Lethbridge industrial market report

April 2023

Industrial commercial real estate (CRE) remains the most desirable asset class for Canadian investors. In Lethbridge, strong fundamentals and stable performance continue to support industrial CRE investment. Owner-users have also been extremely active in industrial CRE purchases and now make up a larger percentage of occupiers than tenants in Lethbridge. Owner-users have taken advantage of the low interest rates of the pandemic and opted to purchase instead of leasing their space which offers them the ability to control their costs and build equity. Tenants in Lethbridge are encountering a tight vacancy rate of 3.9%. Due to the inflated costs of construction, coupled with increased interest rates, not enough new inventory is being built in Lethbridge to meet the demand. Industrial lease rates will have to increase to rebalance the market and support local development.

Three key trends:


01 - Low vacancy and high demand in Lethbridge

The sustained demand for industrial real estate since 2020, especially from owner-users, has left the market inventory extremely tight. Nationally industrial vacancy is below 1%. In Lethbridge, the industrial vacancy rate may seem high, at 3.9%, but that number represents a very small amount of useable square footage with most of it being aged or obsolete.

02 - Rental rates vs. construction costs

Due to a cost deficit between inflated construction costs and low rents, new development coming to market has been slow. Lethbridge has been below the market average for industrial rents in similar communities. While tenants may be challenged initially, higher rents will stimulate development and rebalance the local market.

03 - Labour and employment

Lethbridge population grew by almost 3,000 new residents in 2022. New development and large format industrial projects will continue to support the growth of Lethbridge and area in 2023.
10.11 M SF


Estimated total industrial inventory in the Lethbridge market

Vacancy rate

Overall Lethbridge industrial vacancy rate
126,000 SF

Under construction

Total industrial area currently under construction in the Lethbridge market
$9.03 PSF

Average base rent

Average base rent for Lethbridge industrial buildings
$12.83 PSF

Average gross rent

Average gross rent for Lethbridge industrial buildings

Average gross rent increase

Average gross rent increase (year-over-year)
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Get in-depth industrial market reports and insights from commercial real estate experts in the Lethbridge area. Avison Young advisors look at Lethbridge commercial real estate activities and the latest Lethbridge statistics to provide you expert market research on Lethbridge industrial properties.

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