As Calgary’s commercial real estate (CRE) market continues to evolve, many business owners and investors face a key decision: Should I lease or buy commercial space in Calgary? With rising lease rates, limited inventory, and growing demand in both the retail and office sectors, the question is more relevant than ever. This blog explores the advantages and drawbacks of both options to help guide your decision-making in 2025 and beyond.
Can I Buy Commercial Space Instead of Leasing in Calgary?
Yes, you can. Calgary offers several opportunities for business owners to buy retail condos or owner-user properties, particularly in newer developments or mixed-use buildings. This approach can be especially beneficial for businesses with stable operations and a long-term presence in the city. However, the choice between leasing and buying depends on several financial, operational, and strategic factors.
1. Financial Considerations
Upfront Costs
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Leasing typically requires a smaller upfront investment, usually just a security deposit and initial rent.
- Buying involves a larger financial commitment, including a down payment (often 25–35%), legal fees, due diligence costs, and potential renovation expenses.
Long-Term Costs
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Lease payments can increase over time due to inflation and market adjustments.
- Ownership offers long-term cost stability, particularly if you lock in a fixed-rate mortgage.
Note: In Calgary and most of Canada, many commercial leases are triple net leases, where tenants pay a share of property taxes, insurance, and maintenance costs. These expenses are in addition to base rent and can significantly affect ongoing costs.
Tax Implications
- Lease payments are generally tax-deductible as business expenses.
- Owners may benefit from deductions on mortgage interest, property taxes, and depreciation, potentially improving overall tax efficiency.
Financing Challenges
- Commercial mortgages often require larger down payments than residential ones and may come with shorter amortization periods, which can increase monthly costs.
2. Flexibility and Business Growth
Leasing
- Ideal for startups or businesses anticipating change or growth.
- Easier to relocate or upsize/downsize as needed.
- May come with restrictions on renovations or subleasing.
Buying
- Better for businesses with long-term plans and predictable space requirements.
- Complete control over layout and upgrades.
- Potential to lease unused space for passive income.
3. Control Over Your Space
Leasing
- Subject to landlord policies on signage, renovations, and lease renewals.
- Risk of non-renewal or changes in lease terms at the end of your term.
Buying
- Full control over property use, branding, and interior/exterior design.
- Greater stability with no risk of eviction due to landlord decisions.
4. Calgary CRE Market Conditions in 2025
- Retail availability in Calgary has dropped to 2.8%, with rents trending upward due to limited new development and strong tenant demand.
- Office vacancy has declined significantly, and average net asking rents have increased to \$15.84/sq. ft. citywide and \$16.31/sq. ft. downtown.
- With construction costs rising and property values remaining stable or increasing, many investors and owner-users are exploring buying as a long-term strategy.
(Sources: Data sourced from Cushman & Wakefield Q1 2025 Marketbeat, JLL Calgary Retail Insight, and City of Calgary Assessment Reports)
5. Building Equity and Wealth
Leasing
- Offers no equity accumulation.
- Payments go entirely to the landlord with no long-term asset gain.
Buying
- Builds equity over time through mortgage payments.
- Potential for property appreciation, though real estate markets can fluctuate and gains are not guaranteed.
- May generate additional income through subleasing.
6. Maintenance Responsibilities
Leasing
- Landlord typically manages common area maintenance and major building repairs.
- Tenants are usually only responsible for interior maintenance.
Buying
- Full responsibility for property upkeep, repairs, and capital improvements.
- Offers more control but also increases risk and overhead.
7. Risk Management
Leasing
- Lower risk if market conditions change or business needs shift.
- Easier to exit or transition with shorter lease terms.
Buying
- Greater exposure to market fluctuations.
- May be harder to sell or relocate quickly if the business model evolves.
8. Strategic Fit
Leasing is best for:
- New businesses
- Companies expecting rapid growth
- Tenants that prioritize flexibility
Buying is ideal for:
- Owner-users with long-term stability
- Businesses seeking control and cost predictability
- Investors looking to build equity and income streams
Final Thoughts: Lease vs Buy in Calgary CRE
There’s no one-size-fits-all answer when it comes to leasing vs. buying commercial space in Calgary. Your decision should reflect your business’s growth trajectory, financial stability, and long-term strategy. With rising lease rates and increasing demand for quality commercial space, buying a retail condo or owner-user property can be a smart move—but it requires upfront planning, capital, and a strong understanding of market conditions.
Looking for personalized advice on whether to lease or buy? Reach out today for a personalized consultation.
At Leaseco Realty, we help Calgary businesses navigate these choices with market intelligence and tailored real estate solutions. Whether you’re leasing for flexibility or buying to invest in your future, our team is here to guide you every step of the way.
Want to learn more about Commercial Real Estate in Calgary? Click here for more answered questions.