The office market in Downtown Calgary is showing positive signs with the vacancy rate decreasing after reaching a peak.
Avison Young says that the third-quarter showed improvement as demand increased while some properties were removed from the inventory.
In the second quarter, Calgary had reached the highest vacancy rate in North America at 26.4% but the recent activity has seen that decrease to 25.7% with no expectation of it moving too much higher again in the foreseeable future.
“Even though Telus Sky will bump vacancy up when it comes on stream late next year, given our current economic situation and forecasting, the vacancy increase will not cause the vacancy rate to rise above the high-water mark that was recorded in the second quarter,” commented Todd Throndson, Avison Young Principal and Managing Director of the company’s Calgary office.
He added that absorption is expected to be flat for the rest of 2017 and the first half of 2018 with a 100,000 sq. ft of positive absorption in the third and fourth quarters of 2018 when the vacancy rate may rise to 26% but not above.
For 2019, Avison Young forecasts 150,000 sq. ft of positive absorption for 2019 and beyond.
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