T he Calgary office market continues its recovery from 2010 with a strong first quarter. This is due in large part to strong energy prices with a rebounding economy also contributing. The overall vacancy rate in the city has declined from 10.6% in Q4 2010 to 9.8% in Q1 2011. According to a report published by RBC Economics, real GDP growth is estimated to be 4.3% in 2011 for Alberta, the best since 2006. The report also forecasts nearly 50,000 net new jobs to be created for the province in 2011, the highest since 2007. With unrest in the Middle East, crude oil prices have spiked dramatically in recent months. Particularly concerning is the possibility of instability spreading to oil rich countries such as Iran and Saudi Arabia. Combined with the growing energy needs of emerging economies such as China, the abundance of untapped oil supply in Alberta appears increasingly attractive to global oil companies. This has been reflected in positive absorption of downtown office space of 375,000 square feet through the first quarter of 2011. The vacancy rate including sublet space for both class AA/A office space in the downtown core has decreased from respectively 8.2% and 8.0% for Q4 2010, to 5.9 % and 7.5%. Dominated primarily by oil and gas energy companies, improved economic conditions and a very positive outlook on energy pricing, tenants have strong confidence to expand and take on additional space. Driven by demand, The Calgary Market In Review Cautious Optimism for 2011 Tenant Area Leased (SF) Building Vacancy Type Lease Type Schlumberger Canada* 154,000 Palliser One Headlease New Suncor Energy 120,000 Suncor Energy Centre - East Headlease Expansion Bell Canada* 82,000 Palliser South Headlease New Shaw Communications 82,000 Scotia Centre Headlease New Meyers Norris Penney* 70,000 640 - 5th Avenue SW Headlease New Canadian Forest Oil Ltd.* 43,000 640 - 5th Avenue SW Headlease New Downtown Calgary Notable Lease Deals - First Quarter 2011 * Indicates transactions Avison Young was involved with Suburban Market: Flight to quality Calgary Market Overview Calgary Construction: Back on track A Greener Outlook: Is Calgary onside? The Office Report 2011 Q1 average asking rates have increased in the downtown core. While both class AA and newly constructed space held steady at $34 per square foot and $40 per square foot respectively, rates increased slightly across the board for class A, B and C space. The flight to quality trend is likely to continue as tenants move to better quality properties. A trickle-down effect continues throughout various districts in the city with companies taking advantage of affordable quality space becoming available due to the additional inventory added in 2010. With continued addition to the office inventory throughout the latter half of 2011 and early 2012, there will be modest upward pressure on vacancy. Vacancy in the downtown core will likely peak upon completion of The Bow. Consistent with the downtown core, tenant demand for beltline space also increased in the first quarter of 2011. Overall vacancy rate in the beltline decreased from 8.2% in Q4 2010 to 7.5% in Q1 2011, with positive absorption of 41,000 square feet.
Avison Young Calgary Office Report (Q1 2011)
Mar 01, 2016
Avison Young Calgary Office Report (Q1 2011)
Welcome message from author
This document is posted to help you gain knowledge. Please leave a comment to let me know what you think about it! Share it to your friends and learn new things together.
Transcript
The Calgary office market continues its recovery from 2010 with a strong first quarter. This is due in
large part to strong energy prices with a rebounding economy also contributing. The overall vacancy rate in the city has declined from 10.6% in Q4 2010 to 9.8% in Q1 2011. According to a report published by RBC Economics, real GDP growth is estimated to be 4.3% in 2011 for Alberta, the best since 2006. The report also forecasts nearly 50,000 net new jobs to be created for the province in 2011, the highest since 2007.
With unrest in the Middle East, crude oil prices have spiked dramatically in recent months. Particularly concerning is the possibility of instability spreading to oil rich countries such as Iran and Saudi Arabia. Combined with the growing energy needs of emerging economies such as China, the abundance of untapped oil supply in Alberta appears increasingly attractive to global oil companies. This has been reflected in positive absorption of downtown office space of 375,000 square feet through the first quarter of 2011. The vacancy rate including sublet space for both class AA/A office space in the downtown core has decreased from respectively 8.2% and 8.0% for Q4 2010, to 5.9 % and 7.5%. Dominated primarily by oil and gas energy companies, improved economic conditions and a very positive outlook on energy pricing, tenants have strong confidence to expand and take on additional space. Driven by demand,
The Calgary Market In ReviewCautious Optimism for 2011
Tenant Area Leased (SF) Building Vacancy Type Lease TypeSchlumberger Canada* 154,000 Palliser One Headlease New
Suncor Energy 120,000 Suncor Energy Centre - East Headlease ExpansionBell Canada* 82,000 Palliser South Headlease New
Shaw Communications 82,000 Scotia Centre Headlease NewMeyers Norris Penney* 70,000 640 - 5th Avenue SW Headlease New
Canadian Forest Oil Ltd.* 43,000 640 - 5th Avenue SW Headlease New
Tenant Area Leased (SF) Building Vacancy Type Lease Type
Stuart Olson Dominion Construction 54,000 Westmount Corporate Campus - Building 4 Headlease New
Critical Mass 50,000 Atlantic Avenue Art Block Headlease New
Cimarron Engineering* 47,000 Parkside at Quarry Park Headlease New
Flint Energy Services 47,000 Airstate Centre Headlease New
Kasian Architecture* 27,500 Atlantic Avenue Art Block Headlease New
Global Raymac Surveys 23,000 Centron Park - Building 300 Headlease New
Vista Projects 22,000 Centron Park - Building 300 Headlease New
Suburban Calgary Notable Lease Deals - First Quarter 2011
* Indicates transactions Avison Young was involved with
Downtown Calgary Notable Lease Deals - First Quarter 2011
* Indicates transactions Avison Young was involved with
Suburban Market: Flight to qualityCalgary Market Overview Calgary Construction: Back on track A Greener Outlook: Is Calgary onside?
