Calgary’s struggling downtown office market is seeing a bit of a rebound, according to a new report by Avison Young.
The commercial real estate company’s Q2 2019 Calgary Office Market Report was released Wednesday and shows the downtown office market registered its fourth quarter of positive absorption — something that has not happened downtown for the past seven years.
“We’re going in the right direction,” said Susan Thompson, Avison Young’s Calgary research manager. “We’ve definitely turned a corner on the market.”
According to the report, Calgary’s downtown office vacancy rate was 24.4 per cent as of second quarter 2019. That’s down from 26 per cent a year ago.
“We’ve obviously got tenants that are looking at coming in because it’s more affordable than it was in the past,” Thompson said. “We’ve also got companies that are new to Calgary that are coming in to set up.”
While that is a promising trend, Thompson said they still expect it to be a slow recovery with a modest positive absorption over the next 12 months.
“We don’t see any cliffs that we’re going to fall off,” she said. “But we also don’t see a big acceleration in the change.
“In order to pull Calgary’s office market back into what we call a balanced market — which is in that six to 10 per cent vacancy range — at our current pace, it would take us 10 to 15 years.”
Calgary’s overall office market also saw a strong half in 2019, once again with a fourth-straight quarter of positive absorption — something that had not occurred since 2014.