Calgary Office Vacancy at 25%
CBJ — In the midst of a prolonged energy slump Calgary’s office sector continues to struggle, with vacancy rates nearing 25%.
The 2016 ReMax Commercial Investor Report highlights the impacts of the oil downturn on various types of properties in the city.
“In some asset classes, particularly office space, the sublease market is putting pricing pressure on the primary lease market,” the report reads. “As a result of companies downsizing, lease-holders in long-term leases are looking to sublease, and in order to do so have to price below market rate. This is having the most impact on office space, but is affecting retail as well.”
Sales of commercial property in the first half of 2016 were down 12% compared to the year before.
Calgary has historically been “a resilient market,” according to the ReMax report notes, but this recovery is likely to be slower than usual.
With several major projects still underway, however, it warns that the supply of office space is likely to continue to rise without a corresponding increase in demand.