Alberta's office real estate market has seen a further relaxation of vacancy rates that is set to increase further this year, according to a new commercial market forecast by CBRE.
Calgary's office sector, which has 241 acres of vacant space in the downtown market alone, is expected to see vacancy rates rise from an already loose 27.2 per cent to a whopping 29.1 per cent this year, according to the global commercial real estate firm.
With so much empty space, owners are looking to convert former office buildings into other uses such as residential, which CBRE describes as "interesting but not impactful."
The report said, "Stakeholders continue to look for solutions to the historically high vacancy rates in downtown Calgary. The repurposing of empty offices into other uses has been the most widely discussed solution, however challenges with this strategy remain."
In Edmonton, office vacancies are predicted to rise from 20.1 per cent in 2019 to 21.1 per cent this year. However, rents are expected to stay flat and there is optimism for the Alberta capital's office sector.
CBRE wrote, "With world-class AI research and development at the University of Alberta, talent is flocking to the city and boosting the footprint of the technology industry in Edmonton. Over the past five years, Edmonton has seen a 25.7 per cent increase in tech talent, with over 28,400 technology workers in the city. This growth trajectory is expected to continue and will be a main driver of the office market."
CBRE's prediction's for Alberta's commercial market are listed in the tables below, and you can download CBRE’s full national report from here.