Commercial real estate is both a catalyst and a reliable gauge for measuring the revitalization of downtown Edmonton. Lease rates, amenities, mixed-use spaces, market flux, mergers and acquisitions, inventory, vacancy and absorption stats and trends are all important aspects of Edmonton’s commercial real estate.
The numbers and trends confirm that Edmonton’s downtown has transformed over the last 10 years, with more than $4.7 billion in developments in the residential, office, educational, cultural and entertainment sectors.
When it comes to the bottom line, the most recent Avison Young Edmonton Office Market report tracks that, although Q1 2025 was the second consecutive quarter of negative absorption, downward pressure has decreased. There was 56,920 square feet of negative absorption, which was an improvement from the negative absorption of 121,500 square feet at the end of last year.
The report also showed that the downtown sector had an overall vacancy increase of 36 basis points, with Financial B and Government C class space having the only reduction in vacancy.
“There are many factors affecting Edmonton’s office market,” explains Mark Anderson, vice president of CBRE in Edmonton, “but one of the most significant is the cost of construction. As construction prices continue to rise, due mostly to tariff uncertainty and labour shortages, the feasibility for companies to relocate and build new offices has fallen. It invariably puts more pressure on companies to stay within their current premises and it slows market activity.
“This can also slow the rate at which vacancy is absorbed. Those who may otherwise benefit from relocating and marginally expanding their office footprint may be pressured to stick with a space that is a little too small and make it work.”
According to Robynn Holstein, executive director of NAIOP Edmonton, the voice of commercial real estate development in the Edmonton region, “Our area’s commercial development industry is facing key challenges, including high downtown office vacancies, reduced foot traffic and retail instability. Lower pedestrian activity driven by hybrid work trends has hurt street-level retail and hospitality, making it harder to sustain vibrant mixed-use areas.”
She adds that access issues, due to ongoing infrastructure projects, uncertainty in permitting, underutilized sites and being the highest in non-residential tax rates in the region, are further deterring investment.
NAIOP points out that, despite rising costs and labour shortages adding pressure, there is encouraging momentum in mixed-use and suburban projects. Edmonton’s commercial real estate professionals agree on the positive value of mixed-use space.
“Mixed use is absolutely essential to a healthy and vibrant downtown and urban neighbourhoods in general,” explains a representative of the Edmonton Downtown Business Association (EDBA). “That could mean several different things. Residential with retail on the ground floor, a tower that is split between residential and office or even a hotel mixed with retail and residential. There are endless combinations to make the most out of downtown real estate.”
The EDBA references successful mixed-use properties, including Connect Tower and Connect Residences (the former Phipps-McKinnon building), where the residential is still under construction and the ground floor retail is fully leased; The Legends Residences; SKY Signature Suites, Stantec Tower and others.
Edmonton’s zoning bylaws allow for various mixed-use zones, including residential mixed use, commercial mixed-use and general mixed use. the zone categories support housing, recreation, commerce and employment while enhancing public spaces and pedestrian-friendly environments.
Holstein notes that, “Mixed-use developments are playing a pivotal role in reshaping Edmonton’s urban landscape, offering integrated spaces that combine residential, commercial and recreational uses. These projects not only enhance the vibrancy of neighbourhoods but also contribute to economic resilience and community engagement.”
Some other successful examples of Edmonton’s mixed use projects are the City Centre Mall, the major mixed-use redevelopment project credited with jump starting the revitalization of downtown Edmonton; the high-profile Rogers Place and ICE District, Canada’s largest mixed-use sports and entertainment district; The Parks, a multi-use complex at the corner of Jasper Avenue and 108 Street; West Block Glenora, the 3.5 acre mixed-use site combining high rise residential units with office and retail spaces and The Switch at Station Lands, the transformative project featuring two residential towers built on top of a retail podium.
Anderson suggests a mixed-use qualifier, “Mixed-use developments are valuable but not as important as having mixed uses in proximity to each other. Edmonton needs more residents to choose to live downtown, whether it be in mixed-use buildings or dedicated residential properties. Mixed-use buildings are great, but cohabitating those uses together adds cost and planning. These properties make a lot more sense in settings where there is limited land, but Edmonton does not have this constraint in many of the areas where attracting residents is a priority.”
The experts agree. While mixed-use development and other factors are vital for downtown revitalization, a basic key ingredient is people.
“A strong downtown starts with people,” emphasizes Holstein. “Revitalizing Edmonton’s core means attracting more people to live, work and spend time downtown. This is key to addressing high vacancy, safety concerns and economic uncertainty. Investing in housing, cleanliness, public safety, business growth and vibrant public spaces should be considered minimum expectations of all Edmontonians, in addition to public and private policies that support return to office and clear City policies and programs that enable private investment.”
She mentions some Edmonton downtown visuals, which are revitalization obstacles.
“A strategy for addressing abandoned or underdeveloped sites is important, as some properties affect both the perception and value of the entire area. Acting strategically and without delay will help maintain momentum, attract new investment and deliver lasting benefits for the entire city.”
The EDBA emphasizes that increasing downtown’s residential population is the single most important factor for revitalization.
“Property owners are getting creative with their assets, with options like much more recreation uses in existing retail spaces, healthcare assets and other development opportunities. On the government side, we have a major problem with old and deteriorating infrastructure in areas of downtown, like the entrances to our LRT stations, that detract from vibrancy and economic viability. The City making the necessary investments would also make a big difference.”
Anderson stresses some basics for downtown revitalization.
“Downtown must be safe, clean and attractive. The major factors are improvements to real and perceived safety and security concerns, improvements in maintenance and cleanliness and attracting more people – residents or office workers.”
He is revved about the momentum and the future of Edmonton downtown.
“We expect 2025-2026 to be another good year for revitalization in our core. Progress has and is being made, maybe not at the pace that some would like to see, but there are many reasons to be optimistic about the direction the core of our city is heading.”
