Edmonton and Calgary have a healthy rivalry, but it’s important to note how similar the two economies are. As we have written about extensively, Edmonton’s economy is positively correlated to the price of oil, so it should be of little surprise to see how similar Calgary’s market has responded to the collapse of oil prices in 2014 (and the subsequent recovery in 2018).
INDUSTRIAL LEASE RATES
|2018 (Q1): $9.63 psf||2018 (Q1): $9.16 psf|
|(down 4.5% year-over-year)||(down 5.5% year-over-year)|
INDUSTRIAL VACANCY RATES
|2018 (April): 5.9%||2018 (April): 5.5%|
|2017 (April): 7.0%||2017 (April): 7.9%|
OFFICE LEASE RATES
|2018 (Q1): $17.26 psf||2018 (Q1): $16.91 psf|
|(down 10.1% year-over-year)||(down 11.3% year-over-year)|
OFFICE VACANCY RATES
|2018 (April): 10.1%||2018 (April): 15.4%|
|2017 (April): 11.6%||2017 (April): 15.0%|
RETAIL LEASE RATES
|2018 (Q1): $22.28 psf||2018 (Q1): $26.13 psf|
|(up 5.0% year-over-year)||(up 4.4% year-over-year)|
RETAIL VACANCY RATES
|2018 (April): 3.8%||2018 (April): 2.8%|
|2017 (April): 3.6%||2017 (April): 2.6%|
As we wrote about last week, oil prices have increased 70% from the low 2017. We anticipate oil prices continuing to hover around $70 / barrel for the foreseeable future, which should (in theory) translate to increasing prices over the next twelve months. However, there is more supply coming onto the market, so an increase in prices will be tempered unless we see a corresponding rise in absorption1.
1The threats we see to positive absorption (and the economy in general) are as follows:
- Capital fleeing a politically unstable country;
- Property taxes rising 4x faster than the rate of inflation;
- Rapidly increasing minimum wage;
- Provincial carbon tax;
- Heavy crude discount (differential between WIT and Western Canadian Select).
Information has been obtained from sources deemed reliable but is not warranted to be so. View full disclaimer here.
Chad is a partner with NAI Commercial and has finished as a top 15 producer Canada-wide for the past three years. Chad owes his success largely to his commitment to uncompromising client representation, his active involvement in the real estate and business communities and a lifelong pursuit of continuous learning.
Ryan is a partner with NAI Commercial Real Estate in Edmonton. He is currently ranked nationally as one of NAI’s top advisors in Canada. Having completed his Bachelor of Commerce majoring in Finance, his eye for detail and great understanding of the numbers associated with any business decision makes him an asset to his clients while providing them the highest level of service.
Darcie began her career in Commercial Real Estate after completing her studies in Business Administration. Her personable nature coupled with a results-driven attitude is a perfect match for customers. Darcie understands the importance of delivering a custom, accountable solution for her clients.
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