Article
What To Watch for In Edmonton Commercial Real Estate This Year
February 10, 2026 4 Minute Read
Edmonton’s office market is offering reasons for optimism at the outset of the year, with total vacancy (downtown plus suburbs) dropping to 19.0% in the fourth quarter of 2025.
Industrial real estate availability has been relatively stable, coming in at 5.0% in Q4, with nearly 850,000 sq. ft. of industrial space under construction.
We checked in with CBRE Edmonton Managing Director Mark Anderson to find out what he’s tracking in his city’s commercial real estate market in 2026.
Office Market Offers Upside
We’re expecting a relatively stable year characterized primarily by an overall increase in sentiment for the downtown core. While the continued rationalization of underutilized space may push the vacancy rate higher than it currently is, we’re quite optimistic about the office market given how the negative absorption forecasted at the end of 2025 was largely mitigated. The office recovery is taking shape in other Canadian cities and we know it takes time for the trends we observe elsewhere to take hold in Edmonton.
We’re seeing more return to office activity; provincial employees have been called back to the office, similar to what was seen in Ontario. That’s set to go into effect Feb. 1 and it will be a big deal for a market like Edmonton, a government town, the capital of Alberta. We have a large provincial workforce within our downtown.
Even tech companies, which are mobile-enabled, are coming together in offices more often. That includes some large tech firms, which I think will be good for those companies, their culture and their productivity. But it’s also good for our downtown as a whole. Suburban office will continue to perform well this year, too.
Certainty Returns to Industrial Market
We’re starting to see more clarity in the face of uncertainty in the industrial market. Tariffs have been most felt in this sector but more companies are now saying we have to start making decisions. Small-bay industrial has continued to perform well. We believe 2026 will be characterized by the development of more large-bay distribution space; we see that area picking up this year, which is great news for our market and some of the existing inventory that’s there.
We are currently operating in a market of very limited availability without a line of sight on how that will be remedied. The cost of construction in industrial has really stymied the natural reaction we’d expect from the demand we’re currently observing in the market. One would expect more under construction and more spec-built product to satiate the demand for new generation industrial space. Developers are wary about building at that price point and having to enter the market with those underwriting assumptions in place.
Retail Keeps Chugging
Retail is going to continue to perform well this year, grocery-anchored suburban sites especially. Edmonton takes up a large geographic area; we spread out quite a lot which necessitates these kinds of commercial nodes to serve the residential pattern we see here.
Multifamily Stays Strong
The multifamily market remains strong. Last year was one of our best years in multifamily transactions in Edmonton; it was a very good year in that sense. And we see that momentum continuing this year.
Investment Activity Is Stable
Investment activity is stable as we head into 2026; the most value creation is going to be in the office sector, especially as we see renewed sentiment in the office leasing market – that’s going to play out into the investment market.
We know that lenders are becoming a little bit more bullish on office properties as a result improved leasing activity across Canada, so activity should pick up. We’re still expecting private buyers to rule the day for transaction volume but we also believe this will be the year institutional investors started coming back.
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