The Greater Calgary & Area (GCA) industrial market showed continued signs of easing overall vacancy in the first quarter of 2024. The GCA availability rate moved up slightly from the end of last year, reaching 5.5% and vacancy – space without a headlease in place – rose to 4%. Q1 ’24 marked the third consecutive quarter of increasing vacancy and availability and while both metrics remained well below the low-7% recorded just before the COVID-19 pandemic, we view both as likely to continue ticking upwards in the near future and bringing the greater Calgary area industrial market into a balanced market.
Calgary’s Downtown office market is indeed getting healthier. Overall availability – and particularly the vacant component – of Downtown office space posted another quarter-over-quarter decrease as we moved into 2024. Just under 211,000 square feet of space was taken, which includes South Bow Corporation taking approximately 87,000 square feet pf space in 707 5th and National Bank of Canada taking approximately 44,000 square feet pf space in Banker’s Court. As of March 31st, there were just under 1,077 spaces throughout the Downtown being marketed for immediate occupancy. The last time there were this few listings was the 4th quarter of 2017 when, coincidentally, Downtown inventory was similar to present as it was prior to the completion of TELUS Sky.
2023 was another interesting year for the Oklahoma City office market. While the market experienced positive absorption of 30,307 square feet, that does not tell the whole story. The north submarket was the clear leader in 2023, with positive absorption of 164,433 SF, which can be attributed to two of the larger deals done in the market in 2023, Diamondback Energy taking a sizable portion of Building 13 at Chesapeake, and OU Health signing a major lease at Central Park. Looking at the other submarkets, we experienced more of the same when it comes to negative absorption, with the Midtown (-44,309 SF) and CBD (-53,656 SF) submarkets experiencing it the heaviest. While it does seem like things are beginning to calm down in the market, it is evident there are still major decisions to be made by certain tenants in the coming years as it pertains to their office space. Despite this, the office team at Price Edwards remains optimistic about the future of the Office market in Oklahoma City, as companies begin to evaluate what their return to the office might look like.
2023 was a good year for retail, better than expected. Sales were up and national vacancy is at all-time lows driven by both consumer disposable income and limited new construction as well as a stronger than anticipated economy. Locally the same dynamics were in play, vacancy ended the year at 8.9 percent, up from 8.5 percent at the end of last year. Most of the uptick in vacancy was either space coming onto the market from bankruptcies – Tuesday Morning, Party City, David’s Bridal – or some small tenant closures in older centers. It should be noted that most of the closures from national bankruptcies have either already been back-filled or deals are in process; Party City and David’s Bridal also kept a number of their stores open. There is a growing gap between the haves and the have-nots in Oklahoma City retail both in terms of vacancy and rent. If you dig into the numbers, newer, well-located centers are almost all 95 percent occupied or above. Rents on new construction, particularly restaurants, can reach $40 per square foot or more. Conversely, older centers who are not as well located have seen some slippage in occupancy and little improvement in rent over the past few years. While the local economy has held up well on an aggregate basis, there is significant uncertainty which tends to hurt smaller, local tenants more than national tenants.
Calgary’s overall retail availability rate increased during the first quarter of 2024, reaching 4.3%. This level of available space has Calgary approaching what we consider to be a balanced market; there is a variety of options for would-be tenants and existing tenants alike which is allowing rental rates to stabilize after several quarters of increases. Calgary experienced overall availability in this 4.5%–5.5% range in the not-too-distant past, when the closure of Sears Canada put 650,000 square feet of retail space on the market in Q1 2018. Availability increased to 5.1% in that quarter but by year-end, overall availably had dropped to 4.6% and remained in the low-to-mid 4% range through 2019.
Investors’ interest in the Calgary market remained quite strong through the third quarter of 2023. During the quarter, 85 transactions closed at or above $1 million, for a total of $468.8 million. To September 30th, total dollar volume invested reached $2.56 billion.
