Office Space in Downtown Calgary is Tight, and Increasingly Expensive

Posted by Alan Zunec on Thursday, February 16th, 2012 at 7:17pm.

Looking for prime downtown office space in Calgary? If you can find what you are looking for, prepare to spend some big bucks on that space. Barclay Street Real Estate put out a report noting that more and more potential tenants are looking beyond that downtown core. They are targeting both the Beltline and neighboring suburban areas.

These two leasing options do have their advantages. Lower rental prices for one. Easier and more parking for another. Traffic is also not as congested in the outlying areas. Those owning property in the Beltline and emerging suburban markets are starting to spruce up those holdings. If that property is open land, there may very well be a new development underway before you know it.

Barclay’s report noted that in 2010 the vacancy rate in Calgary’s downtown core was 11.2 percent. Fast forward to 2011; by the end of that year the vacancy rate dropped to four percent. To many in the business, that is essentially full occupancy. If you are looking at top of the line class AA office space, that vacancy rate goes down to one percent, a mere fraction of the 14.3 percent seen in 2010.

Based on the historical average of 486,000 square feet of downtown absorption, which is the amount of space that changes annually, 2011 was way ahead of the game. The downtown absorption rate came in on the positive side, at 2.6 million square feet.

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