In walking through Calgary’s downtown core on a Tuesday morning, something feels different. The once-bustling +15 walkway system doesn’t quite have the same energy it did in 2019. Faces are fewer, footsteps more scattered. This isn’t just my observation – it’s a measurable shift that’s reshaping our city’s commercial landscape.
Calgary’s downtown office vacancy rate climbed to 31.3% in the third quarter, according to the latest CBRE report. That’s nearly a third of our downtown offices sitting empty while companies continue experimenting with hybrid work models that have proven surprisingly durable.
“We’re seeing a fundamental reset in how Calgarians view work,” says Deborah Fraser, commercial real estate analyst with Avison Young. “The pandemic forced companies to try remote work, and many discovered productivity didn’t suffer. Now they’re reluctant to return to old models.”
This shift comes despite attempts by some major employers to bring workers back to physical offices. The City of Calgary itself implemented a mandatory three-day office policy earlier this year, while energy giant Suncor has pushed for increased in-person collaboration.
Walking through Bow Valley Square last week, I counted seven “For Lease” signs on a single floor. The persistence of hybrid work arrangements has created a commercial real estate challenge that shows little sign of reversing.
Greg Kwong, Regional Managing Director at CBRE, told me, “We’re tracking occupancy rates in downtown buildings at about 65-70% of pre-pandemic levels on peak days. Mondays and Fridays remain significantly lower.”
What’s driving this stubborn attachment to home offices? Calgary Chamber of Commerce surveys point to several factors. Nearly 78% of workers report better work-life balance with hybrid arrangements. Eliminating commutes – particularly challenging during our winter months – saves employees an average of 73 minutes daily.
For Emily Martinez, marketing director at a midsize tech firm, the calculus is simple. “I gain almost two hours of my life back each day I work from home. That’s time with my kids, time for exercise, time I’m not sitting in Deerfoot traffic.”
Companies are responding by reimagining office spaces. Aspen Properties has converted portions of their downtown portfolio into collaboration-focused environments with fewer dedicated desks and more meeting areas. Their occupancy rates have outperformed market averages as a result.
The energy sector, traditionally Calgary’s economic engine, has been surprisingly adaptable. Canadian Natural Resources Limited has maintained more flexible work arrangements than many expected, while smaller producers and service companies have embraced hybrid models to reduce real estate costs.
“The savings are substantial,” notes Rajan Singh, CFO of a midsize energy services firm that downsized its office footprint by 40%. “We’re paying less for space while our employees are happier and equally productive. It’s difficult to justify returning to the old way.”
This trend creates challenges for downtown businesses that rely on office worker traffic. Restaurants in the core report lunch business remains about 25% below pre-pandemic levels, according to the Calgary Downtown Association.
The City of Calgary hasn’t been passive in addressing these shifts. The downtown revitalization plan includes converting older office buildings to residential use. Eight conversion projects are currently underway, which will transform approximately 1.3 million square feet of office space into residential units over the next three years.
Mayor Jyoti Gondek recently emphasized this approach at a downtown business forum. “We need to embrace the changing nature of work rather than fight it. Converting underutilized buildings creates housing and brings new life to downtown beyond traditional office hours.”
The reality is that hybrid work appears firmly entrenched in Calgary’s business culture. A recent Robert Half survey found 83% of local companies now offer some form of remote work option, up from just 27% pre-pandemic.
The commercial real estate market is adjusting, albeit painfully. Lease terms have shortened, with five-year commitments becoming more common than the traditional ten. Building owners are offering unprecedented inducements, including significant improvement allowances and rent-free periods.
For downtown to thrive in this new reality, we likely need more fundamental changes. The successful cities of tomorrow will feature downtown cores that are destinations for experiences, not merely work. More residential conversion, arts venues, and unique retail could transform our core from a 9-to-5 business district to a vibrant, 24-hour neighborhood.
As Fraser puts it, “We’re not going back to 2019. The question is whether we can create a more dynamic downtown that doesn’t rely exclusively on office workers.”
While challenging for commercial landlords, this transformation creates opportunities for Calgary to build a more resilient urban core. The coming years will reveal whether we can successfully navigate this transition or remain caught between the office past and hybrid future.
For now, those quiet Tuesday mornings downtown appear to be our new normal.
