The Saskatoon office market is on the verge of perhaps the biggest transformation in its history.
With River Landing's first tower (the East Tower) scheduled for completion later this year – its 13 storeys will encompass 185,500 square feet of space – and the Nutrien Tower adding another 18 storeys and 280,000 square feet of space in 2022, the city’s office inventory will jump by 12 per cent.
“The Saskatoon office market is holding its breath,” said Susie Lalonde, market intelligence co-ordinator at Colliers International. “Everybody knows [River Landing] is coming. That’s a lot of space to add to the city.”
The impact is already being felt with asking rates. River Landing is asking $35.50 per square foot, double the city-wide average and up from $25 in the rest of downtown.
According to Colliers’ just-released report on Saskatoon’s office market, vacancy stands at 16.5 per cent at the end of the second quarter, up 3 per cent in just three months.
The challenge for the local real estate community is that no giant tenant from out of town is swooping in to lease up a substantial chunk of space.
“These tenants are coming from the rest of downtown,” she said. “There’s nothing like [the River Landing buildings] in the province. They’re world-class properties. They’re going to be quite disruptive.”
The trickle-down effect will see A-class tenants moving into AAA space and B-class tenants moving up into the vacated A-class space. Rather than seeing doom and gloom, Lalonde said this development is a great opportunity for Saskatoon to revitalize its downtown.
“It’s quite lively there now. There are more bars and restaurants and it’s more of a social hub. If I was the owner of a Class B building, I would seriously consider converting it into apartments,” she said.