Commercial Real Estate Specialist. Leasing office & industrial space in Calgary and Edmonton, our primary focus, acting for tenants and buyers, and for sellers of land + market updates.
September 20, 2011 - vacancy rates, particularly in the downtown core, are - according to media reports - slipping to 6-7% levels which might suggest a go-forward for developers on a new building. Considering the Bow project is a year away from occupancy, one has to wonder if there is sufficient velocity in the market to absorb the new supply plus another building. While some speculate the 8th Avenue Place project's 2nd tower will go ahead soon, I expect some foot dragging as the economy of the whole world outside Calgary will come into play . . . or not . . . for developers. Meanwhile, for my clients, I am finding no difficulty securing a range of options both in the core/beltline and suburban locations. As always, the NW is tight because there are so few office buildings - but still, there are options. The NE has lots of options and modulated pricing. The suburban south is abundant with options too - so, I look forward to a busy fall/winter as the market is quiet active at present - mostly with relocations and expansions as opposed to any flood of new companies to this market. August 30, 2011 - vacancy rates are holding steady. While options for large users are holding firm - the most significant activity of late is the increase in availability of small suites. Downtown and Beltline buildings are showing a healthy inventory of availability and NE and SE remain sectors with the most availability. The NW is tight, as always, because of fewer office buildings in that quadrant, yet I haven't had a problem finding ample options for clients to choose from. The elephant in the room, for this market and all others in North America is the health of the globla economy. Things are looking bullish here due to strong oilsands, shale gas and pipeline projects - but, as we've learned many times before, that can change very quickly if there is an abundance of bad news . . . . . For now, most of the clients I am working with are busy, and that makes me busy, so I have no complaints heading into fall. August 15, 2011 - vacancy rates are falling, particularly in large space options (full and multiple floors in downtown buildings), however rental rates have not moved substantively - and aren't likely to as an 8.0% vacancy rate is still well above normal levels and do not take into account new supply coming on stream - most notably, The Bow.
July 23, 2011 - leasing activitty, having slowed due to summer-time lull (Stampede and vacations), has picked up again. This bodes well for Tenants as supply remains quite good.
Availability of small suites (under 2,000 sq. ft.) is spotty, yet the range of options available to Tenants remains at a healthy level. For larger suite size requirements, availability of both head-lease and sub-lease opportunities is more abundant. These conditions bode well for Tenants' ability to negotiate from a good position. Landlord's realize maintenance of their rental rate expectations fmust be tempered in view of substantial supply of new buildings altering the market. Free rent periods, inducements (renovations etc.) and stepped rents are typical most transactions under 5,000 sq. ft.
In the case of large transactions, depending on the attractiveness and strength of Tenant, Landlords are prepared, as they almost always are, to do whatever they can to bring a deal together. The competitive posture of landlords for multi-floor users, particularly in the oil & gas sector where the likely need for more space in the future often grows by leaps and bounds, remains keen. Some Landlords have the enviable situation of being fully leased to long term tenants, but the more frequent situation is where those buildings will have several pockets of space on the market for sub-lease by Tenants who are moving to larger or smaller digs somewhere else. Every large user and every Landlord is anxious about where the market is going. Worldwide economic uncertainty, languishing natural gas prices and - the elephant in the room in Calgary - the Bow. The Bow will be occupied by Encana and Cenovus in 2012/13 as 2,000,000 sq. ft. of new downtown space comes on stream. The musical chairs of relocating, upsizing, downsizing etc. will leave the market with new holes to fill with Landlords nervous about the post-Bow occupancy vacancy rates. Stay tuned . . .
With regard to renewals - either on-time, or early, Landlords tend to be highly negotiable as the prospect of losing a Tenant is neither a desired situation, or a trend they wish to create in any building.
Mark Kolke
MaxComm Realty Advisors - Mark Kolke
Calgary's downtown office leasing market is comprised of two primary areas: - Central Business District (CBD) or 'the core' - Beltline/Mission
Central Business District - quick facts: - home to most major oil & gas, financial service firms, law firms and accounting firms - +15 pedway system connects many buildings; all new buildings are required to connect to the system with bridges or provision for bridges to be built - high-rise buildings - storefront retail, restaurants - indoor shopping - served by transit bus routes and light rail transit (C-train) - volume: 40,000,000+ sq. ft. approx. of leasable area + more than 2 million under construction
Beltine / Mission District - quick facts: - low rise and mid-rise buildings - adjacent (to the south) of the Central Business District, separated by railway tracks (CPR main line) home to most major oil & gas, financial service firms, law firms and accounting firms - minimal storefront retail, ample restaurants - served by transit bus routes - volume: 8,000,000 sq. ft. approx. of leasable area
. . . . to search for space, click on the RED sub-market links below:
Mark Kolke MaxComm Realty Advisors / MaxWell South Star Realty 888 - 3rd Street SW, Suite 1000, Calgary, Alberta - T2P 5C5 Phone: 403-444-6939 e-mail: kolke@markkolke.com
