Downtown Office Demand Decreasing

Calgary’s downtown office market is getting a little roomier.

According to a report from Colliers International, Calgary’s downtown office market saw negative absorption in the third quarter of 2013, with the vacancy rate increasing from 5.03 per cent in the second quarter to 5.67 per cent.

Year-to-date, the downtown office market in the city has seen a negative absorption of 782,479 sq. ft. and, barring increased activity, Calgary could see its first year of negative absorption since 2009.

In other commercial news, Colliers listed two popular local shopping districts amongst the top 10 priciest in the country. Calgary’s 17th Ave. S.W. and nearby 4th St. S.W. came in fifth and sixth in the Colliers report, with average lease rates of US$65 and US$60 per sq. ft., respectively.

While Toronto’s Bloor Street remains the most expensive haute couture destination in Canada with an annual lease rate of US$315 per square foot, it was Western Canada’s high-end retail strips that experienced impressive growth.

Vancouver’s Robson (US$200, 33.3 per cent increase) and Alberni (US$150, 43 per cent increase) streets, Victoria’s Johnson Street (US$35, 18.6 per cent increase), Calgary’s 4th Street West (US$60, 9.1 per cent increase) and Saskatoon’s Broadway Ave. (US$30, 11.1 per cent increase) all experienced a double or near double-digit increase in lease rates over the past year. These figures are in stark contrast to Eastern Canada, where many premium locations remained unchanged or even saw a decrease in lease rates

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