At one time, each desk in every Calgary downtown office tower was filled. Now, walking the halls in many buildings is eerie. And Calgary Economic Development says it could take 15 years to fill the empty floors.
In the penthouse suite of one office tower Global News recently visited, the last tenant left the furniture behind.
“No one is denying it anymore,” Greg Kwong of CBRE Limited said.
Kwong has been in the Calgary commercial real estate business for decades.
His global firm predicts the vacancy rate could hit 28 per cent in the next two years, up from the current 22 per cent.
“In Calgary we’ve never seen it that high, north of 25 per cent,” he said. “And if it has been, it’s well before we started taking our stats.”
The one upside is lower rents for tenants still needing space, with some discounts ranging between 30 and 80 per cent depending on the type of lease.
“The reason why we have such large vacancies is because people have been laid off from good paying jobs and it’s hard to see that,” Kwong said.
“There’s really no rush hour anymore. I would call it, a ‘rush ten minutes.’”
Calgary Economic Development predicts the city won’t see another highrise built for a decade.
President Mary Moran’s organization is actively pursuing companies to move to Calgary, since the city’s been left with a glut of space and unemployed workers.
“We all know that there’s a fundamental shift in the energy industry–and if there’s conservative growth in the upcoming years–that it will probably take 15 years to fill that office space vacancy,” Moran said.
Complicating it all, three new buildings are going up, including what will be the city’s tallest skyscraper – Brookfield Place.
It will open late in 2017, but construction and planning began before the slump. That’s also when many leases were signed.
Cenovus – one of its main tenants – is signaling it may no longer need as much space.
Experts say such situations will add to the city’s problems.
Kwong is just hopeful for positive news ahead.
“I think it will be better, but how much better?” he said. “That’s the question.”