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Market Report

Calgary Office Market Report

3Q 2022

Economic Diversification to Play a Key Role
in the Recovery of Calgary's Office Market

Impact of oil and gas decoupled from office performance. Due to Alberta's vast amount of natural resources, Calgary has historically been home to head offices and capital management divisions for multinational energy corporations. When oil is above $100 per barrel, economic activity and office leasing tend to be robust, but when the price declines, economic momentum follows. However, the price per barrel of oil reached the $100 threshold in early 2022, yet office fundamentals remain bleak. These unfavourable outcomes can be attributed to the uncertainty regarding in-person work, plus the slowdown in capital spending from oil and gas companies. Many of these firms are using increased profits for share buybacks and higher dividends, instead of expanding operations, as new efficiencies have dampened the need to re-hire. Although office fundamentals are weakening, owners are continuing to invest in their buildings, and others are getting creative by finding alternative uses for their assets. These may not have an immediate impact on office vacancy, but it is resulting in some cautious optimism toward the future of the Calgary office market.
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