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Has Calgary’s downtown office vacancy rate finally hit bottom? Experts say maybe

Calgary office tower property owners are trying to attract tenants with new building designs and uses. Global News

Calgary’s record high downtown office vacancy rates may be nearing an end, according to commercial real estate services and investment firm CBRE Limited.

“The sentiment and the numbers are saying we hit the bottom,” said Greg Kwong, regional managing director for CBRE Alberta.

“Whether we go one percentage lower or higher, it still smells like the bottom.”

The CBRE 2018 Canadian Real Estate Market Outlook shows after two years of surging office vacancy rates, 2018 will be the year that finally stabilizes.

It forecasts downtown office vacancy rates to stay flat at 27.9 per cent.

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Greg Kwong credits that to a decreased supply with fewer major buildings coming on stream, as well as increased demand.

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Investors say Calgary will bounce back, and they’re seeing an opportunity to nab properties for lower prices now for larger returns.

“The old adage of buying low and selling high is holding true,” Kwong added.

But the CBRE isn’t expecting a bounce back any time soon. It expects downtown Calgary will continue to stay near the bottom for a couple of years.

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There is still a five to 10 year supply of office space waiting for tenants in the downtown core, and the dominant industry is energy, which is still struggling.