Lethbridge, Alberta – Avison Young’s latest Lethbridge investment market report predicts an increase in development of new commercial real estate (CRE) inventory across most asset classes in 2025. For investors looking to capitalize on user demand, there is a need for new inventory in the community. With a surge in land transactions in 2024, spurred by moderate inflation and interest rates, the Lethbridge Avison Young office anticipates a robust construction season, with new commercial developments expected to break ground. 

“We expect that 2025 will be a strong construction season for commercial real estate in nearly all asset classes as local demand drives the need for new inventory,” said Jeremy Roden, Executive President in Avison Young’s Lethbridge office. “In the Crossings, for example, preleasing has been an important factor in the progression of the development. Since first entering the market at a slower pace, it has gained momentum, with possession expected for Spring 2026.” 

Lethbridge retail remains consistent, with low inventory, low vacancy, and steady demand. Current Lethbridge retail vacancy rate sits at 0.9 per cent, with less than 10,000 square feet (sf) of leasable retail space available in West Lethbridge. There is community excitement surrounding Phase 2 construction at the Crossings because it will bring new build-to-suit options and quality tenants to the local market. 

“Lethbridge is still realizing steady growth in new development, but these large-scale projects operate on extended timelines; last year much new retail development was in its planning phase and this year, its implementation phase,” added Roden. “Big deliveries are always slow moving, yet we can’t help but get excited for the future.” 

The Lethbridge industrial vacancy rate currently sits at 4.1 per cent, predominantly representing unusable space that will likely require redevelopment before it becomes appealing to tenants. Industrial real estate has been the preferred asset class for investors post-pandemic. Land sales for new industrial development will likely experience a surge in 2025 in Sherring Industrial Park as well as tertiary industrial parks such as the Frontier Business Park, east of 43rd Street North, and the Rocky Mountain Equipment Picture Butte Industrial development. 

"The improved market sentiment and lower cost of capital have created a favorable environment for investment,” said Doug Mereska, Managing Director in Avison Young’s Lethbridge office. “We expect to see a high volume of transactions and the development of new inventory in most asset classes. Lethbridge's diverse local economy and affordability make it an attractive location for both investors and businesses. We are optimistic about the year ahead." 

Although analysts are forecasting some headwinds, such as increased unemployment, slower population and GDP growth, Lethbridge’s diverse economy and comparative affordability will continue to drive demand. 

“We are looking forward to the steady lowering of interest rates over the next year to stimulate commercial real estate transactions in every asset class,” added Mereska. “National economic stability may not have an immediate effect on the local market, but we will slowly start to see the positive benefits in the near future.”