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Richard Pootmans
Business Development Manager
Real Estate
Toll-free: 1.888.222.5855
Local: 403.221.7899
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Office Real Estate Markets
Relocate And Expand |
Office Real Estate Markets
The pace of activity in the downtown office market did not abate in Q3, resulting in the ninth consecutive quarter of increasing occupancy. Vacancy has declined to 3.8%. As the supply of "A" class space diminishes, many firms are selecting "B" quality space, as there are few other alternatives to remaining in the downtown core.
The majority of demand in the downtown office market is derived from energy related companies, and those that provide business and financial services to them, such as legal, financial, accounting and consulting services. Several high profile projects are underway to bring new supply on stream, such as Livingstone Place, Centrium Place, the Canada Post site and Opus 8. Two additional heritage redevelopment projects will provide character space for the Calgary downtown office market: the Lougheed Block (6th Avenue and 1st Street); and the old Telus/AGT Telephone Building (6th Avenue between Centre and 1st Streets). Finally, EnCana's proposed 2 million sf mega-project will add a new dimension to the downtown office market east of Centre Street.
Activity in the Calgary suburban office market continues to be strong, posting the seventh straight quarter of declining vacancy. Headlease vacancy declines were primarily a result of expansions by the Calgary Health Region (CHR) and Alberta Treasury Branches. Much of the suburban activity is still being driven by health care professionals and energy sector consulting firms, however there is a segment of the suburban demand which has emerged seeking options from an increasingly expensive and limited downtown market.
A number of suburban projects are expected over the next year: Sunridge Mall Medical Gallery (2005); Highfield Phase II (2005); Westmount Corporate Campus Phase I (2006); Citadel West Building (2006); and, Crowfoot II (2006).
| Table 4: Office Market |
Downtown |
Suburban |
| Vacancy Rate |
3.80% |
9.80% |
| Average Net Rent (per sf)* |
$26.85 |
$13.15 |
| YTD Net Absorption (sf) |
1,441,264 |
349,466 |
Source: CB Richard Ellis
Source: City of Calgary Economic Development, Quarterly Economic Report
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