Edmonton's Retail Landscape Transforms as Suburbs Outpace Downtown
A recent analysis from commercial real estate firm CBRE has uncovered a significant shift in Edmonton's retail rental market, with suburban areas flourishing while the downtown core faces ongoing challenges. The report, covering the second half of 2025, highlights a reversal of traditional market dynamics that has reshaped the city's commercial landscape.
Suburban Strength Versus Downtown Decline
According to Matthew Hanson, a CBRE Edmonton sales associate, Edmonton presents "a tale of two cities" when it comes to retail performance. Suburban regions are experiencing robust demand, with low vacancy rates and strong tenant interest. In contrast, downtown Edmonton struggles with high vacancies and reduced rental prices, creating a distinct dichotomy in the market.
"Our suburbs are very strong. They do very well. Lots of tenants want to open there, lots of rooftops around them, lots of people around them, and that helps to push good business," Hanson explained. He noted that suburban retail vacancy rates remain low, particularly in western Edmonton where vacancies hover just above one percent.
Downtown Challenges and Changing Dynamics
The downtown core tells a different story, with central Edmonton experiencing a retail vacancy rate approaching 15 percent. This oversupply has driven down rental prices for available spaces, creating opportunities for entrepreneurs but reflecting broader challenges in the urban center.
Paul Messinger, a marketing professor at the University of Alberta, observed that current market conditions represent a complete reversal from historical norms. "25 years ago, if you could put something downtown at rents that are lower than the perimeter of the city retailers, that's what retailers would dream about. But the way our society has evolved is different now," Messinger noted.
Factors Driving the Retail Transformation
Several key factors have contributed to this retail market transformation. The rise of remote work, which accelerated during the COVID-19 pandemic, has significantly reduced downtown foot traffic as offices and businesses vacated the core. This shift has made suburban locations more attractive to retailers seeking consistent customer bases.
Additionally, the City Centre Mall's receivership has added thousands of empty square feet to downtown's retail inventory, further exacerbating vacancy challenges. While Hanson described this space as filled with opportunity, he acknowledged that revitalization comes at a substantial cost.
Market Statistics and Future Outlook
The CBRE report indicates that Edmonton's overall retail vacancy rate stands at 5.6 percent, which experts consider relatively strong. However, this figure masks the dramatic disparity between suburban and downtown performance. Regional mall rents declined to $70-$130 per square foot in the latter half of 2025, while other retail categories remained stable.
This market evolution reflects broader urban development patterns and changing consumer behaviors that favor suburban retail hubs over traditional downtown shopping districts. As Edmonton continues to navigate these shifts, the retail landscape may require innovative approaches to revitalize downtown while supporting suburban growth.
