Calgary’s downtown vacancy rate predicted to stay in 20% range into next decade
Calgary’s Chinatown is like many other business districts in the city struggling with high vacancy rates and increasing property taxes.
“I think the economy and the unemployment is creating a desperate situation,” said Terry Wong, executive director with the Chinatown District Business Improvement Area.
“The Chinatown vacancy rate is an ongoing turnover rate as businesses are finding it difficult to keep up with their leases and their taxes and everything else and they are leaving.”
Business groups came to city council on Monday to make their case for why the city needs to shift some of the tax burden they have been bearing onto homeowners.
Calgary Economic Development CEO Mary Moran told council that downtown vacancy rates are predicted to stay in the 20 per cent range into the next decade.
“It’s the small businesses that I’m really worried about,” she said.
“And how hurt they have been during this downturn with loss of business and we are compounding their issues by adding more tax burden on them. So I do worry about them. Our residential taxes are still relatively low.”
The first quarter CBRE report released on Monday shows Calgary’s downtown vacancy rate is at 26.5 per cent. The report says merger and acquisition activity, along with downsizing, continues to negatively impact the downtown office market.
Compare that to Toronto’s downtown, dropping to a new record low vacancy rate of 2.6 per cent in the first quarter. Montreal now sits at 8.6 per cent, the lowest it has been since 2013, with tech company growth playing a key role in this decline, according the CBRE report.
WATCH BELOW (Jan. 13, 2017): With the office vacancy rates in Downtown Calgary near 30%, some say it’s time to tear it down and rebuild. Global’s Gary Bobrovitz reports.
Moran says Calgary’s downtown needs to evolve and that means attracting more diverse businesses.
“We are quite far behind all those other cities in their transformation around advanced technologies,” Moran said.
Calgary city councillors are warning of the spin-off effects that come from high vacancy, ranging from unemployment to crime.
“It’s absolutely something that we can’t ignore and we have to do a lot better job with,” Ward 13 councillor Diane Colley-Urquhart said.
“Otherwise, all these plans that we are talking about today are really all for naught if people don’t feel safe and they’re not attracted to the downtown core.”
Calgary’s downtown vacancy rate hit a record high of 27.8 per cent in the second quarter of 2018.
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