More than 203,000 sq. Ft. of positive absorption and falling Calgary office vacancy signal improving conditions for commercial lenders
Calgary’s suburban office market posted its strongest quarterly result in years during Q2 2026.
Positive net absorption across the city exceeded 203,000 square feet. That means more space was leased than vacated, according to Avison Young’s Q2 2026 market data. Suburban offices drove the bulk of that gain.
For mortgage brokers with commercial lending clients in Alberta, the numbers matter. Tighter vacancy supports asset valuations. Stronger valuations improve borrower equity positions and reduce lender risk, making commercial financing more accessible.
Suburban vacancy drops to 14.7%
The Calgary suburban office market recorded a 1.1% quarter-over-quarter vacancy decline, bringing the rate to 14.7%.
That figure sits well below the national office vacancy rate of 13.6% reported by Colliers for Q1 2026. It also undercuts Calgary’s own downtown rate, which has remained elevated through energy-sector consolidation.
The standout submarket was Suburban South. Lease-up activity at the west tower of the Imperial Oil Quarry Park Campus drove a significant occupancy boost. The campus, located in the city’s southeast, is one of Calgary’s most sought-after suburban office nodes.
Office tenants leased more than 160,000 square feet at the Imperial Oil Campus during the second quarter, according to CoStar data.
Quarry Park has long been regarded as one of the premier suburban office precincts in any Canadian market. Stable tenancy, comparatively low vacancy, and limited new supply have made it a consistent performer. It has also become an attractive target for investors. It’s part of a broader national trend in which the market reset has seen investors pursue quality suburban assets over distressed downtown product.
What this means for commercial mortgage brokers
The Calgary suburban office market recovery has direct implications for brokers arranging commercial financing in Alberta.
When vacancy tightens and absorption turns positive, lenders gain confidence in the income stability of office assets. That shifts credit conditions: cap rates compress, debt serviceability improves, and refinancing conversations become more productive.
Across Canada, the office market posted positive net absorption for a fourth consecutive quarter in Q2 2026. The total reached 1.2 million square feet, with Calgary, Toronto, and Montreal each exceeding 300,000 square feet. This is all part of Canada’s broader commercial real estate recovery now leaving pandemic-era weakness behind.
Calgary’s inclusion in that group reflects a market that has moved past its worst post-pandemic conditions. Investors have taken note. Strategic acquisitions of suburban Calgary office assets have emerged in recent quarters, signalling renewed appetite for well-located product. Glenmore Professional Centre and Heritage Square are among the recent transactions.
Uncertainty remains, but fundamentals hold
Geopolitical and economic headwinds have slowed some leasing decisions in 2026. Trade policy uncertainty and ongoing energy-sector rationalization continue to weigh on the downtown core.
But the Calgary suburban office market is a different story. Major corporate renewals have continued. Demand for quality space has not retreated. New supply remains limited.
Limited new supply is partly by design. Calgary’s downtown office-to-residential conversion program has been steadily removing underperforming stock from inventory, adding housing supply while reducing available office stock.
Avison Young positions Calgary for gradual improvement through the remainder of 2026. The Q2 absorption data suggests the conditions for a sustained recovery are falling into place.
