Our monthly data showing leading trends affecting western real estate markets
To some, the 58-storey Bjarke Ingels Group-designed tower Telus announced last month for Centre Street and 7th Avenue SW in Calgary may be one more sign that the West has arrived.
But with 26 storeys of office space and 341 residential units on the upper 32 storeys - across the street, no less, from H&R REIT's equally towering Bow, with 58 storeys of office space - the tower is testimony to the appetite for office space in the city.
During the second quarter of 2013, Calgary's office market was the sole locale where vacancies dipped - sliding to 7.8 per cent from 8.1 per cent in the previous quarter. Vancouver held its own at 8.3 per cent; in the other markets Western Investor tracks, both office and industrial, vacancies rose.
What's happening in Calgary may be unique to Canada, but CBRE Ltd. noted that the phenomenon is playing out in Boston, Denver, Houston and Seattle, too. High-tech and energy are the sectors of the moment, driving leasing and overall economic activity as well as rents. Downtown Calgary saw occupancy costs rise 12 per cent in the first quarter, year-over-year, neatly sandwiched between the increase of 10.5 per cent posted in suburban Seattle and 14.9 per cent in downtown Houston.
Still, average net rents in Calgary and Western Canada remain low by global standards: $42 a square foot in downtown Calgary and $37 in downtown Vancouver compare favourably to US$96 a square foot in downtown San Francisco, US$120.65 a square foot in Midtown Manhattan or a startling $253 a square foot in in Hong Kong.
- Peter Mitham
From the Western Investor, August 2013
