THE BOOM AND THE CHALLENGE // COMMERCIAL LEASING
THE BOOM AND THE CHALLENGE CALGARY’S INDUSTRIAL AND OFFICE SPACE BY JOHN HARDY
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here is good news, and uncertain and unpredictable news when it comes to Calgary’s battered and bruised commercial real estate market. The juxtaposed reality is that Calgary’s commercial real estate is a contentious, binary topic: office and industrial. Despite the new normals of the Calgary workplace, workfrom-home routines and options and guess-work about how much office space companies may need in the long term, industrial space is a separate and entirely positive story. According to the recent Colliers’ Industrial Market Report, Calgary is in the midst of an industrial real estate boom! “The pandemic has fuelled a rapid rise in e-commerce activity and demand for warehouse space, causing vacancy rates to tumble across the country.” The Report also points out that, in the second half of 2022, the need for industrial space continues to increase as global
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JULY 2022 // BUSINESS IN CALGARY // BUSINESSINCALGARY.COM
supply chain constraints have led retailers to adopt a justin-case inventory strategy and seek out even more space to house additional products. It also explains why the situation is turning out to be a Calgary boom. While markets such as Vancouver and Toronto are experiencing a critical shortage of industrial product – with record low vacancy rates of 0.4 per cent and 0.7 per cent, respectively – Calgary presents distributors and retailers with a welcome alternative. “Calgary’s industrial vacancy rate dropped 185 basis points year-over-year, as tenants look to Calgary to support their warehouse and distribution needs.” The Report mentions positive examples of major players setting up Calgary distribution centres over the past few years, including Amazon, Lowe’s, Home Depot, Canadian Tire and Walmart, reflecting the many advantages of investing in Calgary. “The demand for warehouse space is not expected
