Calgary office recovery accelerates as downtown vacancy falls again

Calgary’s downtown office recovery strengthened again in the third quarter of 2026, extending a turnaround that had only begun to emerge earlier this year. CBRE says Calgary recorded more than 500,000 square feet of positive net absorption during Q3, placing it alongside Toronto and Montreal as one of Canada’s strongest office markets for the quarter. Downtown vacancy fell by 80 basis points, one of the largest declines in the country, as leasing activity continued to build for a third consecutive quarter.

Perhaps more important for Calgary’s longer-term recovery, the amount of office space being marketed for sublease dropped sharply.

CBRE says Calgary sublease inventory declined by approximately 540,000 square feet in a single quarter, driven by lease expiries, new transactions and tenants choosing to retain some large blocks that had previously been offered back to the market.

The improvement comes after years in which energy-sector restructuring and corporate consolidation repeatedly returned large amounts of downtown space to landlords. Demand remains strongest for higher-quality Class A and trophy buildings, while older B and C properties continue to face a more difficult market.

The latest numbers materially strengthen the case that Calgary’s office market has moved beyond simple stabilization, though they do not erase the structural vacancy problem that has shaped downtown since the oil downturn and pandemic. In Q2, CBRE had reported the core’s first positive absorption since late 2024; Q3 now shows that improvement continuing and accelerating. Office conversions, demolitions and stronger leasing are all reducing excess inventory, but the growing gap between premium and older buildings means the next phase of recovery may depend increasingly on whether obsolete towers can be upgraded, converted or removed from the market altogether.