Real estate firm Cushman & Wakefield is ranking Calgary with Moscow, Houston, and Aberdeen, Scotland, as the “oil-centric cities” whose downtown office real estate markets have been hardest hit by the global oil price shock.
In a new report, it predicts the vacancy rate for downtown Calgary’s Class-A buildings — the best quality offices in the tallest buildings — will hit 27.5 per cent by the end of next year, the highest since the company began tracking numbers in 1985.
The finding echoes Global’s Oct. 13 report suggesting nearly one third of the city’s office space could be empty by 2018.
And Canadian research director Stuart Barron says that prediction will likely be revised higher in the coming weeks to about 30 per cent due to slowing demand and the addition over the next year of about 2.7 million square feet in buildings under construction.
The report says the loss of 46,000 jobs in Alberta since oil prices fell below US$100 per barrel in mid-2014 has steadily emptied oil and gas head offices throughout Calgary’s core.
It says 4.3 million square feet of downtown space in all classes has been returned to the market over the past two years, much of it by tenants trying to sublet offices they no longer need.
Cushman & Wakefield says the overall downtown office vacancy rate grew from just over 20 per cent to almost 25 per cent in the three months ended Sept. 30.
Watch below from Oct. 13: A global real estate firm predicts the slumping economy will lead to nearly one third of Calgary’s office space being empty by 2018. As Reid Fiest reports, it could take 15 years for the space to be filled again.
With a file from Global News