If you’ve read any of our previous blog articles, you’ll know we like to post unique content that isn’t readily available in other places. For example, we have written recently about electric cars and how they pose a long term threat to Alberta’s economy. We have also written extensively about how Edmonton’s commercial real estate market fluctuates with the price of oil. Our most popular article was when we reported on 4 office buildings that sold for astonishing prices.
We typically write articles that can be read quickly so we often steer away from data-heavy posts. That said, we have had a few people ask us recently about the state of the industrial market in Edmonton so we’re dedicating an entire post to that topic.
It’s no surprise that our industrial market has been under pressure since oil prices started declining in 2014. Looking at the graphs below, asking rates per square foot have been declining over the past two years. As expected, the vacancy rate has also been climbing.
On average, industrial lease rates in Edmonton are $9.07 / square foot and the vacancy rate is 7.10%1. While the vacancy rate has risen over the past few years, it’s important to note where that stands in the context of other markets. Calgary has also had rising industrial vacancy rates, which depending on the sub-market currently ranges from 7.69% to 12.88%. Interestingly, the 10 year historical average for vacancy rate across the U.S. is 8.3%.
Anecdotally, we are still seeing a healthy amount of demand. The increased supply on the market means that tenants and buyers in the market have options to choose from, a far cry from 2013 – 2014 when we had sub 3% vacancy. Considering all the various pressures impacting Alberta’s economy, our industrial market has still held up quite well.
1This is a market wide average and does not segregate for sub-markets, size or quality of the building. For example, the market for free-standing industrial buildings with large land components will be different than the market for smaller industrial properties in multi-tenant properties.
Information has been obtained by sources deemed reliable but is not warranted to be so and may change without notice. Information contained herein is not intended to be real estate advice and may not form part of a future contract. Readers are strongly encouraged to obtain independent advice. Full disclaimer is available here.
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.
EdmontonCommercial.com offers expert analysis and research in a weekly blog along with resources for landlords, tenants, sellers and buyers in the market. Seeking to buy or lease? We track every property available for sale and for lease in Greater Edmonton. Get the latest news and check the latest listings—anytime.