Calgary's industrial vacancy declines

Demand continues to surge

By Mario Toneguzzi, Calgary Herald October 4, 2010 7:27 AM

Managing Director Joe Binfet of Colliers International.

CALGARY - Calgary's industrial real estate market continues to show impressive signs of strength with a third consecutive quarter of declining vacancy rates.

Commercial real estate firm Colliers International in Calgary says the vacancy rate for the industrial real estate market has dropped to 4.82 per cent in the third quarter of this year. The decline is due primarily to the activity in the large bay - 50,000 square feet plus - market.

In the second quarter the vacancy rate was 5.36 per cent. It was 5.89 per cent in the first quarter of this year.  "We are seeing upward pressure on rental rates as fewer options are available to tenants and landlords are seeing more demand for space," said Joe Binfet, managing director of Colliers International in Calgary.
"There is an unusually high volume of pending deals in the large bay market. As a result vacancy will continue to decline. We expect to see four per cent vacancy as early as the first quarter of 2011."

Binfet said distribution and transportation companies are ramping up and putting products in place.

"This bodes well for the retail sector," he said. "(It's a) good time for the development community to step up and build as demand continues to surge."

mtoneguzzi@calgaryherald.com

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Downtown Calgary vacancy rate highest in Canada at 14.5%

 Leasing activity remains strong

By Mario Toneguzzi, Calgary Herald September 27, 2010

 

Eigth Avenue East Tower reaches its final height in Calgary, Alberta on September 22, 2010.

Photograph by: Leah Hennel, Calgary Herald

Calgary's downtown vacancy rate has climbed to the highest level in the country among major markets but the commercial real estate sector also experienced significant activity in the third quarter "with a frenetic pace of leasing."
A report by CB Richard Ellis Ltd., said the downtown vacancy rate in the city jumped to 14.5 per cent from 12.5 per cent a year ago.
Nationally, the average downtown vacancy rate in the third quarter of this year was 8.4 per cent, up from 7.8 per cent for the same period in 2009.
"Over the last three months, Calgary's downtown office market was the busiest it has ever been," said Greg Kwong, executive vice-president, regional managing director, CB Richard Ellis Limited, Alberta. "It's important to note that the office vacancy figure is slightly misleading; the addition of Eighth Avenue Place this quarter increased the vacancy figure quite dramatically. If leasing activity continued at this pace, in the absence of new supply, Calgary would have been poised to post a single-digit downtown office vacancy rate early next year."
CBRE said improvement in the Canadian economy during the first half of 2010 fuelled a similar recovery pattern in the country's commercial real estate market, with sales and leasing activity picking up steam through the third quarter. The combination of limited new construction, available mortgage funds and low interest rates created near-perfect conditions for the commercial real estate investor to re-enter Canada's market, bolstering both the office and industrial sectors, according to the National Office and Industrial Trends Third Quarter Report.
"There have been no surprises this quarter," said John O'Bryan, vice-chairman, CB Richard Ellis Limited. "The recovery and rebound of the commercial real estate market in the third quarter is tracking as expected, and we anticipate that commercial real estate activity will continue to improve through to year-end, albeit, at a slower pace.
"Pent-up demand due to the uncertainty of the market from the start of the year is now starting to make its way through the system, with available space being absorbed at appropriate rates."
mtoneguzzi@calgaryherald.com

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