Calgary Downtown Office Market Gains Momentum as Vacancy Dips and Absorption Turns Positive

Q2 2026 saw only a slight decrease in vacancy from Q1, falling to 26.96%. As expected, activity slowed down going into the summer, and we only saw a handful of notable transactions, including Barrel Oil’s sublease expansion in Livingston Place – South and Saturn Oil and Gas subleasing three floors from MEG Energy/ Cenovus in Eau Claire Tower.

Vacancy dropped marginally across all classes: Class AA is at 17.49%, Class A is at 32.85%, Class B is at 27.65%, and Class C is at 38.83%. These are all indications that the market has remained stable for the first half of the year, with the biggest drop happening in the Class C submarket. Absorption sits at 361,597 square feet; this is the first quarter of positive absorption since Q1 2025.

Merger and acquisition activity remains strong in the first half of the year, with the energy sector once again ahead of other industries for overall deal value — a trend underscored by Shell’s agreement to acquire ARC Resources for US$16.5 billion, among other large transactions. LNG companies have also been at the forefront, as federal and provincial policies take shape to support Canadian resource exports, including continued progress toward a final investment decision on LNG Canada’s Phase 2 expansion. This matters because, as we have seen in the past, M&A activity has continued to push large blocks of sublease space onto the market, perpetuating the already high vacancy rate and depending on the condition of the sublease space the bifurcation between submarkets. However, this creates opportunities for occupiers, as an increased amount of sublease space places pressure on headlease space already on the market.