While Albertans have become accustomed to reading negative headlines, this week we are purveyors of good news. Recent statistics show we have had a noticeable increase in year-over-year manufacturing sales, business incorporations and merchandise exports.
More specifically, manufacturing sales in Alberta increased 7.5% from December of 2015 to December of 2016. Entrepreneurs are also becoming more optimistic about Alberta’s economy as the number of businesses incorporated increased 13.8% in January compared to January of 2016. In total, 3,885 new businesses were incorporated in January alone. Merchandise exports (goods exported to international destinations) were also up 9.2% in December of 2016 compared to the same period last year. This is compared to Canadian exports which saw a 1.2% decline over the same time.
Provided we continue to see oil prices above $50 / barrel (WTI:$USD) we are optimistic that the commercial real estate market in Edmonton will recover alongside the rest of the economy. While we think the worst is behind us, it may still take time before we see prices rise. According to a report from TD Economics, “the vacancy rate [for industrial real estate in Edmonton] will likely show some improvement, but not enough to generate a firming in rents, which are expected to decline 4.3% annually in 2017-18.” It strikes us as somewhat narcissistic that TD thinks they can pinpoint the decline down to the decimal, but their data is likely built on complex model that produces this estimate. However they arrived at their prediction, anecdotally we have seen an uptick in activity across the board. We have recently completed deals and have offers on properties in Leduc, Nisku and Acheson, markets which have struggled over the past two years.
The increase in activity, coupled with year-over-year growth in key economic indicators, leads us to believe the worst is behind us.
Alberta Government, TD Economics
Chad GriffithsPartner, SIOR, CCIM
Chad is a partner with NAI Commercial Real Estate and focuses on the Greater Edmonton area. Chad entered the industry in 2004 and has completed over 400 commercial transactions with clients ranging from small, local companies to large institutional owners. Chad has been a top 15 producer with NAI Canada-wide since 2013.
Ryan BrownPartner, BCom, SIOR
Ryan is a partner with NAI Commercial Real Estate in Edmonton and is currently ranked nationally as one of NAI's top advisors. Having executed in excess of $100 Million worth of sales transactions and over 2 Million square feet of lease transactions, Ryan has developed a firm understanding of asset evaluation and an aptitude for building design, functionality, and long-term practicality.
Darcie is a licensed Commercial Real Estate Agent in the Province of Alberta with a focus on the Edmonton market and its surrounding areas. Darcie accomplishes custom solutions for her clients through her personable nature and results driven attitude. Darcie can help if you are looking to invest in commercial real estate or are looking for representation for a sale or lease transactions.
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