Thinking big

Commercial real estate investment represents unique set of challenges and rewards

Investing in commercial real estate could be considered the major league of real estate investment.
The skills required are greater, but so too are the potential rewards.

Greg Kwong, regional managing director for commercial real estate company CBRE in Alberta, says there is really no strict definition of commercial real estate – it can be a major office tower in downtown Calgary, a fourplex apartment building or anything in between.

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Calgary’s immovable skyline

No new downtown office towers for at least five years, say experts

Despite the number of construction projects currently on the go, it is unlikely Calgary’s downtown office market will see any new towers for quite some time.

Todd Throndson, managing director and principal for Avison Young in Calgary, says the millions of square feet of recently created new space, three new towers coming on line and a soaring vacancy rate will sideline any plans for more towers.

He says it will take several years – at least five – before the existing vacancy will be absorbed and a landlord will be prepared to take on the risk of constructing a new tower. Today, Calgary’s vacancy rate is about 25 per cent.

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Poised for growth

Calgary’s industrial market shows signs of turning the corner

While Calgary’s downtown office sector and its plunging vacancy rates overshadowed all commercial real estate activity in 2016, the city’s industrial market has better weathered the storm and is poised to grow in 2017, say experts.

According to Barclay Street Real Estate, vacancy for the industrial real estate sector finished 2016 at 7.76 per cent. It had peaked at 7.8 per cent in the third quarter of the year. In 2015, it was 6.57 per cent.

“Absorption was a negative 127,373 square feet for Q3. This was the only quarter of negative absorption we have had since the ’90s,” said Jon Mook, executive vice-president of Barclay Street Real Estate’s industrial division.

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Core issues

Downtown office commercial market to see higher vacancy rates in 2017

Despite setting a third-quarter record with a reported $11.2 billion in sales, Calgary’s commercial real estate sector will likely see vacancy rates continue to soar this year and next, predicts real estate firm CBRE Ltd.

CBRE Calgary-based managing director Greg Kwong said the downtown market will feel it the hardest, with vacancy rates that are expected to close in on 30 per cent.

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Healthy homes, healthier people

Pilot planning initiative puts public health front and centre of new community development

A stretch of Nose Creek that straddles Calgary’s northwest and northeast quadrants may now be only home to scenic, rolling grassy hills.

But soon enough, about 9,000 city residents could being calling it home sweet home, along with 21,000 jobs, as planning is underway to develop a community with residential, commercial and industrial opportunities.

Most notably, however, is this community, once built, will be one of city’s healthiest places to live, work and play.

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