Saskatoon’s office vacancy rate is approaching 20 per cent due in large part to the declining energy sector, which caused many engineering companies that performed work for oil and gas companies to close up shop.
“I’ve never seen vacancy like this,” said Tusia Black, senior sales associated with ICR Commercial Real Estate.
“We’ve got to wait for the world economy to come back and recover. When tenants [in that sector] need that kind of office space, they need it quick. We’re a little insulated,
economy-wise, because of
potash, but when oil goes down, it affects everybody.”
The empty space isn’t spread out across downtown but is centred in the office towers. The 11-storey CIBC building, in fact, has several floors that are completely empty.
The warehouse district, on the other hand, which is located on the periphery of downtown, might as well be on the other side of the world. The area’s old brick buildings are a hive of activity with architectural firms, an orthodontist clinic, a sports bar, fine dining and some residential.
“It’s a specific client that wants that office space. KPMG isn’t going to want exposed brick. They put in their cubicles and it’s very institutional and clinical,” Black said.
But landlords aren’t panicking and have not dropped their rental rates.
“If there are no tenants, you can’t make tenants. When we’re talking to our landlords, we’re telling them there are no deals to be had right now,” she said.