Lethbridge retail market report

October 2023

Retail commercial real estate (CRE) in Lethbridge has had sustained demand in 2023. Although the retail CRE market is being affected by national economic headwinds, growth continues in smaller markets such as Lethbridge. With a population growth rate of nearly 5% since 2019, Lethbridge has a growing consumer base that supports local demand for retail goods and services. Leasing activity has been consistent, and there is very little vacancy due to a slowdown in new builds and a more conservative market sentiment. These trends have primed Lethbridge for an increase in new retail construction in 2024, despite inflated costs.

Mixed-use developments are the model commercial development and represent the majority of new retail space in Lethbridge. With the inclusion of different asset classes, these retail centres cater to the communities they serve and promote a walkable, full-service shopping experience. Although the grocery-anchored, open-air retail plaza has long been the standard for retail developers, these offerings are pivoting from the traditional retail tenant structure to include office space, residential development, hospitality, religious institutions, and drive-thru restaurant space. Additionally, rather than seeking traditional commercial sites, these plazas integrate into communities where market share is supported by proximity.

3 key trends


01 – Rental rates

Rental rates in Lethbridge tend to fall in one of two categories: higher rates in newly built space and lower rates in existing space. Rates for newer builds have been driven by high construction costs and average between $30 - $35 per square foot (psf) in most of South and West Lethbridge. Existing space, primarily in the downtown area, offers lower rates, averaging between $12 - $16 psf. The increase in asking rental rates in existing space follows economic growth and, in new space, reflects the inflationary pressures of high construction costs.

02 – Vacancy and demand

With a slowdown in the construction of new space and sustained demand, retail vacancy in Lethbridge is extremely low. Wellness services, which now include private education services and daycares, continue to backfill traditional retail space and increase competition for prime retail locations. Landlords are acting cautiously and increasingly seeking national tenants and longer lease terms to counter some larger economic uncertainty. Small markets are increasingly appealing to national tenants as they offer a larger market share and room for growth.

03 – Mixed-use plazas

Mixed-use retail plazas in Lethbridge include office, residential, and other asset classes. Predominantly anchored by a grocery tenant, these plazas also offer tertiary retail offerings such as liquor, pharmaceuticals, and personal goods sales that operate in dense outparcel development. These outparcels share parking allowances, services, and fire suppression for a very efficient system. The expansion of wellness services and restaurants offering curbside pickup have contributed to the success of this development style. These plazas are also appearing in smaller markets, such as Crowsnest Pass, and attracting national tenants.

Retail vacancy

overall estimated Lethbridge retail vacancy

1,988 sf

New retail sf

Average size of new retail concept


Average asking base rent

per sf, per year as of Q3 2023


Average TIA

per sf, per year as of Q3 2023


Average additional rent

per sf, per year as of Q3 2023

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Get in-depth retail 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 retail properties.

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