Alberta’s economy and commercial real estate market move with energy. Always have, probably always will.
But the relationship is evolving. Let’s look at where energy and Alberta commercial lending stand in 2026.
The Energy Recovery
Start with the good news: energy is doing reasonably well in early 2026.
Oil prices are trading in the $70 to $85 USD per barrel range for WTI. That’s not the $100+ we saw briefly in 2022, but it’s profitable for most Canadian producers.
Natural gas prices have been more volatile, but they’ve recovered from the lows of 2023. LNG export development is supporting longer-term gas outlook.
Canadian energy companies are generating cash flow, returning money to shareholders, and making selective new investments. After years of capital discipline through 2020-2023, there’s cautious optimism.
This is showing up in Alberta’s economy. Employment is growing, wages are rising, population is increasing as people move to Alberta for opportunities. Calgary and Edmonton are seeing economic strength.
Calgary Commercial Real Estate
Calgary’s commercial market reflects energy sector health more directly than anywhere else in Canada.
Downtown office is still dealing with elevated vacancy, around 25% to 30% citywide, though that includes significant sublease space. The legacy of energy sector downsizing from 2015-2020 is still present.
But there’s improvement. Some companies are expanding, new tenants are entering the market, and the worst of the vacancy might be behind us. Office rents have stabilized after years of declines.
Class A buildings with good amenities are seeing decent leasing activity. Class B and C buildings remain challenged.
Suburban office is performing significantly better than downtown. Tech companies, service businesses, and energy firms that don’t need downtown prestige are choosing suburban locations with easier parking and lower rents.
Industrial is strong. Calgary’s logistics position serving Western Canada and Alberta’s resource economy supports warehouse and distribution demand. Vacancy is low, rents are rising.
Multi-family is benefiting from population growth and strong rental demand. Vacancy rates have tightened significantly from 2020 levels. This is one of the bright spots.
Retail is recovering along with the broader economy. Consumer spending is up, retailer confidence is improving.
Edmonton Market Dynamics
Edmonton follows similar patterns but with some differences.
Edmonton’s economy is less concentrated in energy head offices than Calgary’s. It has government, post-secondary education, and more diversified industry. That provides some stability.
Office vacancy is elevated but not as extreme as Calgary, running around 15% to 18%. The market never had the massive oversupply that Calgary developed.
Industrial is very strong, tied to serving northern resource development and provincial distribution needs.
Multi-family fundamentals are solid. Population growth and a relatively affordable housing market support rental demand.
Edmonton property values are generally more affordable than Calgary, which creates opportunities for investors but also reflects smaller market scale and less intense demand.
Financing Availability
Here’s what matters for borrowers: commercial lending in Alberta has improved significantly from the 2015-2020 period.
During the oil price crash and subsequent weak years, some lenders pulled back from Alberta entirely. They viewed the whole market as risky because of energy concentration.
That’s changed. Energy recovery and economic diversification have restored lender confidence.
Multi-family and industrial properties are getting favorable financing terms. Lenders view these sectors as strong regardless of energy prices. You’re looking at 70% to 75% LTV, competitive rates in the 5% to 6% range.
Retail with good tenants and locations is financeable at reasonable terms, 65% to 70% LTV.
Office remains more challenging, particularly downtown Calgary office. Lenders want to see strong occupancy, creditworthy tenants, and reasonable asking prices. Loan-to-value ratios are lower, often 55% to 65%, and rates are at the higher end of commercial ranges.
Agricultural lending in rural Alberta is active. The Livestock sector is doing well, and farmland financing is readily available.
The key message: Alberta is no longer viewed as a distressed market by lenders. It’s being underwritten based on specific property fundamentals, not broad regional avoidance.
Energy Price Sensitivity
Alberta commercial real estate and lending remain sensitive to energy prices, but the relationship is more nuanced than it used to be.
At $75 to $85 oil, Alberta’s economy does well. Companies are profitable, employment is strong, real estate demand is solid.
If oil drops to $55 to $65, things get tighter. Some producers struggle, capital spending declines, employment softens. Commercial real estate weakens.
If oil spikes to $100+, you get boom dynamics. Rapid hiring, wage inflation, real estate demand surge, speculation. This usually ends badly when prices correct.
The sweet spot for sustainable Alberta economic health is probably $70 to $90 oil. High enough to be profitable, not so high that it creates unsustainable boom dynamics.
Natural gas prices matter increasingly as LNG export capacity develops. Stronger gas prices support drilling activity and employment even if oil is moderate.
Diversification Progress
Alberta’s economy has diversified more than many people realize.
Tech sector employment in Calgary has grown significantly. Companies like Benevity, Helcim, Shareworks, and others have built substantial operations. AWS and other tech giants have invested in Calgary.
Renewable energy development is creating jobs and investment. Alberta has excellent wind and solar resources, and there’s significant activity in clean energy.
Film and television production has grown as Alberta offers tax credits and lower costs than Vancouver or Toronto.