The theme of Q3 was ‘cautious optimism’, with some activity taking place as tenants continued seeking the best-appointed spaces Calgary’s Downtown has to offer, but at a slower pace than during the previous quarter. The primary drivers of quarter-overquarter vacancy reduction were sublease space takeback and inventory reduction as several office-to-residential conversion projects under the City’s Downtown Development Incentive Program (DDIP) are underway or set to begin in the near future.
Calgary’s overall retail vacancy rate continued to demonstrate remarkable consistency through the third quarter of 2023, remaining settled in the high-three to low-four percent range seen over the previous few years. The primary contributor to Calgary’s vacancy is the vast inventory of street front spaces which have proliferated in recent years as small, local shopping destinations and mixed-use developments have gained favour over power centres.
The industrial vacancy rate for the first quarter of 2019 has shown a minimal increase to 5.50%, up 0.02% from Q4 2018, which was 5.48%.
“As we review and analyze 2018 Investments Sales activity and results in Calgary, one quote comes to mind: “Your big opportunity may be right where you are now.” by Napoleon Hill. Though 2018 results are better than 2017 and 2016 investment sales numbers, we still have a long way to go. The arrow, however, is pointing in the right direction.”
TCN Worldwide's State of the Market: Eastern Edition, 3rd Quarter 2016 Prepared by Hugh F. Kelly, PhD, CRE, Consulting Economist to TCN Worldwide In this edition: –National and Macroeconomic Overview –Regional Conditions in the Eastern States –Commercial Property Investment Trends
THE NEW YORK CITY ECONOMY has not only kept pace with the national rebound; it has exceeded the U.S. measures throughout this decade. The most recent data, through the 2nd Quarter of 2016, shows New York outpacing the U.S. Gross City Product growth this year 1.7%, versus the national 1.2% rate in the second quarter. The City however, had stunning results in the prior three quarters, growing at 3.2% and 3.1% in the third and fourth quarters of 2015, and at 4% in the first three months of 2016.
TCN Worldwide's State of the Market: Eastern Edition, 2nd Quarter 2016 Prepared by Hugh F. Kelly, PhD, CRE, Consulting Economist to TCN WorldwideIn this edition: –National and Macroeconomic Overview –Regional Conditions in the Eastern States –Commercial Property Investment Trends
Absorption totaled 27,101 sq. ft. in the First Quarter of 2016, solid numbers for a market which had tens of thousands of square feet come on line due to the Deloitte relocation this spring. We continue to remain cautious with our expectations for properties just out of receivership and anticipate potential volatility as new availabilities are introduced to the Suburban West Shore Marketplace.
TCN Worldwide's State of the Market: Eastern Edition, 1st Quarter 2016 Prepared by Hugh F. Kelly, PhD, CRE, Consulting Economist to TCNIn this edition: –Overview of National Economic Context –Regional Conditions in the Eastern States –Commercial Property Investment Trends
First quarter 2021 closed with a direct vacancy rate of 19.46%, an overall vacancy rate of 20.76%, and an average asking direct rental rate reported at $18.51 psf. In March, the Michigan unemployment rate was recorded at 5.1%, a decrease for the third straight month, yet still at an elevated rate compared to one year ago when recorded at 3.5%. While the U.S. unemployment rate was recorded at 6.0% in March, it continues to steadily decrease as the number of jobless claims dip as many job sectors continue to reopen. Optimism continues to grow as U.S. employers are expected to continue to add jobs as many states move towards easing business restrictions, creating confidence in paving a path toward strengthening the economic recovery in the coming months. Many other factors signal a strengthening economy including consumer spending, investing, and housing demand. Consumer spending increased at the fastest pace in 9-months and was recorded at 4.2% in March, while home prices in the U.S. increased by 11.9% in February, the fastest pace in close to 7- years as demand for housing continues to escalate. The Federal Reserve also announced they expect to keep the interest rate near zero with no rate hikes through 2023.
