Industry leaders share their thoughts on the year in commercial real estate

Riaz Mamdani - CEO, Strategic Group
"This past year reinforced there is no single event or new company coming to town that will solve the weakness we've seen in the office real estate market, especially in our downtown. Instead, we're reminded the future of this industry in Calgary will be built through smart, incremental change and adaptation. I am convinced there is a bright future for the office real estate market, but the reality is the market is in a tough spot right now and it will be for a while. (We need) a long-term vision and long-term strategies to attract new business to Calgary, creatively meet the dynamic needs of our tenants, and thoughtfully repurpose surplus and obsolete office space for other uses."

Justin Mayerchak - vice-president/partner, Colliers International
"Continued headwinds in Alberta's oil sector through 2018 led to further increases in vacancy, although we did see consecutive quarters of positive absorption downtown, driven largely by suburban tenants moving into the core – a shift we expect to continue as the City pushes tax revenues to the suburbs. Without major changes in public policy leading to appreciation in the West Texas Intermediate differential, it's difficult to forecast overall office market growth through 2019, however.

"Calgary's retail and industrial markets remain buoyant, driven largely by consumer spending. YYC has become a major Western Canada distribution hub, and, regardless of economic conditions, a place where folks continue to shop. We saw some significant office trades through 2018, but largely at a discount. Values and lack of available product in other major Canadian markets have pushed institutional capital our way, which likely means a flurry of transactions later this year and into next."

Greg Kwong - executive VP/regional managing director, CBRE
"Bad news in 2018 included the failure to get a pipeline built, the 'no' vote on the Olympics bid, 12 million square feet of vacant office space in the downtown and the resulting reduction in tax revenues. It was partially offset by the commercial industrial market, with companies like Amazon, Walmart, Lowe's and Canadian Tire establishing distribution centres that, while not hiring a lot of people, represented growth.

"For 2019, I would like to see a change in attitude of federal, provincial and civic governments towards business and the creation of jobs. The investment market is robust, so pension funds, private equity firms and individuals are buying real estate at suppressed prices. That will continue to be the bright spot in 2019."

Dave Rogowsky - director development, First Capital Realty
"From strategic acquisitions (and) year-over-year increases in both rental and occupancy rates, to the opening of Canadian Tire in the company's first urban location in the Beltline, 2018 proved to be a success for First Capital Realty in Calgary.

"From a market perspective, 2018 was an interesting year, where the retail market remained strong and we witnessed a slowdown in the residential markets. This has led to increasingly important joint-venture partnerships.

"Moving into 2019, I believe the market will see a continued interest in those partnerships, inevitably leading to larger and more creative projects. The retail market will remain strong in 2019, with a trend towards increasing rents and occupancy, especially in prime locations such as the Beltline."