Office Market Occupied at Levels Above 2008

Photo by Colin May
Photo by Colin May

All ‘AA’ through ‘C’ class office space categories showed positive momentum in the first quarter of 2011. The Calgary downtown office market occupancy achieved higher levels than during the height of the real estate market in the second quarter of 2008.

According to a Colliers International report, in the ‘A’ class category, Bow Valley Square contributed the most (to over 100,000 square feet of absorption alone) and in the ‘AA’ class category, both Eighth Avenue Place and Jamieson Place showed strong activity that accounted for approximately 100,000 square feet of leasing. Occupied space reached 33.7 million square feet in the past quarter and the overall vacancy rate declined to 10.92%, equalling about 393,000 square feet of positive absorption in the same time.

The strongest drivers of the momentum are high oil prices. Oil companies continued to grow, starting new projects that require new office spaces. The recently completed Eighth Avenue Place absorbed 50,000 square feet during the last three months. It is currently 88% leased. Direct Energy Marketing Ltd., Bonavista Energy Corporation, TORC Oil & Gas Ltd., and BMO Nesbitt Burns have moved into Eighth Avenue Place, and many other tenants are expected to move there in the summer.

“With oil trading at above $100 a barrel, leasing activity in the Calgary downtown office market is expected to remain strong throughout 2011,” says the report. “As employment increases, vacancy numbers will continue to decline.“

The Calgary Herald also announced that the Calgary Board of Education (CBE) has officially put the downtown Education Centre building up for sale by public tender with a minimum bid price of $40 million. The tender will expire on May 4. The board insisted that the Armengol sculptures, known as the Family of Man statues, are not for sale. The future of the sculptures will be determined by the City of Calgary, the sculpture’s owners. According to CBE, the building will be vacant by June 2011, after the staff move into the new Education Centre at 1221 8th St. S.W.

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