Calgary CRE deals hit four-year high

Investment in Calgary’s commercial real estate market rose 5% year-over-year to hit $3.3 billion in 2017 following a strong fourth quarter which added almost $1.1 billion.

The number of CRE deals for the whole year was 539, with 162 in the fourth quarter; that’s a rise of 30% year-over-year and the highest level for four years; a report from the Altus Group reveals.

Offices contributed the largest capital flow in CRE for 2017, although it was down $830.8 million from 2016.

Industrial had its fourth strongest year on record with $667.3 million invested, just $20 million short of the annual record set in 2008.

There was strong growth in residential land investment with 79 transactions, up 39%, totaling $490 million and nearly double the 2016 total investment. The ICI land sector posted its third strongest year to date, 45% off the 2008 record.

The upward surge is not expected to continue through this year as Altus expects investment volume to be flat in 2018 as investor sentiment suggests cap rates have flattened.

However, it will still be strong year for the market.

“With overall deal velocity on such an uptick, not only from developers and institutional investors, but from the owner/user and local markets, confidence in the Calgary commercial real estate market appears to be building, setting the stage for a strong start in 2018,” noted Paul Richter, Director, Data Solutions at Altus Group.

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