The latest news in Calgary’s office vacancy…….
Calgary has lowest downtown office vacancy in Canada
Mario Toneguzzi , Calgary Herald
Published: Wednesday, February 13, 2008
CALGARY - Calgary leads the country with the lowest downtown office vacancy rate at 3.2 per cent despite a steady climb in that number over the past year.
A downtown office report by Barclay Street Real Estate Ltd., says the vacancy rate is expected to moderately rise in 2008 to the 4.5 per cent to 4.8 per cent level as sublease space continues to rise. The report by the company's research analyst Michelle Pink says at the end of the fourth quarter of 2007 there was just over one million square feet of space available of which 353,314 or 33 per cent was being marketed as sublease space.
The downtown office vacancy rate has increased throughout the year, said Tanya Colasurdo, associate broker and principal with Barclay Street. The record low of 0.4 per cent was registered about a year and a half ago.
"We've steadily been climbing and we've also added on additional inventory which plays a part of that. At 3.2 per cent vacancy now we're continuing to see a trend towards more space coming on the market right now."
The report said development continues to be very active in the downtown market with more than one million square feet of new office space ready for occupancy in 2008 with the completion of three office projects - Bankers Court, Livingston Place Phase II and 8 West. By 2010, there will be an additional 5.8 million square feet of office space added to the inventory, bringing the total in the downtown core to 40.2 million square feet of leasable office space.
The report said the average net rent lease rate for all building class levels was $36 per square foot. Premier Class AA space was averaging $42 to $55 while new development had rental rates ranging between $32 to $45.
Colasurdo said the expectation of a larger jump in the vacancy rate will come about 2010 with a projected vacancy rate of between 10 to 12 per cent then because of all the new development.
Barclay Street also said investment sales in 2007 totalled $3.2 billion in office/retail/industrial commercial real estate, across the city, with an increase of 42 per cent from 2006 in these sectors. In an investment review report, the company said institutional investors are still actively seeking to place funds in Alberta and many entrepreneurial investors are sitting on capital waiting for the right deal. The bulk of the investment sales in 2007 was in the office category, representing $2.1 billion. The downtown office market saw the largest increase in dollar volume from $636.6 million in 2006 to $1.6 billion in 2007. There were 17 downtown transactions last year.
