Source: https://mailchi.mp/7bc2bab1cd7e/office-space-available-downtown-vacancy-rates?e=6f1f3fb3a5
There are many ways to gauge how an economy is doing. One way is to look around a city’s downtown to get a feel for the “hustle and bustle”. A related, but more objective measure, is the office vacancy rate.
According to this measure, Calgary is still reeling from the recession. The city has a downtown office vacancy rate of 27.8 per cent. Edmonton is faring better but still not great, at 15.7 per cent.
There are two main factors affecting these rates. The first is the amount of new space coming on the market thanks to construction. The second is the demand for office space.
In this sense, Calgary has been hit with a double blow. Prior to the recession, the red hot economy fuelled a construction boom. That, combined with layoffs in the oil sector, has pushed the vacancy rate from about ten per cent before the downturn to its current elevated level.
Edmonton experienced a similar situation. A number of major new building projects added to the available office space during the downturn. Edmonton has seen its vacancy rate fall by about five percentage points over the last year but the completion of the giant 69-storey Stantec Tower might cut into these gains.
The silver lining of a high office vacancy rate is that businesses in need of space have more options in terms of price and quality. Nonetheless, the stubbornly high vacancy rates in Alberta’s two largest cities point to the slow nature of the economic recovery.
About Don Cholak
