Shane Olin is broker of Blackstone Commercial.
What is Blackstone Commercial and what does it do?
Olin: Blackstone Commercial is a commercial real estate brokerage and property management company. It manages one million square feet of commercial buildings and has offices in Saskatoon, Kelowna, Red Deer and Calgary. It has approximately 25 employees/associates in the three provinces and has been in business since 2005.
What has the office market been like for you in recent years and what do you expect for this year?
Olin: In Calgary, most of the buildings we manage are not office buildings and so our portfolio of managed buildings are performing reasonably well, albeit not as well as pre-2015.
The suburban office buildings that we do manage in Calgary are approximately 20 per cent vacant and property taxes have gone up by 20 per cent per annum for the last four years. The office market in general is the worst office market that this city has seen ever in history.
Property taxes and a lack of parking are the biggest challenges facing office landlords in Calgary. City council’s response is to take away parking in favour of bike lanes and drive up property taxes, in many cases over 100 per cent in four years because of out-of-control, ego-driven spending. Office vacancy rates are close to 30 per cent on close to 60 million square feet.
What about the retail real estate market?
Olin: The retail real estate market has started to show considerably more weakness than it has shown throughout this downturn. With increased pressure on retailers by online shopping and a continued weakened local economy, the vacancy rates in retail are starting to creep up. There are still vacant premises from the Sobeys/Safeway merger, Sears locations, Target and closures continue to mount.
City of Calgary council response was to raise property taxes on top of crippling legislation to restaurants, causing the closure of approximately 85 restaurants in Calgary in 2018.
We manage a building in Kensington that houses a gummy confection retailer that has a 1,200-square-foot store and their property taxes alone are $1,500 per month.
This is a challenging market that’s being decimated with unfair property taxes due to out of control spending at the civic level.
What about the industrial real estate market?
Olin: The industrial real estate market in Calgary is not under the same pressures as the other two although vacancy rates are still double what they used to be.
What are your plans for the company’s future growth?
Olin: Expansion outside of Alberta. Trying to get governments and people to change inside Alberta is like banging your head against the wall. It’s easier to go elsewhere and much more business friendly, pretty much anywhere else.
– Mario Toneguzzi for Calgary’s Business