Calgary's emerging office condo market remains hot this year, according to Barclay Street Real Estate.
Near-empty skyscrapers and rising vacancy rates are pressuring landlords to offer big incentives – such as a year of free rent or money for renovations – to keep a shrinking number of tenants in their downtown Calgary towers.
New retail development in the Calgary region continues at a steady pace despite the depressed economy and sliding consumer spending, according to local officials.
The retail vacancy in the core business districts of Calgary can largely be attributed to increased office vacancy rates as well as a general slowdown in our oil-based economy here,” said Nathaniel Sterzik, leasing and sales associate for Barclay Street Real Estate, which just released its mid-year retail market analysis for the city.
Storefronts in downtown Calgary are closing at a significantly faster rate than similar retail spaces in the suburbs in yet another sign of oil price collapse’s wide-ranging effects.
Total commercial real estate investments in the city plunged $1.1 billion from 2014 to 2015, ac-cording to research by Barclay Street Real Estate, which tallied total dollar volume last year at $1.5 billion.
A new report says Calgary’s downtown offices got a bit emptier in the first three months of the year as vacancies rose 2.2 percentage points from last quarter. The Barclay Street Real Estate Ltd. report says vacancies rose to 19.5 per cent as about 938,000 more square feet were on the market. It said by 2018 the vacancy rate could be close to 24 per cent.
MEG Energy Corp. needs less than half the office space it is on the hook for in downtown Calgary after it paused its ambitious growth plan last year.
A new report by Barclay Street Real Estate Ltd. says vacancy in the retail market has risen from 2.7 per cent at the end of 2015 to three per cent in the first quarter of 2016. It says 1.2 million square feet of space is now available, up 116,000 square feet since the fourth quarter of 2015.
The depressed state of the Calgary office market evokes memories of the city’s situation seven years ago. What’s still unknown is if it will recover as quickly this time around. “What is very similar in comparing January 2009 to January 2016 is the amount of inventory in the office market that was under construction,” said Dan Harmsen, vice-president and associate broker for Barclay Street Real Estate, which recently released reports on Calgary’s downtown, Beltline and suburban office markets for the final quarter of 2015.