Lethbridge, Alberta – Avison Young’s latest Lethbridge investment market report reveals a high-performing commercial real estate landscape heading into 2026, driven by low vacancy, strong rent performance, and steady demand for quality space.

Retail vacancies remain below 1 per cent, industrial vacancy sits at 3.62 per cent, and office vacancy continues to trend downward, as owner-users acquire more inventory. This tightening is evident across all major asset classes, with retail, industrial, and multifamily demonstrating strong tenant demand and minimal available inventory.

“As long as vacancy remains this low across all major asset classes, quality space in good locations will stay competitive,” said Jeremy Roden, Senior Vice President in Avison Young’s Lethbridge office. “With Lethbridge’s low inventory of available space, it’s only a matter of time before older assets are absorbed through redevelopment.”

Retail demand remains especially strong in suburban retail areas, such as the Crossings in West Lethbridge and the Mayor Magrath Drive commercial corridor in South Lethbridge, continuing to command premium lease rates of $30–$40 per square foot. Despite higher costs, tenants consistently prioritize convenience and visibility, preferring neighbourhood centers and mixed‑use developments.

“Retailers understand the premium associated with being in prime, newly built locations,” added Roden. “For many businesses, being the first or most convenient option is what drives performance.”

Industrial fundamentals remain equally robust. Existing industrial space typically leases at $10–14 per square foot, while new builds start at $15+ per square foot. These rates are supported by strong investor confidence and persistent demand. Although fewer new industrial developments broke ground in 2025, rising land transactions indicate renewed momentum heading into 2026.

“Industrial real estate remains a top choice for investors in the surrounding Lethbridge area,” said Josh Marti, Vice President in Avison Young’s Lethbridge office. “Low availability and strong demand continue to support deal momentum as buyers and sellers work toward alignment.”

Multifamily conditions remain balanced, with a 4.3 per cent vacancy rate and stable rents across the city. Although national multifamily vacancy is rising, Lethbridge remains well positioned, and new, large-scale projects such as the 450 unit Core Crossings project in West Lethbridge are expected to help meet future demand.

“I anticipate that new projects, such as the 450 unit Core Crossing West, will help ease the supply deficit for multifamily housing in Lethbridge,” noted Doug Mereska, Managing Director in Avison Young’s Lethbridge office.

Beyond individual asset performance, broader economic factors such as cost of capital, shifting bond yields, and soft GDP growth continue to influence investor sentiment. Even so, Lethbridge’s fundamentals remain steady, supported by consistent population growth, a diverse economic base, and strong affordability relative to larger markets.

“Commercial real estate pricing in Lethbridge continues to reflect expectations of stable long-term growth,” said Mereska. “While national conditions play a role, Lethbridge’s market activity is closely tied to local demand, which positions the region well for continued investment in 2026.”

With consistently strong demand and limited supply across all major asset classes, Lethbridge’s commercial real estate market is well positioned for continued competitiveness in 2026.