Industrial land prices - $120,000 to $160,000 per acre for partly serviced, $265,000 to $285,000 per acre for fully serviced - have bottomed out, realtors suggest, and while they may not surge forward significantly in 2011, there's now demand from spec builders willing to build industrial shops.
The city itself is expanding industrial development via a new industrial park, Queens Business Park, that it is developing west of Highway 2 and south of Highway 11A in the northwest sector of the city. It plans to spend about $8.3 million on roadwork in the area this year. The development will cover close to 300 acres and include mostly industrial uses, but some commercial uses as well.
Construction work has also started this year on what's known as the North Highway Connector Project. It will provide a bypass around the city's northeast beyond the slower-speed 67th Street/30th Avenue corridor, and include a new bridge over the Red Deer River in the city's northeast corner. The connector will ensure a smooth flow of traffic around the existing developed areas of the city from Highway 11 in the east to Highway 2. Its completion is several years away.
The City of Red Deer's building permit stats back up Salomons.
While 2011 isn't likely to resemble the boom years of 2006 or 2007, it's running ahead of 2010 at this point. As of the end of May, the city had issued permits for $55.4 million in new building activity in 2011. That was up roughly a third over the 2010 pace.
The new activity includes not only the housing sector, but commercial activity as well.
While commercial growth has been centred on Red Deer's south end in recent years - stretching into Red Deer County along Highway 2's Gasoline Alley - 2011 will see retail expansion in the northeast sector of the city along 30th Avenue/67th Street with Clearview Market Square. The shopping centre is a Melcor Developments Ltd. project that should eventually see 263,000 square feet of new commercial space on a 22-acre site.
Construction has already started on the project. In the deep south - but still within city limits - Qualico Developments is poised to start construction on what is known as Southpointe Junction at Taylor Drive and 22nd Street. It will boast 350,000 square feet of retail development immediately west of Qualico's existing Southpointe Common project.
Southpointe Junction also envisions residential space.
Mixed-use projects are likely to become more prominent in Red Deer, especially as downtown redevelopment continues.
Changes in the city's core will continue this summer with significant reworking of three blocks of 50th Avenue (known as little Gaetz Avenue) in the heart of Red Deer. The city is spending about $4.7 million to enhance the streetscape of Little Gaetz, making the one-way southbound street more attractive for pedestrians and businesses, explains Charity Dyke, Red Deer's downtown co-ordinator.
The changes reflect the Greater Downtown Action Plan and the desire of residents to see a more active core, both residentially and commercially, explains Dyke. The work will be followed in 2013 with reworking of another three blocks of Little Gaetz at an estimated price of $4.3 million.
To the west of Gaetz, planning work continues for redevelopment of what's known as the Riverlands area, a place formerly occupied by the city's public works yard and a wide range of warehouse uses.
City council is expected to approve a long-awaited area redevelopment plan for Riverlands this summer, and the document envisions higher density mixed-use parcels on the southeast bank of the Red Deer River.
The city itself is a major landholder in the area with about one-third of the deeded land, but has made it clear that it wants significant private development on the core's west side to go with new public spaces aimed at growing the arts.
"We do know that to achieve the vision we're looking for in Riverlands we are going to have to look at private development in that area, and that will be our focus looking forward," said Dyke.
For the most part, the planning process will have to move along a little more before new projects move ahead.
Still, some developers have trotted out plans for projects close to the river's edge. One such company is River City Development, which wants to move ahead with a mixed-use development featuring 37,000 square feet of commercial on the bottom two floors; higher-end residential condos above that would sell for between $440,000 and $660,000.
The project at Gaetz Avenue and 55th Street would occupy a former creamery site, reflecting the greater downtown plan to replace traditional warehouse and industrial space with residential and commercial uses, a concept supported by Red Deer residents.
The Riverlands area plan calls for a strong connection between the river and downtown, higher densities, unique public spaces including a public market and a hotel and convention centre, among other features. It's expected to be formally adopted by city council this summer.
The increase in developments will likely affect existing lease rates, Salomons said.
"I think with Qualico and Melcor bringing on all this retail space it's going to put some downward [vacancy rate] pressure on the existing space," he predicted.
That's a factor to be aware of in a centre where new space is leasing in the $22 to $25 per square foot range.
Not all commercial sectors are expanding right now in Red Deer, however, with the office market considered somewhat oversupplied.
Meanwhile, residential landlords are seeing a tighter market. Canada Mortgage and Housing Corp. estimates that average vacancy rate for private apartments in Red Deer is 7.5 per cent -- down from 9.2 per cent a year earlier. The national housing agency also calculated that the average rent for apartments of all sizes in the city is $770, down slightly from a year ago.
The median sale price of a Red Deer house is around $292,000, according to the local real estate board. In the first quarter, sales rose 10 per cent from a year earlier - the best first quarter since 2008.
from Western Investor July 2011