It is heady days in Edmonton’s commercial real estate sector as sales nudged a record pace in the first quarter and the first sales started this month on the city’s 200-acre Exhibition Land site.
Commercial investment in the Edmonton region posted one of its strongest first quarters in recent history, with overall sales volume rising close to $800 million and sales nearing 200, according to data from The Network.
Industrial and land were the top performing asset classes in terms of dollar volume, up 76 per cent and 45 per cent respectively in the first three months of the year, compared to the same period in 2022, followed by multi-family, retail and office.
“Out-of-province investors are increasingly drawn to Edmonton’s affordable price point for land, a young and educated labour force, and favourable provincial tax structure and incentive programs,” according to Re/Max Canada’s recent RE/MAX 2023 Commercial Property Report that studied commercial real estate markets across Canada.
Avison Young, which has partnered with Edmonton’s property sales team to take the first two parcels of the Exhibition lands to market, told Western Investor that “multiple offers” arrived as of the June 21 deadline to receive letters of intent.
“We have a serious list of proponents, ”said Avison Young principal Reed Newnham, a member of the Avison Young team handling the sale.
Newnham said the city is now evaluating the offers but he said it “was too early” to release information on where potential buyers are from, or if the bids were above the asking prices.
The two parcels include 12-acres abutting a light rail transit line, which was listed for $4.4 million, and a second 7.8-acre parcel at the corner of 112 Avenue and 79 Street listed for $4.5 million. The land is designated for low-rise residential development. The asking prices averaged more than $474,000 per acre.
“This listing represents an early step towards realizing the potential of the Exhibition Lands as a vibrant, sustainable urban infill community,” according to a city statement.
“Potential purchasers will be required to submit a proposal for the land that aligns with the guidelines and vision of the Exhibition Lands Planning Framework, including the requirement for all phase one residential dwellings to be built to a net zero standard,” the city statement added.
According to the city, servicing could begin as early as spring 2024 with the first homes completed by 2025.
Current zoning requires a minimum of about 400 homes in a format of between two and six storeys. Build-out is slated to take four to seven years.
Multi-unit residential land is not a slam-dunk sale in Edmonton, however, Re/Max noted.
Multi-family land sales through the first three months of this year fell short of 2022 levels, with eight sales valued at just more than $21 million.
“Financing land can be a challenge for some in today's higher interest rate environment,” Re/Max noted. However, the Exhibition Lands have the full backing of the city, and having approvals has helped to accelerate sales of multi-family land that has servicing and zoning in place, the agency noted.