Sky rising

Is there a glimmer of hope in Calgary’s struggling downtown office market?

A new report by Avison Young suggests the market may be turning the corner following a brutal two years of ploughing through a recession.

The vacancy rate in the core was 23.9 per cent in the first quarter of the year, up from 17.6 per cent a year ago, but basically unchanged from year-end 2016.

“The first-quarter 2017 vacancy level actually represented positive news as the market took its first steps in halting its overall downward trend,” said the commercial real estate company.

Todd Throndson, principal and managing director of Avison Young’s Calgary office, says the downtown office market appears to have hit a pause in its rising vacancy.

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Improving International Avenue

A large grant aims to improve the economic development of the multicultural business district along 17th Avenue S.E.

Calgary’s International Avenue has developed into a burgeoning marketplace in recent years and a grant from the provincial government will help the area grow even more.

A $300,000 grant from the Community and Regional Economic Support program to the International Avenue Business Revitalization Zone, located along 17th Avenue S.E., will go toward Phase 3 of the Heart of the New East Community Economic Development Project, which will establish a comprehensive community economic development strategy, develop a promotional image campaign, enhance the Emerge summer market and expand the social innovation co-working hub.

Alison Karim-McSwiney, executive director of the International Avenue BRZ, says the association has been researching ethnic entrepreneurs in the greater Forest Lawn area and the majority of businesses on the street have been in operation for more than 10 years.

Karim-McSwiney says the goal of the research was to find out essentially what people liked about the area, what it could do to improve the area, what were some of the stumbling blocks for people starting businesses, and how the BRZ could help them grow their business or start one.

The multicultural business district, which is about 35 blocks and just over four kilometres, has about 425 businesses with a wide range of retailers, restaurants and grocery stores.

According to Karim-McSwiney, there are almost 1,000 businesses operating in the greater Forest Lawn area.

“One thing that was extremely interesting to us is we found there were a number of home-based businesses that were operating in the area as well,” she said, adding that the BRZ is hoping to help some of them grow out of their homes.

Phase 3 from the Alberta government will allow us to continue to incubate new businesses. To have a co-working space and innovation hub that entrepreneurs, artists, makers, people in the area, can access.

“Phase 3 from the Alberta government will allow us to continue to incubate new businesses. To have a co-working space and innovation hub that entrepreneurs, artists, makers, people in the area, can access,” said Karim-McSwiney. “We wanted a place where they essentially can connect and help each other. That’s really what the main amount of the money is for. We will continue to create more businesses. In turn, it will raise the economy in the area.”

The first two phases of International Avenue’s economic development project were funded in part by the City of Calgary and included research and the test incubation of small businesses. The third phase will align with the forthcoming infrastructure upgrade planned in the area.

One of the unique things the BRZ did last year was turn a shipping container into two retail bays where people could launch a storefront business. Out of six businesses, two went on to launch as a full-time enterprise. The concept will be run again this year from mid-June to September.

In a recent statement, Deron Bilous, Alberta Minister of Economic Development and Trade noted that the energy, agriculture, forestry, mining, and tourism industries all contribute to Alberta’s way of life.

“Last year, we launched the two-year CARES program to help communities with common interests, but limited resources, tackle economic development projects that they might not be able to on their own. Through these projects, local leaders are working together to grow and diversify our economy.”

 

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Waterfront’s Eleven

Launched in 2007, the Waterfront development has been ten years in the making with plenty more to come

The Waterfront development, an 11-building project, has become a landmark in downtown Calgary for Vancouver-based developer Anthem.

Elva Kim, vice-president of sales and marketing for Anthem, says five buildings have been completed now with close to 630 units just east of Eau Claire Market and along the Bow River.

“It’s great. It’s absolutely a landmark development for Anthem, both in terms of product, timing and location,” said Kim.

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Calgary Market Report CREB

Stabilizing for Spring

The housing market is set for a favourable spring as detached prices stabilize and city-wide inventory trends downward

Ask economists about the highs and lows of the housing market and they’ll say it won’t last –there’s a natural equilibrium that will eventually push things back into balanced territory.

It’s a theory that was certainly tested over recent years, but as time will attest, its best to trust economists in these matters.

As spring gets underway amid a strengthening regional economy, the housing market pendulum is slowly swinging back toward the middle.

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Upward trend for Alberta’s Economy

Province showing strongest growth in Canada this year

Several economic forecasts point in the same direction: Alberta has turned the corner.

Even though they remain in contrast to previous years when the Alberta economy expanded by four to five per cent annually, there is still a sense of optimism in the province.

Recent surveys by ATB Financial, who predicts a 2.2 per cent provincial growth this year, indicated owners and operators of Alberta enterprises are feeling more optimistic about the economy, and their business future these days.

“It’s definitely more upbeat. As I travel around the province and talk to industry associations and individual business operators, they’re almost consistently saying the worst is behind us, and we’re starting to see some modest improvement,” said Todd Hirsch, chief economist with ATB Financial.

Hirsch points to the stabilization of the petroleum industry as the biggest factor in the recovery of the economy.

“The downturn we saw in 2015 and 2016 was due entirely to the drop in oil price, the big pullback we saw in oil and gas investment, and everything else,” said Hirsch. “Now in 2017, we’ve seen the petroleum industry stabilize. That alone would give us zero growth or maybe very modest growth, but layered on top of that are other sectors that are doing well: the tourism sector, the agriculture sector, and the agri-foods sector.”

In his Provincial Outlook report, Robert Hogue, senior economist with RBC, says Alberta is seeing light at the end of a long and dark tunnel.

“We expect the economic turnaround to be gradual and uneven, which would be a departure from Alberta’s typical ‘boom-bust’ pattern exhibited in past economic cycles,” said Hogue.

He projects positive growth to return in 2017 at a rate of 2.1 per cent, reflecting an expected increase in energy-sector spending in the province. Such a rate of growth, he notes, would only partially reverse the cumulative 6.5 per cent contraction that occurred in the previous two years.

“We expect the recovery to continue and, in fact, accelerate in 2018,” he said.

The Conference Board of Canada also predicts growth for Alberta at a rate of 2.8 per cent, and says the province is poised to have the strongest economic growth in 2017, due to fast-rising oil production.

“Following two tough years stemming from widespread weakness in the energy sector, Alberta’s economy finds itself with the strongest economic growth this year,” said Marie-Christine Bernard, associate director, Provincial Forecast at The Conference Board of Canada. “Along with a big increase in oil production, some of the growth in Alberta will come from the rebuilding efforts in Fort McMurray.”

 

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