Calgary's downtown office vacancy rate has fallen below 30% for the first time since the onset of the pandemic, reaching 28.6% in the first quarter of 2026 as the city's economic diversification efforts begin to show results. The data, released by commercial real estate firm CBRE, represents a decline of 4.2 percentage points from the same period last year and marks the fourth consecutive quarter of improvement.
The improvement is driven by a combination of factors, including the conversion of several older office towers to residential use, the arrival of new technology and clean energy tenants, and a gradual return to in-person work among established firms. Notable new leases in the past six months include a 75,000-square-foot commitment by carbon capture firm Entropy Inc. and a 40,000-square-foot expansion by software company Benevity.
A Long Road Back
Despite the positive trend, Calgary's downtown vacancy rate remains among the highest in North America and well above the pre-2015 level of approximately 7%. The oil price collapse of 2014-15 and the pandemic's acceleration of remote work created a surplus of office space that the city has been working to absorb for over a decade.
Calgary Economic Development president and CEO Brad Parry said the numbers reflect a fundamental shift in the city's economic base. "Calgary is no longer a one-industry town," Parry said. "The tech sector, clean energy, financial services, and creative industries are all growing their presence downtown, and that's exactly what diversification looks like."
Conversion Strategy Paying Off
The City of Calgary's office-to-residential conversion incentive program, which offers up to $75 per square foot for qualifying conversions, has been a key driver of the vacancy rate improvement. To date, the program has supported the conversion of six buildings totalling 1.2 million square feet, removing surplus office space from the market while adding approximately 1,800 residential units to the downtown core.
Mayor Jyoti Gondek said the city will continue to invest in downtown revitalization. "We still have work to do, but the trend line is clear — downtown Calgary is coming back," Gondek said. "Every converted building, every new lease, every new restaurant opening is a sign that people believe in this city's future." Analysts caution that the pace of improvement may slow as the easiest conversions are completed and the market absorbs remaining surplus space, but the overall trajectory remains positive.