Tourism and hospitality continue to be significant, with Banff, Jasper, and other destinations drawing visitors.
Agriculture remains a major part of the economy, somewhat insulated from energy price swings.
This diversification makes Alberta’s economy more resilient than it was a decade ago. Commercial real estate and lending benefit from less concentration risk.
Office Market Specifics
Downtown Calgary office deserves special attention because it’s such a visible challenge.
There’s roughly 15 to 20 million square feet of excess office space in downtown Calgary, accumulated from energy company downsizing and flight to quality from older buildings.
Some of this space is being converted to residential. Conversion economics are complex and require subsidies in many cases, but projects are happening.
Some buildings might ultimately be demolished. In a few cases, that’s likely the highest and best use.
New office construction has essentially stopped, which will eventually allow demand to catch up with supply. But this is a multi-year process.
For office building owners needing to refinance, lenders are taking careful case-by-case approaches. Strong buildings with good occupancy and credit tenants can get financing, though at lower LTV than peak years. Struggling buildings with high vacancy are very difficult to finance conventionally.
Private lending has been active in Calgary office for properties that can’t get conventional financing. Rates are 8% to 12%, and loan terms are shorter, but capital is available for properties with reasonable value and cashflow.
The Calgary-Edmonton Comparison
Investors often ask: Calgary or Edmonton?
Calgary has larger market scale, more corporate head offices, stronger high-wage employment, and generally higher property values. It also has more volatility tied to energy.
Edmonton has more economic stability from government and education sectors, more affordable property values, and less dramatic boom-bust cycles. It also has less upside potential in boom periods.
For conservative investors, Edmonton might be more attractive. For those comfortable with more volatility and seeking higher upside, Calgary can make sense.
Lenders don’t have strong preferences between the two cities. They evaluate properties based on fundamentals regardless of which city they’re in.
Regional Alberta Opportunities
Beyond Calgary and Edmonton, there are opportunities in regional Alberta.
Red Deer, Lethbridge, Medicine Hat, Grande Prairie, Fort McMurray, these cities have their own dynamics. Some are tied to oil and gas, others to agriculture, forestry, or local industry.
Property values in regional markets are generally affordable, and cap rates are higher than major cities. But liquidity is lower and lender options are more limited.
For investors with local knowledge or willingness to be hands-on, regional markets can offer good risk-adjusted returns.
Financing is available through credit unions and regional lenders who know these markets, even if major banks are less active.
Agricultural Sector Strength
Alberta agriculture is performing well and creating financing opportunities.
Beef cattle economics have been strong. Alberta has the largest cattle herd in Canada, and ranch lending is active.
Grain and oilseed production in southern and central Alberta supports farmland values. Irrigation districts with water rights command premium prices.
Specialty agriculture including potatoes, processing vegetables, and niche production provides diversification.
Agricultural lending in Alberta is readily available from Farm Credit Canada, major banks, and credit unions. Terms are competitive for strong operators.
Farmland values have been stable to modestly appreciating. They didn’t see the surge that Saskatchewan and Manitoba experienced, but they’ve been steady.
Population Growth Factor
Alberta is attracting people again, which is fundamental to real estate demand.
Interprovincial migration has turned positive. People are moving to Alberta from Ontario, B.C., and Atlantic Canada for affordability and opportunity.
International immigration to Alberta has increased, particularly to Calgary.
Population growth supports housing demand (multi-family and single-family), retail, services, and infrastructure needs.
This demographic tailwind is independent of short-term energy price fluctuations and provides underlying support to real estate markets.
The Political and Fiscal Environment
Alberta’s provincial government is business-friendly, with relatively low taxes and pro-development policies.
No provincial sales tax makes Alberta attractive for business location decisions.
Corporate tax rates are competitive with other provinces.
Resource royalty revenues mean the province can invest in infrastructure without the tax burden seen elsewhere.
These factors support business activity and economic growth, which flows through to commercial real estate demand.
Looking Ahead
Where are Alberta and energy heading over the next few years?
Energy transition is real, but oil and gas remain important for decades. Alberta producers are among the most efficient globally and will continue to be significant players.
LNG export capacity coming online will support natural gas prices and activity.
Economic diversification will continue, reducing but not eliminating energy dependence.
Commercial real estate should benefit from population growth, economic activity, and restored lender confidence.
The key risks are energy price collapse or aggressive climate policies that curtail oil and gas production faster than alternatives develop.
But the base case is for continued moderate economic strength and improving commercial real estate fundamentals.
Work With Alberta Market Specialists
Alberta commercial and agricultural lending requires understanding both the opportunities and the unique regional factors.
At Creek Road Financial Inc., we work with borrowers across Alberta. We understand how lenders view Alberta markets, which lenders are most active, and how to position properties for optimal financing.
Whether you’re investing in Calgary office, Edmonton multi-family, rural Alberta farmland, or regional commercial properties, we can help you secure appropriate financing.
Let’s discuss your Alberta financing needs and how to navigate this market effectively.