Startup energy companies are expected to become the next primary drivers of Calgary’s office market, signalling a shift in who will drive future demand, says a new Avison Young report.

Despite an anticipated spike in sublease space, energy startups are emerging as a silver lining as they actively tour and lease spaces under 10,000 square feet, serving as a leading indicator of the market’s broader recovery, said the company. As they scale, these firms are anticipated to gradually backfill vacancies left by larger energy companies that have consolidated their footprints.

The region’s office sector showed stability in the first quarter, with overall vacancy at 22.8%, a marginal 0.1% quarter-over-quarter decline. Downtown vacancy mirrored this modest improvement.

Rightsizing and consolidation within the energy sector continue to be the defining structural forces reshaping Calgary’s downtown office market, as major players reduce space requirements.

In the Beltline, leasing activity remains steady, but declining vacancy is being driven primarily by the removal of office inventory for residential conversion.

Meanwhile, the suburban office market has demonstrated resilience, recording three consecutive years of positive annual absorption. Suburban office vacancy posted a modest 0.5% decline year-over-year.

The overall office market posted 46,589 of positive absorption in the first quarter of 2026, while vacancy was virtually unchanged at 16.2%.

Pictured: Downtown Calgary

Photo: Courtesy of Avison Young