A program is incentivizing developers to transform underutilized office space into housing
Calgary’s downtown is undergoing a transformation driven by a shift in how office spaces are being utilized, according to a report on emerging trends in Canadian real estate by PwC Canada.
Once marked by high vacancy rates exceeding 30%, the report said downtown Calgary is now embracing a new identity, fuelled by converting underused office spaces into residential developments.
This reimagining of the city’s core aligns with broader economic and real estate trends. According to the Calgary Herald, the report identifies Calgary as a leading commercial real estate market for 2025, supported by its strong economy and growing population.
Fred Cassano, partner and national real estate leader at PwC Canada, highlighted Calgary’s diversified economy as a key factor driving growth. “The economy is more diversified, and while still driven by the energy sector, there are other growing elements, too, like technology,” he said.
The economic vibrancy has also fuelled migration, with Calgary welcoming nearly 60,000 international newcomers annually, in addition to approximately 27,000 new residents from other provinces. The influx has heightened demand for housing, spurring both multi-family and residential land development.
Conversion initiatives
The City of Calgary’s efforts to address high office vacancy rates are central to downtown revitalization. Through a program that offers developers up to $75 per square foot to convert office spaces into residential units, significant progress has been made.
The initiative has already seen the completion of Calgary’s first office-to-residential conversion project, a 112-unit rental development, in the spring of 2024. Ten additional projects are underway, promising to reshape the city’s urban landscape.
“Rapid growth of its population is also a key economic stimulant,” Cassano noted. “All of this suggests the need to build a lot more homes to accommodate that growth this year.”
Affordability advantage
Calgary’s real estate market also benefits from relative affordability compared to other major Canadian cities. The average monthly rent in Calgary, approximately $1,859, is significantly lower than Vancouver’s $2,400 average in 2024. Similarly, home prices in Calgary remain more accessible than those in Vancouver and Toronto.
Realtor Richard Fleming of Re/Max Real Estate Mountain View emphasized how the city’s strong economy supports its real estate market. “A strong economy drives real estate because when people are making money, they want to buy real estate,” he said, adding that Calgary’s growth cycle contributes to increased government revenues and subsequent investments in infrastructure and services.
With near-record housing starts anticipated for 2025, Calgary is poised to maintain its pace of development. The city’s initiatives to convert office spaces and support multi-family developments are expected to ease housing pressures, particularly for first-time buyers and renters.
The report forecasts a steady increase in rental demand, although rent hikes are predicted to be more moderate than the 9% surge seen in 2024.
Calgary’s ongoing evolution exemplifies how cities can adapt to shifting economic and societal trends.
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