The Office Report 2011Q1average asking rates have increased in the downtown core. While both class AA and newly constructed space held steady at $34 per square foot and $40 per square foot respectively, rates increased slightly across the board for class A, B and C space.
The flight to quality trend is likely to continue as tenants move to better quality properties. A trickle-down effect continues throughout various districts in the city with companies taking advantage of affordable quality space becoming available due to the additional inventory added in 2010. With continued addition to the office inventory throughout the latter half of 2011 and early 2012, there will be modest upward pressure on vacancy. Vacancy in the downtown core will likely peak upon completion of The Bow. Consistent with the downtown core, tenant demand for beltline space also increased in the first quarter of 2011. Overall vacancy rate in the beltline decreased from 8.2% in Q4 2010 to 7.5% in Q1 2011, with positive absorption of 41,000 square feet.
Suburban Office MarketHigher demand for qualityspace
Momentum for Calgary’s suburban office market was quite different between the
north and the south. Overall vacancy rate for the suburban north increased from 10.3% in Q4 2010 to 11.7% in 2011. Sublet vacancy increased from 1.8% in Q4 2010 to 2.4% in Q1 2011 for the suburban north. Leasing transactions were predominantly for smaller pockets of space, with negative absorption of 119,000 square feet. Consistent with historical trends, the northeast quadrant lags behind the overall market in the recovery.
Meanwhile, the overall vacancy rate for the suburban south dropped from 13.1% in Q4 2010 to 10.8% in 2011, while vacancy rates for class A buildings have decreased from 12.9% in Q4 2010 to 9.5% for Q1 2011. Indicative of the decrease in vacancy, the suburban south had positive absorption of 200,000 square feet. As extension
of the strong demand by oil and gas companies in the downtown core, engineering firms have in turn taken the lead in suburban areas.
In the first three months of 2011, tenants demonstrated a strong demand for larger pockets of higher quality office space. A number of newer buildings completed in the past few years have experienced significant leasing activity. Building 300 of Centron Park, Airstate Centre, and Douglasdale Executive Centre all obtained significant lease commitments in the first quarter of 2011. Deals for new construction also occured during the first quarter with Remington’s Parkside at Quarry Park and GWL Realty Advisors’ building 4 of the Westmount Corporate Centre getting lead tenants. With significant uptake of available space, average asking rates held steady, and in some cases edged upwards for higher quality spaces.
AVISON YOUNG The Office Report - Q1 2011
© 2011, Avison Young Real Estate Alberta Inc. The information contained herein was obtained from sources deemed reliable and, while believed to be correct; is not guaranteed by Avison Young.
Tenant Area Leased (SF) Building Vacancy Type Lease TypeSchlumberger Canada* 154,000 Palliser One Headlease New
Suncor Energy 120,000 Suncor Energy Centre - East Headlease ExpansionBell Canada* 82,000 Palliser South Headlease New
Shaw Communications 82,000 Scotia Centre Headlease NewMeyers Norris Penney* 70,000 640 - 5th Avenue SW Headlease New
Canadian Forest Oil Ltd.* 43,000 640 - 5th Avenue SW Headlease New
Tenant Area Leased (SF) Building Vacancy Type Lease Type
Stuart Olson Dominion Construction 54,000 Westmount Corporate Campus - Building 4 Headlease New
Critical Mass 50,000 Atlantic Avenue Art Block Headlease New
Cimarron Engineering* 47,000 Parkside at Quarry Park Headlease New
Flint Energy Services 47,000 Airstate Centre Headlease New
Kasian Architecture* 27,500 Atlantic Avenue Art Block Headlease New
Global Raymac Surveys 23,000 Centron Park - Building 300 Headlease New
Vista Projects 22,000 Centron Park - Building 300 Headlease New
Suburban Calgary Notable Lease Deals - First Quarter 2011
* Indicates transactions Avison Young was involved with
Downtown Calgary Notable Lease Deals - First Quarter 2011
* Indicates transactions Avison Young was involved with
Parkside at Quarry Park
Construction InThe CityRenewed Confidence
The recently completed Eighth Avenue Place east tower added 1 million square feet of office
space to the downtown core, with approximately 90% of the space leased. The north block of the The Bow is slated for completion this year, adding approximately 1.8 million square feet to the Calgary downtown office inventory. Fully leased by energy firms EnCana and Cenovus, phased relocation is anticipated to occur throughout 2012.
