Calgary office market under pressure

The commercial office market in Calgary continues to suffer from the downturn in the oil industry.

Colliers International says that energy firms are seeking tenants for office space with a record high of 2.6 million square feet unleased at the end of June, 52 per cent of the total downtown vacancy rate.

Sub-lease availability now outstrips direct landlord-tenant deals for the first time. Collier’s Joe Binfet told the Globe and Mail: “It tells you that energy companies are contracting, that they’re looking at their cost footprint and that they’re looking at space as a part of that equation.”

Including the energy sector’s vacancies, the level of unleased office space in Calgary increased 20 per cent in the second quarter to 12.75 per cent. Colliers estimates that by 2018 the vacancy rate could be 17.5 per cent.

Average rents for class A buildings fell by $2 in the second quarter to $26 per square foot. 
 

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