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Downtown office space going into the pandemic

With the prospect of more people working from home after the pandemic, we are likely to see even more empty offices

By ATB Economics 26 May 2020 1 min read

For those who can, working from home has become de rigueur during the pandemic. Saturday Night Live even did the final three shows of its 45th season “at home” by airing sketches recorded in the homes of individual cast members rather than live in the studio.

It’s too early to tell how many of these temporary working from home arrangements will continue after the pandemic recedes. But even if it’s only a portion of the total, this would lead to reduced demand for communal workspace in downtown office towers and suburban office parks.

Here in Alberta, reduced employment in the oil and gas sector, a deep recession in 2015-16 and a sluggish recovery had already pushed office vacancy rates to painfully high levels.

According to CBRE statistics on office space for the first three months of 2020 before the pandemic was in full effect, the vacancy rate in Calgary’s downtown was sitting at 26.5 per cent. About a fifth (20.3 per cent) of suburban office space was also unoccupied.

Things were a little better in Edmonton, but vacancy rates were still high at 19.2 per cent in the downtown and 19.9 per cent in the suburbs.

For comparison, the downtown office vacancy rate was just 2.2 per cent in Vancouver, 2.0 per cent in Toronto and 6.3 per cent in Montreal.

Although bad news for the owners and operators of the buildings, the construction sector and the many businesses that provide services to the buildings and their occupants, the upside to the high vacancy rates in Calgary and Edmonton was more space available at cheaper prices for those businesses and organizations that still needed it. 

Overall, however, the empty offices were a sign of an economy struggling to achieve its potential.

With the prospect of more people working from home after the pandemic and a long and slow economic recovery, we are likely to see even more empty offices and, as a result, tough times for those who rely on bustling offices. There will be opportunities associated with this (e.g., more products and services aimed at those working from home), but the adaptation process will be bumpy and difficult for many.

Before the pandemic was in full effect, the vacancy rate in Calgary’s downtown was sitting at 26.5%

Before the pandemic was in full effect, the vacancy rate in Calgary’s downtown was sitting at 26.5%


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