Edmonton Office Investment Forecast

Suburbs continue to shine. Edmonton’s office vacancy rate has largely trended down since 2022, supported by limited supply growth and some office-to-residential conversions. However, leasing volumes also slowed over that period, which stabilized the vacancy rate around 14.5 per cent last year. That said, suburban areas continued to outperform. This strength stemmed from population growth in surrounding areas and strong demand from mid-to-large engineering, construction and professional-service firms seeking amenity-rich modern buildings with proximity to industrial corridors and ample parking. By contrast, the downtown core remained weighed down by hybrid work policies from major government occupiers and ongoing tenant rightsizing. Looking ahead, leasing is expected to edge higher and rents should tick up this year, with suburban assets leading the way. Limited new supply, a handful of office-to-residential conversions, and the provincial government’s recently announced return-to-work mandate starting in February will all help vacancy gradually trend lower. However, the downtown recovery will likely continue to lag as obsolete towers face structural headwinds.