Downtown Calgary office vacancy trended lower in the second quarter, says a new Avison Young report.

Vacancy dipped a modest 130 basis points year-over year 26%. The Beltline district, located just off downtown, witnessed a larger decrease (213 bps) from the second quarter of 2023.

Best-in-class office buildings are driving the Calgary market, said Avison Young. Class AA vacancy is approaching 10% as employers show strong appetite for high-quality premises.

In the East Village, vacancy fell 8.7% as office space previously available in the Bow, considered the crown jewel of the sector, was removed from the market.

The city’s Downtown Development Incentive Program, which provides funding for conversions of office spaces to residential and other uses, continues to generate interest, said Avison Young. DIP was paused in 2023 after its budget was exhausted, but several of the program’s conversion projects are underway and scheduled for completion in 2025.