Calgary may avoid real estate disaster, as strong crude prices and growing attention to the oil sands drives more interest in commercial space than brokers expected a month ago.
Several city brokerage firms feared vacany rates would reach 20 per cent as early as this spring, but Calgary’s vacancy rates actually fell during the first half of this year.
“I wouldn’t paint a picture that it’s booming, but it’s nowhere near as negative as it was,” said Todd Throndson, managing director of Avison Young Commercial Real Estate’s Calgary office, to The Globe and Mail. “We’re thinking today that vacancy might get to around 15 per cent – but it’s not going to be the death knell that everybody thought it was going to be.”
Calgary vacancy rates hit 14.5 per cent late last year and fell to 12.4 per cent by the end of May, according to numbers from Barclay Street Real Estate. This is partly due to energy companies, such as Statoil ASA, and engineering firms, such as Amec PLC, needing more space as oil sands expansion renews.
Vacancy rates are expected to rise again over the next 18 months with the opening of two major new buildings, the million-square-foot Eighth Avenue Place, and the Bow, the new 1.8-million square-foot home to Encana Corp. and Cenovus Energy Inc.
