Downtown Edmonton office vacancies drop as restaurants and retail struggle
Major tenants like government and institutions are returning to the core, but businesses are leaving over rising costs and declining foot traffic.
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Downtown Edmonton's office market is showing signs of recovery, with vacancy rates declining around a full percentage point compared to last year, while retail and restaurant tenants continue to exit the core.
A new CBRE report highlights strong Q2 activity, with major transactions from federal and provincial government workers, National Bank, Atco, ATB, and AIMCo all committing to downtown office space. The sublet market hit its lowest vacancy in 15 years—a marker of health showing few tenants have surplus space to lease out.
But that recovery hasn't reached ground level. KB & Co, Playwright, Khazana, and Sunterra Market inside Commerce Place have all announced plans to leave downtown. Operators cited rising food and labour costs, changing downtown dynamics, and obstructive construction that reduced foot traffic.
Mark Anderson, vice-president and managing director at CBRE Edmonton, said office activity is concentrated in a narrow geographic zone around the Ice District and Edmonton City Centre mall. "The problem is our Downtown is so gosh darn big," Anderson said. However, he sees this concentration as promising. "What's really promising is it looks like the cup is filling up, and it's about to start spilling over."
Anderson suggested the city could boost downtown vibrancy by filling its own leased office spaces—particularly Edmonton Tower—rather than leasing additional space. "You show me someone who wants to live Downtown, and I'll show you somebody who works Downtown," he said, noting that living and working patterns are closely linked.
