The downtown Lethbridge clock tower and Canada Post office. (Image Credit: Lethbridge News Now)

By David Opinko

Demand for Lethbridge commercial spaces high, but inventory low

Feb 9, 2026 | 3:30 PM

A new report shows that entrepreneurs and investors in Lethbridge are continuing to fight over limited space.

Avison Young says that, in the fourth quarter of 2025, the vacancy rate for retail spaces was less than one per cent.

Jeremy Roden, Principal and Senior Vice President, states that “The Lethbridge retail market remains steady, with low inventory, low vacancy, and consistent demand for retail space across the city.”

Tenants paid an average of $23.64 per square foot for retail locations last year, which he describes as stable.

However, the gap between new and existing spaces has widened, and it also depends heavily on the location.

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“Downtown retail space typically leases at $12-16 psf, while suburban commercial areas range from $30-40 psf,” says Roden. “Drive-thru restaurant space remains in high demand and often exceeds $40 psf. Despite higher suburban rates, tenants continue to prefer neighborhood retail centers.”

Approximately 3.62 per cent of industrial spaces were vacant, and prices were typically around $11.47 per square foot.

You would have an easier time finding an office, as nearly 10 per cent of units were available. They went for an average of $16.09 per square foot.

“Vacancy remains low across all asset classes, with office vacancy holding at stable levels for the market. User demand for new or renovated space in strong locations is consistent across retail, industrial, and office. Rent growth remains positive, although the pace has eased slightly in line with national trends,” explains Roden.

The report notes that Lethbridge is in a “generational transition” with the last of the Baby Boomer generation (born 1946-96) reaching retirement age by 2030.

According to Avison Young, a number of buildings that have long been privately owned are now being transferred to small, locally-based investment groups and limited partnerships. They say many of these investment buyers are more “product-driven” and focused on their own asset metrics.

With the city, particularly on the west side, having a younger-than-average population, Broker and Managing Director Doug Mereska says there will continue to be rising demand for housing and services.

“This creates a market environment that can be more stable and more reflective of on-the-ground activity than national trends. For investors taking a long-term view, the region offers opportunities for steady growth,” says Mereska.

The findings in Avison Young’s survey largely mirror a study commissioned by Economic Development Lethbridge. It stated that Lethrbidge would need more than 10,000 homes over the next 20 years to keep up with population growth, and that many business sectors were struggling with “severe supply constraints.

READ MORE: Lethbridge needs 10,800 new homes by 2045: report

A group of investors recently announced that they are planning $300 million worth of new developments in west Lethbridge, which would include the area’s first full-service hotel, as well as a seniors’ living community, hundreds of housing units, and a Wendy’s.

READ MORE: $300M in new development planned for West Lethbridge

You can read the full report from Avison Young here.