CALGARY OFFICE SPACE IN-TRANSITION // COMMERCIAL LEASING
CALGARY OFFICE SPACE IN-TRANSITION STABILITY WILL TAKE ABOUT TWO YEARS
BY JOHN HARDY
F
or most Calgary area commercial real estate professionals, the 2021-2022 Calgary market is much like doing business in an unpredictable unknown. There are many past and present business factors which have impacted Calgary’s commercial real estate. While the nearly one-and-a-half years of workplace lockdowns – forcing employees to work virtual from home – have been a crushing tsunami, taking a huge toll on Calgary’s commercial space, not all of Calgary’s commercial real estate crunch is COVID-related. Calgary is also more than six years into a severe commodity price-induced downturn which has significantly affected Calgary business, the economy, migration, employment, consumer confidence and the demand for commercial real estate. “To best understand the scope of the situation,” says Matt Rachiele, the plugged-in senior vice president of Investment Sales with Colliers, “the city-wide Calgary office market consists of approximately 73 million square feet (sf) of space. Currently, there is a more than a 28 per cent vacancy rate of about 20 million sf. Downtown has, by far, the highest vacancy rate of any submarket in Calgary and saw the largest change during 2020.” As the charts and graphs show, all areas of the city were broadsided by office vacancy increases during the past year. Again, while the workplace impact of the pandemic has battered office space needs and commercial real estate, there continue to be other factors in-play.
“Of course, the lockdowns have limited people from going to work and interacting with local social gatherings,” explains Todd Throndson, principal and managing director with Calgary’s Avison Young Commercial Real Estate Services. “Companies have largely allowed their staff to work from home during the pandemic and those changes resulted in challenges for communication, team building and accountability. “The lack of staff being in the office, combined with other pandemic restrictions, have also had an effect the amenities that could still be offered, which caused service tenants (particularly retail) to struggle just to meet their obligations. ABOVE: MATT RACHIELE, SENIOR VICE PRESIDENT, INVESTMENT SALES WITH COLLIERS.
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JULY 2021 // BUSINESS IN CALGARY // BUSINESSINCALGARY.COM
