CALGARY OFFICE SECOND QUARTER 2017
Due to lower rents and tenant inducements, a flight-to-quality within the city core has improved vacancy in AA properties, such as Eighth Avenue Place, while lower class buildings suffer.
As a result of merger and acquisition activity earlier this year, potential consolication of downtown office space could move overall vacancy to approximately 30.0%
CALGARY INDUSTRIAL SECOND QUARTER 2017
As oil production in Alberta rises, Calgary's manufacturing sector will recover as well adn is projected to see an average annual output growth of 3.1% in 2017 and 2018.
This quarter saw an increase in overall deal velocity. Growing demand for inventory saw the availability rate compress 50 bps quarter-over-quarter to 9.3% overall, reaching the market's lowest level in four quarters.
Leasing activity remains bifurcated by size. For example, this quarter, activity for properties exceeding 50,000 sq ft was quite active, driven by transportation and distribution-type tenants. Whereas, leasing activity for properties less than 10,000 sq ft continued to remain very limited.
Construction activity remains soft while the market continues to adjust to the significant development cycle that unfolded prior to the energy downturn.
Should market conditions continue to improve, we anticipate Calgary's availability rate to hover around the 9.0% for the remainder of the year.