Report shows tenant confidence on the rise in Lethbridge

By Alejandra Pulido-Guzman - Lethbridge Herald on July 19, 2022.

Herald photo Longer lease terms are showing an increase in office tenants' confidence across the city, a recent Avison Young Lethbridge Office Market Insights report shows.

LETHBRIDGE HERALDapulido@lethbridgeherald.com

Longer lease terms are showing an increase in office tenants’ confidence across the city, according to a recent Avison Young Lethbridge Office Market Insights report.

The report states that due to the COVID-19 pandemic the need for flexible work, co-working spaces, worker’s health and wellbeing, and a better office life for the future emerged, and with that, demands for real estate with improved amenities and working environment skyrocketed.

“Amenities have an increased importance to office users as companies source out space to lease that offers more for their employees,” said Shane Garner, associate at Avison Young in Lethbridge, in the release.

When it comes to the downtown area office market, the report indicates that there has been a shift away from downtown office leasing due to aged inventory and lack of parking, but they also highlight the fact that the post office building offers tenants the perceptive status of modern office space in a historic landmark.

The report also looks at the suburban office market, and states that each area of the city offers different drivers for development.

It highlights the fact that demand for built-to-suit space requires businesses to look outside the downtown area and rent rates are higher in new builds.

The report shows that West Lethbridge is a growing market with the highest concentration of residential population in Lethbridge, and the Crossings development servicing the area with more room to grow as there is a 7.92 acre area shown as phase 2 of the development.

The report indicates that despite tenant confidence on the rise, Lethbridge remains a conservative market when it comes to new builds, and they are generally not completed until 60 to 70 per cent of spaces are pre-leased.

“Although the office sector is resilient, in a post-pandemic market there will be forced evolution in supply and demand with flexible solutions leading the way,” said Ashley Soames, Senior Associate, Avison Young in Lethbridge, in a release.

Overall, the report shows that the current Lethbridge office vacancy is at 13.3 per cent, with the local market experiencing a three per cent vacancy increase between 2019 and 2022.

According to a press release, being situated in an agricultural area and not being as dependent upon the oil industry as many Alberta communities, fluctuations in the economy are less severe in Lethbridge than the provincial average.

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