A number of other office developments are currently under construction. In the beltline area, Hanson Square is underway with over 40,000 square feet epected for Q2 2012. The WinSport Canada athletic and office complex will add to the Northwest market 100,000 square feet of office space in Q3 2011. Construction is also moving ahead for building 4 of the Westmount Corporate
Campus in the SW, consisting of approximately 150,000 square feet expected for Q4 2012. While in the Southeast, Remington Development’s master planned mixed use subdivision Quarry Park continues to be the biggest story in the suburban market. Two office buildings in the development consisting of over 270,000 square feet, Quarry Central and Parkside at Quarry Park, are slated for occupancy by September
AVISON YOUNG The Office Report - Q1 2011
AVISON YOUNG FEATURED OFFICE LISTINGS For full brochures, please visit us at: www.avisonyoung.com
2012. As a sign of renewed confidence in the market, developers are once again evaluating developments that were put on the shelf through the recession. Developers are encouraged by positive economic indicators including employment growth and crude oil prices, and in particular the continued healthy absorption of quality office space (particularly in the downtown core).
One of the more exciting developments being discussed in the market is the potential development of the west tower of Eighth Avenue Place. The developer is in discussion with at least one tenant that could result in the second tower starting construction within the next 12 months. Most recently, Prism Developments announced that they’re moving forward on the previously proposed LEED Candidate 11-storey building with over 200,000 square feet of office space in the beltline district. Construction is slated to start in May this year with completion in Q1 2013. Developers and investors are certainly paying attention to the continued demand of quality space in the market place.
Place9-6
Up to 82,000 Sq. Ft. Downtown Office Head Lease Opportunity
Riverbend Atrium OneFrom 781 to 3,827 Sq. Ft. Suburban South Office Head Lease Opportunity
Weston Centre Up to 12,580 Sq. Ft. Suburban South Office Head Lease Opportunity
Up to 78,194 Sq. Ft. Downtown Office Headlease \ Sublease
8West 635 - 8th Ave SW
Up to 117,568 Sq. Ft. Downtown Office Sublease Opportunity
JamiesonPlace
24,680 Sq. Ft. Downtown Office Sublease Opportunity
Matt Evans
Tracy Fu
Steve Goertz
Larry Gurtler
Eric Horne
Peter Jenkins
Allen Jovica
Andrew King
Ben Morrison
Alexi Olcheski
Mark St. Pierre
Doug Pilip
Nairn Rodger
Glenn Simpson
Peter Thorpe
Todd Throndson
Stephen Woodward
Alex Wong
Allan Zivot
403.232.4301
403.232.4304
403.232.4322
403.232.4326
403.232.4339
403.232.4337
403.232.4344
403.232.4320
403.232.4385
403.232.4332
403.232.4319
403.232.4317
403.232.4341
403.232.4329
403.232.4342
403.232.4343
403.232.4316
403.232.4327
403.232.4307
Calgary Office Leasing Team
Business Condominium Team
AVISON YOUNGGulf Canada Square#309, 401 - 9th Avenue SW, Calgary, AB T2P 3C5T 403.262.3082 F 403.232.3325 www.avisonyoung.com Avison Young Real Estate Alberta Inc.
AVISON YOUNG The Office Report - Q1 2011
Sustainable Green BuildingsMore Tenants Demand Green
It is worth noting that a growing number of proposed office developments and recently
completed buildings strive to incorporate green building elements and compliance with an environmental certification program. Office building owners and operators increasingly recognize the various benefits of an environmental friendly building. Higher building efficiency not only reduces operating costs, but also increases overall property value. However, the real drivers behind environmental sustainability are the tenants who occupy the space. With global sensitivity surrounding the environmental impact of Alberta’s oil sands, energy companies and other major corporations have placed an emphasis on the environment. Firmly entrenched as part of their corporate identity and strategy, this focus naturally extends to their selection of office space. This trend will continue well into the future, with a premium for office buildings meeting or exceeding recognized green standards. In order to remain competitive for tenants over the long term, it will not be uncommon for existing buildings to undergo retrofits to enhance operating efficiency and incorporate sustainable design elements whenever possible.
Is Calgary GettingGreener?Where We Stand on Sustainability
71 commercial office projects in Calgary have obtained the BOMA BESt (Building
Environmental Standards) Certification since 2008.
15 commercial office projects in Calgary have obtained the LEED (Leadership in Energy and
Environmental Design) Certification with the US Green Building Council or the Canada Green Building Council since 2007.
The Bow, slated for completion in the latter half of 2011, incorporates a number of sustainable design features for lower energy consumption and more efficient air quality control.
Calgary Beltline office building, 1520, 4th Street SW, managed by GWL Realty Advisors, obtained Level 1 BOMA BESt Certification in 2011.
Canada’s first LEED Platinum high-rise office building, Eighth Avenue Place was pre-certified LEED Platinum by the U.S. Green Building Council in December 2010.
(Source: www.bomabest.com)
(Source: www.usgbc.org and www.cagbc.org)
Pali Bedi
Fred Clemens
403.232.4311
403.232.4312
Related Documents
