A surge of land transactions, population growth, moderate inflation and interest rates are behind a rise in new commercial real estate development in Lethbridge, according to a recent report.
Avison Young’s investment market report predicts an increase in the development of commercial inventory across most asset classes in 2025.
“We’re quite excited about what we’re going to see this year,” said Doug Mereska, managing director of Avison Young’s Lethbridge office.
“We expect a lot of construction, mainly in west Lethbridge, a little bit in the south and a little bit in the industrial park.”
The report says investors looking to capitalize on user demand need new inventory in the community.
Mereska says most retail spaces being built have already been claimed.
“We’re excited about the next phase in the Crossings that’ll be going up between the temple and what’s now McDonald’s,” said Mereska. “It’s going to be about 45,000 square feet being built there and most of it is already pre-leased.”
According to the report, Lethbridge retail remains consistent, with low inventory and steady demand. The current retail vacancy rate in the city sits at 0.9 per cent, with less than 10,000 square feet of leasable retail space available on the west side.
The growing demand for more space is welcome news for construction companies.
“It’s encouraging,” said Richard Thiessen, general manager of Silver Ridge Construction and a director with the Lethbridge Construction Association.
“There’s lots of work going on in both commercial real estate and in manufacturing and business growth.”
The industrial vacancy rate sits higher than retail at 4.1 per cent. Mereska says the rate represents unusable space that will likely require redevelopment before it becomes appealing to tenants.
He says land sales for new industrial development will likely surge this year in the Sherring Industrial Park and east of 43rd Street North.
Thiessen says they’ve already noticed a boost in business.
“The work that’s already committed in both Lethbridge and surrounding area has had a very high increase in our workload,” Thiessen said.
With projects like the new temple on the west side, the University of Lethbridge land development on the south end of campus and growth in the industrial sector, Mereska doesn’t expect the need for new development to slow down any time soon.
“Anyone that wants to come to Lethbridge, they need to build new construction,” Mereska said. “There are no vacant spaces, so I think we’re going to keep going forward.”
“For the next two or three years, I don’t see a slowdown in the construction sector.”
