Downtown Saskatoon now has the lowest office vacancy rate in North America, perhaps the world, as the rate plunged to 1.7 per cent in the first quarter of this year. The Class A vacancy rate is even tighter, at 0.9 per cent.
Of the 46 office buildings in the city's core, only two have more than 4,000 square feet of contiguous space available, according to a spring survey by Colliers International.
"Despite the volume of office construction, new buildings are not offering any relief," Colliers reported, noting that nearly all the new space is already pre-leased. About 50,000 square feet of new space has been added in the past year.
The only office sector with space is 19 Class C buildings and these have less than 18,000 square feet in total.
Average rents per square foot in downtown office towers range from $16 for Class C space to around $20 for Class B offices and peak at $25 to $30 per square foot for new Class A offices, Colliers found.
Demand has also driven the suburban office vacancy rate down, to 8.8 per cent, compared with 12.4 per cent at the end of last year. This year, North Prairie Developments began building two new suburban office buildings that will add 25,000 square feet.
Other new office projects include the 33,000-square-foot Nexus project on 2nd Avenue North, which is fully preleased, and the 78,00-square foot River Centre on 2nd Avenue South that has 90 per cent of its space leased. Last month construction started on a 50,000-square-foot office building on Wall Street. This LEED building completes next year and no space has yet been claimed, though that is expected to change soon.
from Western Investor June 2012
