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Calgary bounces back as CRE sales rise, office vacancy drops

Calgary's 20 biggest commercial real estate sales in Q1-2022 topped $1.5 billion with some tied to a perception of bargain-priced real estate in Alberta’s biggest city

A combination of higher oil prices, pent-up demand and what are seen as bargain prices for property pushed Calgary’s commercial sales into record territory during the first three months of 2022.

If the previously reported sale of the Bow office tower, which closed on January 25, is counted, the top 20 transactions during the first quarter of this year reached $1.53 billion, according to research firm the Network. This compares with $910 million in the first quarter of 2021, if all 162 transactions at that time are included.

Network president Nathan Gettel suspects that when the final Q1 data is complete, it could reveal a record-setting pace in Calgary, led by the office, industrial and multi-family sectors.

Office sector

Oil prices at a 10-year high as of Q1 2022, have buoyed Calgary’s downtown office market, which has fallen from a nation-leading 30 per cent during most of 2021 to 28.9 per cent.

The overall vacancy has fallen to 25.4 per cent, according to Avison Young, down from 26 per cent at the end of 2021.

Calgary’s downtown Class AA office take up in the first quarter of this year reached 400,000 square feet, pushing the total lease-up or sale of prime space to 13 million square “for the first time in recent history,” Avison Young noted.

As well as the close of the landmark Bow building sale, the first quarter of 2022 also saw the $18.5 million cash purchase of a 50,000 square foot office building on 9th Avenue downtown by Calgary Technologies Inc.

“Activity in the office market is shifting away from shorter term blend-and-extend or stop-gap style deals, and back towards full scale moves as tenants gain more confidence,” Colliers suggested.


There were six multi-bay industrial sales in the first quarter, but the purchase of 68.6 acres of industrial land by Vancouver-based Beedie Developments could signal an accelerated move into Calgary by West Coast developers.

Beedie, through Beecal Developments Ltd., a subsidy, purchased the industrial site at 6502 106 Avenue SE, from the City of Calgary on February 24 for $38.2 million, or $557,000 per acre.

As a comparison, a 17-acre vacant industrial site was sold by the City of Burnaby, B.C., in December for $136 million, or $8 million per acre.

Beedie is no stranger to Calgary. It made its first foray into Alberta 11 years ago by buying 220 acres in northeast Airdrie to develop Highland Park Industrial. It has since developed the Glenmore Corporate Centre, a 235,000-square-foot centre in Frontier Business Park and the 93,000-square-foot Ironside Business Centre and, more recently, 170 acres of land in Rocky View County east of the city.

Other Vancouver developers, including Anthem Properties, are also active in Calgary, at least partially due to what is seen as relatively low prices for commercial and industrial land.

But, in its Q1 2022 National Market Snapshot, Colliers Canada noted that low land values are just part of Calgary’s attraction as oil prices push over US$100 per barrel.

“Steadily decreasing vacancy and increased demand for industrial product in Calgary continues to place upward pressure on asking rental rates,” Colliers’ report stated.

Calgary’s industrial vacancy rate is 3.5 per cent, compared to 4.6 per cent in Edmonton and shockingly low 0.4 per cent in Vancouver.  Industrial lease rates now average $9.00 per square foot, up nearly $1 from Q4 2021, but still the second lowest among Western Canadian cities.

More than 1.4 million square feet of new industrial space has completed in Calgary as of the first quarter 2022, and 7.65 million square feet is under construction, much of in speculative lease developments that will open next year.


Calgary-based Mainstreet Equity Corp. one of Canada’s largest landlords, is extremely confident in Alberta’s multi-family market.

Last year Mainstreet posted a 7 per cent growth in rental revenues, and a 5 per cent increase in net operating income.

“Canadian oil production was the highest on record in 2021, and energy companies reaped their largest-ever revenues over the year,’” said Mainstreet founder and president Bob Dhillon, who believes the oil-price surge will increase in-migration to Alberta this year.

Alberta welcomed 16,690 newcomers in the third quarter of 2021, the most in nearly seven years, according to Statistics Canada.

On January 4, Mainstreet paid $38.1 million cash for a 239-unit walk-up apartment complex with multiple buildings on Meredith Road in Calgary’s Bridgeland/Riverview area, a price of around $159,400 per door.

Avenue Living, also of Calgary, has also been aggressively buying rental properties in the city.

As reported here last month, Avenue Living purchased 764 apartments in three separate Calgary rental complexes on March 7 for $138 million. Then, on March 31, the company snapped up another 86 units in Calgary’s Setton neighbourhood.


Calgary is seeing redevelopment of older shopping centres this year and its resilient retail market – Alberta retail sales held steady at an average of $7.6 billion a month all during the pandemic - is attracting investors.

The old Stadium mall site on 6.5-acres near the Foothills Hospital is being redeveloped into a mixed-use project that will retain retail, including an anchor grocery store, in a project by Western Securities.

Northland Village Mall is also being redeveloped into mixed-use residential and retail village.

On February 4, 2022, the 120,250-square-foot London Town Square was bought by a Richmond, B.C.-based investor for $36 million, one of the largest recent retail deals in Calgary.

Hotel market

On March 29, Coast Hotels announced its purchase of the 120-room Regency Suites Hotel in downtown Calgary from SM2 Capital Partners.

It is rare positive sign for the hard-hit Calgary hotel sector, according to CBRE’s just-released Canadian Hotel Industry Outlook. The CBRE forecast is for both Calgary and Edmonton to trail the market this year.

“Calgary and Edmonton are projected to grow revenue per room (RevPar) by more than 50 per cent, but lingering supply impacts and fundamental economic challenges remain. Nevertheless, CBRE expects Calgary to reach $62 in RevPAR for 2022,” according to CBRE Hotels director Nicole Nguyen.

But the rise in oil prices and the opening of travel and in-person conferences could surprise on the upside in 2022.

“The good news is that we anticipate hotels across Canada to be well on their way back to full strength by the end of this year,” said Nguyen. “In fact, depending on how substantially consumer confidence rebounds, and to what degree business travel picks back up, there’s even the possibility that the hotel industry exceeds expectations. That would be welcome news for a change.”