Keeping the current tenant costs a quarter of finding a new one.
Two paths for this space at renewal. The numbers below use current Calgary market data and standard leasing economics. Both scenarios assume Option 1 of the June 3, 2026 renewal letter - three years at $7.00, $8.00, and $9.00 per square foot - is accepted in full, with the term starting September 1, 2026.
Roughly one in five square feet of Calgary office space sits empty. Leasing momentum is real, but it is concentrated in newer Class A buildings and tenants under 10,000 sq. ft. - not older suburban blocks of this size.
Downtown CalgaryCBRE, Q2 2026
30.3%
Suburban CalgaryCBRE, Q2 2026
23.7%
Calgary city-wideAVISON YOUNG, Q1 2026
22.8%
Suburban CalgaryAVISON YOUNG, Q1 2026
16.2%
% VACANT · SCALE 0-35% · SOURCES LINKED BELOW
What an empty space actually costs, month by month.
Current all-in rent on this space is $14,000 per month. Every month it sits vacant, that revenue is gone - while operating costs on the empty space continue out of pocket. Nine to twelve months of downtime is a realistic marketing window for a 9,000 sq. ft. block of older suburban inventory, before accounting for the building's planned redevelopment, which any prospective tenant's broker will surface immediately.
CUMULATIVE LOST RENT WHILE VACANT
$0
MONTH
0
036912 MO
Lost rent alone. Excludes unrecovered operating costs on vacant space, marketing, legal, and the inducement package a replacement tenant will require.
The two scenarios, side by side.
Scenario figures use midpoints of conservative ranges. A replacement tenant receives the same free rent and generates the same commissions - paid to a stranger and their broker, after the downtime.
RE-LEASE TO A NEW TENANT
~$0
Downtime · 9-12 mo lost rent
$126,000 - $168,000
Free rent
$30,000 - $45,000
Commissions
$20,000 - $40,000
Mktg + legal
~$10,000
RETAIN CURRENT TENANT
~$0
3 months gross rent free
~$42,000
Inducement credit
$20,000
Retention advantage - before counting the risk that the space sits longer than 12 months, or that a replacement tenant demands a redevelopment discount.
~$0
The proposal.
T-01
Three-year term at the letter's Option 1 rates
Option 1 from the June 3 renewal letter - $7.00, $8.00, $9.00 per square foot - accepted in full. The higher rent begins September 1, 2026, with no downtime, no marketing period, and no re-leasing risk.
T-02
Three months gross rent free
Base rent and operating costs, at the start of the term - the same fixturing and inducement period any new tenant signing at these rates would receive in this market.
T-03
One-time inducement credit of $20,000
Equivalent to the fee paid to the outside broker who would represent a replacement tenant - a cost incurred in any re-lease, applied here as a credit to the tenant who removes the vacancy risk entirely.
T-04
A tenant already aligned with the building's future
Two-year payment history, no issues with the long-term redevelopment plan, and no demolition-clause negotiation. A condition the open market will not replicate.