Real estate officials expect conditions to support turnaround in downtrodden commercial market
Turning the corner in the downtown Calgary office market? A growing sense of optimism that the worst of the economic downturn had past set in during the fourth quarter of 2016 as there was a number of large, full-floor lease and sublease activity near the end of the year in the Calgary downtown office market, according to a report by Barclay Street Real Estate.
To the end of September 2016, a total of $1.3 billion had been transacted in Calgary commercial real estate, nearly eclipsing the $1.5 billion invested in all of 2015, according to Barclay Street Real Estate.
Investor sentiment about the Calgary market showed signs of renewed confidence into the third quarter of this year, says a new commercial real estate investment report by Barclay Street Real Estate. The Q3 report says total dollar volume invested reached $1.3 billion in the first nine months - just shy of the $1.5 billion transacted for all of 2015.
In a report, Barclay Street Real Estate noted that the overall office vacancy rate in the Calgary suburbs is 22.3 per cent, up 1.1 per cent from the second quarter of this year, but the Class A vacancy is 23.5 per cent. The agency suggests that landlords may soon face some tough decisions.
Commercial landlords thinking outside of the box in wake of high vacancy rates
A developer with a 50 per cent stake in a proposed residential tower project that would occupy a full city block downtown says he remains bullish about the Beltline’s real-estate market, despite Alberta’s recession.
An office report from Barclay Street Real Estate pegs the city’s current downtown vacancy rate at 22.1 per cent, but notes that skyscrapers still under construction could push the rate to 25.6 per cent next year and 26.4 per cent in 2018.
Suburban office vacancies encouraging landlords to be flexible.
"We're in the doldrums right now," said Ian Robertson, associate specializing in the suburban office market for Barclay Street Real Estate. "There's too much space chasing too few tenants. So it's a bit of a malaise".
Barlcay Street Real Estate recently forecast that new developments could push downtown office vacancy rates up to 24 per cent in 2018, and office vacancy rates in the adjacent Beltline neighbourhood could climb to 19.6 per cent over the same period. The vacancy issue has driven down prices for tenants — “There’s never been a better time to look at space than right now,” Barclay Street associate Bill Falagaris said — but has forced developers to reconsider projects that are planned, and completion dates for office buildings that are already under construction.