First quarter 2021 closed with a direct vacancy rate of 5.18%, an overall vacancy rate of 5.60%, and an average asking direct rental rate reported at $7.02 psf. In March, the Michigan unemployment rate was recorded at 5.1%, a decrease for the third straight month, yet still at an elevated rate compared to one year ago when recorded at 3.5%. While the U.S. unemployment rate was recorded at 6.0% in March, it continues to steadily decrease as the number of jobless claims dip as many job sectors continue to reopen. Optimism continues to grow as U.S. employers are expected to continue to add jobs as many states move towards easing business restrictions, creating confidence in paving a path toward strengthening the economic recovery in the coming months. Many other factors signal a strengthening economy including consumer spending, investing, and housing demand. Consumer spending increased at the fastest pace in nine months and was recorded at 4.2% in March, while U.S. home prices increased by 11.9% in February, the fastest pace in close to seven years as demand for housing continues to escalate. The Federal Reserve also announced they expect to keep the interest rate near zero with no rate hikes though 2023.
"The good news about 2020 is that the pandemic’s effect on the multifamily market doesn’t appear to be sustained, rather, more of a temporary pause."
2020 was a year for the ages. Election years are always uncertain, but this was the most contentious in recent history. Add to this a once in a century style global pandemic, a stock market crash, a recession, record job losses, civil unrest, and negative oil prices. It was a year that will be recalled for many decades to come. 2021 is welcomed with renewed optimism, some sense of clarity and stability, as well a light at the end of the Covid-19 pandemic in the form of a vaccine. In spite of all of the distractions, Texas continued to plod along, albeit at a slower pace than the previous year.
2020 was a year for the ages. Election years are always uncertain, but this was the most contentious in recent history. Add to this a once in a century style global pandemic, a stock market crash, a recession, record job losses, civil unrest, and negative oil prices. It was a year that will be recalled for many decades to come. 2021 is welcomed with renewed optimism, some sense of clarity and stability, as well a light at the end of the Covid-19 pandemic in the form of a vaccine. In spite of all of the distractions, Texas continued to plod along, albeit at a slower pace than the previous year.
TCN Worldwide's State of the Market: Western Edition, 4th Quarter 2016 Prepared by Hugh F. Kelly, PhD, CRE, Consulting Economist to TCN Worldwide In this edition: –National and Macroeconomic Overview –Regional Conditions in the Central States –Commercial Property Investment Trends
The Denver office market experience an upward tick in vacancy for the first time in 6 quarters during the third quarter of 2016. CoStar reported the third quarter vacancy rate at 9.6%. It was also reported that rental rates decreased slightly to $24.94 in Q3 2016 from a reported $25.11 the previous quarter. Net absorption for the overall Denver office market was a negative (29,698) comparing to a positive 754,222 square feet at the end of Q2, and a positive 722,380 square feet in Q1 2016.
The overall Denver industrial vacancy rate ended the third quarter at 4.5%, remaining exactly the same as the previous quarter. More specifically, both industrial-flex projects and warehouse projects experienced a slight increase in vacancy over the last quarter. Vacant sublease space increased dramatically, to 987,082 square feet from 618,165 square feet the previous quarter. Currently there are 4,559,050 square feet of industrial buildings under construction, having had a total of 8 buildings delivered to the market totaling 616,142 square feet during Q3 2016.
The Denver retail market did not experience much change in the third quarter compared to the previous quarter. There was positive absorption of 414,201 square feet from a positive 528,879 square feet in the second quarter 2016. Vacancy rates remained steady at 4.7% quarter-over-quarter.
TCN Worldwide's State of the Market: Western Edition, 3rd Quarter 2016 Prepared by Hugh F. Kelly, PhD, CRE, Consulting Economist to TCN Worldwide In this edition: –National and Macroeconomic Overview –Regional Conditions in the Western States –Commercial Property Investment Trends