Calgary was on pace for a stellar year prior to the pandemic, with commercial real estate sales up 17 per cent in the first three months (Q1) of 2020 compared to a year earlier, according to the first Calgary CRE Market Overview by Edmonton-based The Network, a real estate market intelligence firm that has recently moved into Calgary.
To March 31, total investment reached $706.3 million, The Network reports. Office buildings were in highest demand. Industrial warehouses and land saw $161 million and $142 million invested, respectively.
Calgary office sales nearly tripled year-over-year, breaking $174 million versus approximately $64 million in Q1 2019. The boost was due in large part to the sales of 110 – 12th Avenue SW for $50 million and the sale of Stampede Station for $35 million. Both were sold by Artis Real Estate Investment Trust to Crestpoint Real Estate Investments Ltd. Rounding-out the top three sales was the $27.5 million sale of 6807 Railway Street by Calgary Railway Ltd.
The industrial market in Q1 2020 was fed primarily by owner-user purchasers, who accounted for more than two-thirds of activity and approximately $47 million in investment. The largest transaction by this group was the $24.4 million purchase of Telus Park a 114,481-square-foot building located at 2930 Centre Ave NE, which sold for $213.14 per square foot. The balance of industrial purchases were multi-bay properties and included 3530-32 Street, sold for $4.22 million. The largest transaction of the quarter by far, however, was the $88 million purchase of 10 SMED Lane (Icon Business Park) by Northam CIGF (Calgary Industrial) Holdings Limited. This transaction accounted for more than half of total investment.
Overall, investors in the multi-family sector took a break in Q1 2020, with both sales and dollar volume down substantially year-over-year. Avenue Living and Boulevard Real Estate Equities were active, with the latter putting approximately $19 million into two properties. The big-ticket property of Q1 2020 however, was the $19.5 million purchase of 1017-11 Ave SW by Canadian Apartment Properties Real Estate Investment Trust. Capitalization rates for multi-family deals declined year over year, dropping slightly to 4.68 per cent from 4.9 per cent in Q1 19. Average price per suite also decreased slightly to $185,999, down from $190,258 in Q1 2019.