Article
M&A Activity Leaves Calgary Office Market At A Standstill
December 1, 2025 3 Minute Read
ConocoPhillips and Imperial Oil recently announced plans to lay off employees, with Chevron, BP and SLB soon to follow. Most of the job losses are the result of mergers and acquisitions in the oil and gas sector.
All that churn has many in Calgary wondering what will become of the city’s office market, which is shaped largely by what happens in the energy sector.
“The big challenge at the moment is undoubtedly mergers and acquisitions, which have created quite a bit of sublease space: 2.2 million sq. ft. – the highest amount since 2023,” notes CBRE Calgary Managing Director Michael Hoffman.
Calgary’s office market continues to have some of the highest vacancy rates in Canada, with 30.3% vacancy in the downtown core in the third quarter. The Class AA vacancy rate is at a comparatively lower 19.6%, versus Class B and C vacancy, which sits at over 40%.
“It’s another challenge for an already challenged market, but the bifurcation of the vacancy rates is clear evidence of the demand that does exist from tenants for quality, amenity-rich buildings,” says Hoffman.
There is good news. The city continues to pursue economic diversity with some success. But while Calgary’s tech industry has grown at the fastest rate of any city in North America, work-from-home and hybrid work were the major forces behind office space being returned to the city’s office market earlier this year, according to a CBRE report.
“We can see other cities in Canada have gotten their bearings and office vacancy rates have started to fall,” Hoffman notes. “If we come to the end of the M&A activity in the energy sector Calgary should find itself in a similar place.”
Revitalizing Downtown Via Conversions
Calgary has made significant strides converting empty office towers into residential buildings, schools, hotels and other mixed-use spaces through the Downtown Development Incentive Program.
The city just marked the completion of the sixth office-to-residential conversion project with several more on the way. But Hoffman says there’s still a big gap to be filled.
Downtown Calgary has about 41 million sq. ft. of total office space and about 2.4 million is being converted, he points out. “It’s helping to stabilize the numbers, specifically in remaining Class B office towers, but conversions are not going to result in significantly lower vacancy over time.”
Despite the elevated vacancy, larger office occupiers face challenges finding big blocks of high-quality space downtown. “A user looking for 20,000 sq. ft. to 40,000 sq. ft. of office space has a lot more choice,” Hoffman says.
Continued Consolidation
What’s ahead for the Calgary office market in 2026? No city is immune to the economic uncertainty of this moment in history. But few places are as resilient and innovative as Calgary.
“The oil and gas sector has historically been very volatile based on commodity prices, which has made us quick to respond to challenges and is why we’re a leader in office conversions,” Hoffman says.
“We can’t be surprised by the impact of mergers in an oil and gas town, much like we can’t be surprised by Calgary’s ability to support emerging sectors of the economy that could produce future demand for office space.
“They call it the Alberta Advantage for a reason.”
Recent Insights
-
CBRE recently brokered the sale of 150 Slater St., a 447,448 sq. ft., Class A office tower in the heart of the capital’s financial district.
-
The seven-storey office building is being built on top of a restored former 100+ year old warehouse, combining the aesthetic of a century-old brick and beam structure with the functionality and sleekness of new, state-of-the-art office space.
-
CBRE’s Jeremy Deeks and John Fisher helped relocate ATCO to a new office building in downtown Edmonton, one of the city’s largest and most impactful office relocations in over a decade.
Stay In The Know
Subscribe today and join hundreds of professionals who get the latest blogs delivered straight to their inbox.