Canadian Office Space Market
Steve Ladurantaye
Globe and Mail Update Published Monday, Jun. 27, 2011 9:20AM EDT Last updated Monday, Jun. 27, 2011 9:24AM EDT Canada’s office space vacancy improved in the second quarter, led by a record-setting recovery in Calgary. CB Richard Ellis said the 8.6 per cent vacancy rate improved from 9.3 per cent in the last quarter, and was at 10.1 per cent a year ago. Tenants leased 3-million square feet of space, compared to 1.2-million square feet a year ago. The report doesn’t track rents. “As a whole, the national trend for the office market is improving fundamentals, however, the performance of Calgary’s office market is absolutely staggering,” CBRE said in a statement. “Since peaking in the second quarter of 2010, Calgary’s vacancy rate has recovered at its fastest pace ever, down 630 basis points year-over-year to 9.4 per cent.” http://www.theglobeandmail.com/repor...rticle2076801/ |
Once The Bow comes online, those Calgary numbers will equalize. As the building is not yet in the office space count, there is a huge adjustment coming when it does get occupied, and office space shifts from older towers in the core to The Bow.
These towers will then have to seek tenants in older and less desirable properties. Tough Sell. |
I live in Regina
Our Class A office space is at like 0.5% |
The vacancy rate in St. John's for Class A office space was at 0% a few months back, with the vacancy rate for all other office space very low. I'm not sure if this has improved either bit.
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both bad situations... healthy markets are 5-7% vacant IMO
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I don't see it as possible, that The Bow could fill up with all the vacated tenants for other towers, an not one single new tower would have been in the pipes, otherwise, as a business, I would prefer new space, to beat up old office space built in the 1980's if that option was available. I don't see this materializing, there will be loads of new office space on the Calgary market once the Bow opens its doors. And it will take a long time to retrofit and upgrade existing buildings before any new tenants move in. Comon, MBA, you know the value of premium office space, and the returns on the bottom line and branding visa via setting up shop in outdated accommodations. |
I'm actually looking at a leasing report on the calgary market as we speak... I don't know what to tell you, the market is tight. Like I said, I know of at least one major office project that could move forward in the very near future.
I was as surprised as you are when I first read the report, but that is what the analyists are saying. |
Once the bow opens, I don't think that vacancy rates will go too high, maybe 12%?
It's crazy to think that there are a couple new office proposals out there and a couple DPs submitted. This city is absolutely in a league of it's own! |
Indeed it is... i am hearing multiple things going on behind the scenes.
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I think it's very likely that the second phase of Eighth Avenue Place (~700,000 sq ft) goes ahead by next year. The developer has pretty much said as much. EAP 1 went from 0% leased when it broke ground to 95% leased now - and that is 1 million square feet of space.
I could see a few other smaller ones breaking ground within 18-24 months as well, such as the one just west of the Nexen building, the "Centennial 3" building, Bow South Block and maybe City Centre. Oil is booming, if natural gas prices increase a bit, that will accelerate things a lot more. |
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Who would of thunk it? Toronto should have three 30 plus storey towers under construction by year's end. Who knows what else will join them too. The poor surface parking/vacant lots are being attacked from all sides.
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Any Honours MBA's wanna take a whack at that one? I'd be tempted to say once the old unrefurbished space comes online it will be instantly absorbed. |
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I'm thinking those office towers will need some serious retrofitting once their current tenants vacate, which will pull that space off the market anyway.
Just because I run or manage a start up doesn't mean I'll rent any old beatup space. |
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but we have the jets. |
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