A new report from Avison Young shows there is growing demand for quality office space in Lethbridge, despite costs to build them doubling since 2019.
“Office users are prioritizing flexible, functional spaces that support their corporate culture and help retain staff, over the per-square-foot cost of the space,” said Ashley Soames, senior associate in the Avison Young Lethbridge office. “Successful landlords are taking this shift in mentality into account and are actively investing in their spaces.”
Inflation has driven increased costs for new construction and slowed development, according to the report. It notes there is optimism among investors though, with 36,676 square feet of new office buildings in the planning stages in the city.
The average office vacancy rate in Lethbridge decreased 2.3 per cent over the last year to 11 per cent. The bulk of the vacancies are aged spaces, which the report notes may need redevelopment to attract and retain tenants.
“Lethbridge has seen positive net absorption and maintained steady lease rates with moderate increases,” said Soames. “We are optimistic about what the future of office work will look like in our city.”