projects List on Alberta.ca reports eStruxture CAL-3 Data Centre is currently under construction in Rocky View County, representing an investment of $750 million, while the proposed Synapse Olds Data Centre just outside Calgary is valued at an estimated $10 billion.
Given the land requirements for data centres and large businesses including warehousing, manufacturing and distribution, demand has increased in Calgary’s surrounding areas. Tracts of land have been snapped up by corporations including Amazon.com, Walmart and Empire Co. Ltd. (Safeway).
Greater investment in the city has strengthened investor sentiment. An influx of REITs, institutional investors and large multi-national companies have continued to support transaction activity with more occurring and additional deals expected, especially in industrial and commercial asset classes, as some investors pivot from a saturated multi-residential market.
Rental market shifts to discipline
Despite a contraction in overall demand and an oversupply of product, Calgary-based Boardwalk REIT has remained focused on providing access to high-quality communities at an affordable price point, according to their February 19th, 2026 financial report for year end. In 2025, the REIT acquired three rental properties including Elbow 5 Eight, the remaining half interest in Brio and The Arch. Favourable financing from Canada Mortgage and Housing Corp. Select-MLI Programs, a boon to builders and developers in recent years, has tightened up lending criteria with greater emphasis on affordability. Older buildings with fewer doors are increasingly sought after by smaller investors although inventory levels are low at present. More product is expected to come to market in the latter half of the year.
Retail demand holds steady
Retail space has continued to see healthy demand throughout the city, with expanding restaurant franchise operations and tenants in health, beauty and wellness, liquor, vape and thrift industries actively seeking space. Smaller retailers are typically looking for subleased space in suburban and downtown areas. Shops in the core have remained steady, bolstered by new revitalization initiatives including investment in arts and culture, as well as improvements to public spaces and projects such as the new Eau Claire Plaza, Olympic Plaza, Stephen Avenue and 8 Street SW. Small plazas, popular with out-of-province buyers, have remained in short supply, with many owners holding assets in anticipation of improved returns in the future.
Office market continues to rebalance
According to Q4 2025 data from Altus Group, office availability in Calgary continued to decline, with availability rates dropping to 19.8 per cent, down from 21.9 per cent one year earlier. More than 2.68 million sq. ft. of downtown office space has undergone or is in the process of conversion to residential use through Calgary’s Downtown Development Incentive Program. Six of 21 office conversion projects have been completed, while the remaining 15 are in various stages of construction, according to a November 2025 report from the City of Calgary Newsroom.
While the downtown core has continued to struggle with elevated vacancy rates, the suburban office markets are showing renewed strength, with areas such as Core Business Park reporting vacancy rates hovering near five per cent.
Positioned for growth
Calgary’s commercial real estate market is poised for continued growth, with industrial and land assets expected to remain the primary drivers of activity as the city builds out its logistics and data infrastructure footprint.
Strong underlying demand, rising institutional interest, and ongoing investment in large-scale projects are expected to support transaction momentum throughout 2026. While conditions in the office and multi-residential sectors have remained mixed, improving sentiment and selective opportunities, particularly in terms of repositioning and higher-yield acquisitions, have begun to draw renewed interest. With retail fundamentals holding steady and development activity expanding into surrounding areas, Calgary is entering a period of strategic expansion that should support a more balanced and diversified commercial market over the next few years.
