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Calgary Real Estate: Commercial Office Spaces Emptier Than Ever

Posted by Staff Reporter on Apr 15, 2016 09:35 AM EDT
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A view of the Vancouver city skyline as it is accessed by the Granville Bridge (R) as seen from the Burrard Civic Marina on March 11, 2009 in Vancouver, Canada. Vancouver will be the site of the 2010 XXI Winter Olympics. (Photo : Doug Pensinger/Getty Images)

The empty core of Calgary hit a new record in more than three decades. The situation, which was once the financial pulse, is expected to get worse, according to a real estate firm.

In Wednesday, April 13, CBRE Canada estimated that the downtown office vacancies were 20.2 percent on March 31. The figure is almost a double of the previous 11.8 percent rate of vacancies in 2015, according to a feature from CBC.

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CBRE's managing director Greg Kwong said this would be the first time that office spaces of as many as this is available Calgary, at least since 1983. If the situation continues, the city may hit a new high record that is more than 22 percent.

"It's going to get a little bit worse before it gets better. Unless oil jumps back to $80 a barrel, I don't think we'll go down to the teens," said Kwong.

A report from Barclay Street Real Estate Ltd., which was issued on Tuesday, April 12 also said that Calgary's downtown office spaces got emptier during the first quarter of the year, with vacancies peaking at 2.2 percentage points if compared to 2015's last quarter.

The Barclay also reported that the vacancies increased to 19.5 percent, with a recorded 938,000 more square feet available on the market. According to the report, if this continues, by 2018 the rate for vacancies may reach 24 percent.

The increase in commercial vacant spaces came as energy companies continuously consolidate operations and announce layoffs due to reducing oil prices, according to a feature from the Huffington Post.

MEG Energy, on the other hand, is subleasing at least 300,000 square feet, while Penn West Energy has 73,000 square feet and Shell Canada has 183,000 square feet available.

The vacancies hit a historically high record, with almost 41 million square feet of the downtown area's available office space and subleases reaching almost half of what are being offered. In the present quarter, the oil price hit US$26 per barrel, and this is also the lowest point following downturn.

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