For the second consecutive quarter and the fourth time since the first quarter of 2015, the downtown Calgary office market experienced positive absorption, equal to 113,962 square feet in the second quarter of this year, says commercial real estate firm Colliers International.
“This also marks the second time since 2012 that Colliers has recorded two consecutive quarters of positive absorption. Overall vacancy of the downtown market fell to 26.8 per cent due to the positive absorption recorded,” said the company. It said the vacancy rate was 27.2 per cent a year ago.
“Although vacancy has been decreasing, Calgary still has almost 12 million square feet of space vacant and available in the downtown market with another 5.7 million square feet available in the Beltline and suburban markets. Landlords will have to continue to compete, as the market is highly tenant favoured.”
Calgary’s downtown office market was particularly hard hit when oil prices collapsed in the second half of 2014. That led to years of recession in 2015 and 2016 as the corporate sector shed thousands of jobs. With fewer employees, company’s naturally cut back on their space requirements, leaving the city’s downtown core the most vacant it has ever been and a clear indication of how the oilpatch’s health impacts the office market.
Colliers said the Edmonton office market reported positive absorption for the third quarter in a row since the fourth quarter of 2017.
“However, with the introduction of Stantec Tower, the vacancy rate for the city actually increased from 15.6 per cent to 17.2 per cent overall since Q1 2018. The Financial Class AA inventory was increased by 643,527 square feet with the completion of this tower, and although there was positive absorption for the district equal to 470,985 square feet, the vacancy rate still increased to 17.8 per cent from 17.0 per cent. The two large transactions that drove this positive absorption are Stantec Consulting and PriceWaterhouseCoopers, who are both taking brand new space in Stantec Tower,” added Colliers.
Respected business writer Mario Toneguzzi is a veteran Calgary-based journalist who worked for 35 years for the Calgary Herald in various capacities, including 12 years as a senior business writer.