Lethbridge office users increasingly switching to ownership over leasing: Avison Young

Lethbridge, Alberta – Avison Young’s latest office market report reveals a dynamic shift in Lethbridge’s commercial real estate market, with office users increasingly choosing ownership over leasing. Office sales in 2025 are on pace to match last year’s strong performance, which saw transactions more than double compared to 2023. This trend signals growing confidence in long-term investment and a preference for control over space and costs.

“Office users are switching things up by choosing to own their space to better control costs and to hold onto the value invested into build-outs,” said Ashley Soames, Senior Associate in Avison Young’s Lethbridge office. “In 2025, most office transactions have been sales.”

This trend is especially strong among professional services, such as medical and dental users, who view ownership as a strategic investment that preserves the value of custom build-outs.

“Office users are making long-term commitments to the Lethbridge market,” added Soames. “We’re seeing a strong preference for ownership, especially in suburban areas where demand continues to outpace downtown.”

Suburban vacancy rates have dropped to 3.31 per cent, compared to 12.07 per cent downtown, reflecting the growing appeal of newer development and the challenges of some of the aging downtown inventory.

“Tenant priorities have shifted in recent years, and we have seen factors like size and cost per square foot take a backseat to visibility and accessibility,” said Jeremy Roden, Executive Vice President in Avison Young’s Lethbridge office. “Tenants see a tangible advantage in being ‘close to rooftops.’”

Broader economic influences, such as the September interest rate cut by the Bank of Canada to 2.5 per cent, have boosted commercial real estate sales transactions and stabilized cap rate fundamentals in Lethbridge.

“National economic stability may not have an immediate effect on the local commercial real estate market, but we have seen the positive momentum of earlier interest rate cuts carry through the summer months and improve local investor sentiment,” said Roden.

This shift toward ownership is reshaping leasing dynamics. With construction costs more than double what they were five years ago, tenants and landlords are adjusting expectations around lease rates, particularly for modern build-outs in premium locations. Tenants are prioritizing newly built real estate in premium locations despite the higher costs.

As Lethbridge continues to grow, particularly in West Lethbridge, Avison Young anticipates strong momentum in mixed-use developments that blend office, retail, and residential space, positioning the city for sustained commercial growth into 2026 and beyond.