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					                     Calgary, Alberta
                     Te n a n t ’ s G u i d e        North American Markets                                       T h i r d Q u a r t e r 2 0 11




Overview                                                                  Major Transactions
The downtown vacancy rate continued to decrease as year to date           Tenant/Buyer                            Size                 Type              Lease/Sale
absorption reached 1.5 MSF. With 519,309 SF of absorption in the          Talisman Energy                         640,000              Expansion         Lease
third quarter, this marks yet another period of substantial take up.      Talisman Energy                         118,000              Expansion         Lease
                                                                          Veresen Inc.*                           45,000               Expansion         Sublease
A significant vacancy decrease occurred in the AA segment where           EOG Resources                           30,000               Expansion         Lease
vacancy was 12.5% a year ago and 1.9% today. Clearly this exhibits
                                                                          Trican Well Services                    28,000               Expansion         Lease
a greater appetite for quality buildingsmost of which has come from
                                                                          Bantrel                                 24,000               Expansion         Lease
large tenants arming themselves with expansion space for the
                                                                          Sasoil*                                 21,000               Relocation        Sublease
future.
                                                                          North West Upgrading* 22,000                                 Expansion         Sublease
All tenants are realizing difficulties in finding suitable spaces;        Scovan Engineering*                     12,000               Relocation        Sublease
however, large, multi-floor users who haven't secured space are
finding it especially difficult. Larger contiguous blocks of space are    * Transactions in which CresaPartners was involved
increasingly rare, and options that do exist typically involve
significant improvement costs.

No new developments have been announced. If absorption
                                                                          Vacancy Rate
continues on its path, the likelihood of a new development is                                              Q1 2011              Q2 2011          Q3 2011

imminent. If absorption falls, it puts the likelihood of a new building
                                                                           20%




                                                                                                                   15.7%
in question.




                                                                                                                                         14.0%
                                                                                                                                       13.0%

                                                                                                                                                      12.1%
                                                                                                                                     11.5%
                                                                           15%




                                                                                                                                                    11.1%
With a market this hot for this long, it seems unreasonable to think it




                                                                                                                                                   10.2%
                                                                                                                            10.1%




                                                                                                                                                                   9.5%
                                                                                                                           9.4%




                                                                                                                                                                 8.6%
will last indefinitely. Recent macro events of uncertainty may find                                        8.1%
                                                                                     6.8%




                                                                           10%




                                                                                                                                                              6.7%
their way into the local economy and cause decision makers to press                                     5.8%
                                                                                                     3.8%
the pause button.
                                                                                              2.9%
                                                                                            1.9%




                                                                            5%



Market Trends                                                               0%
                                                                                    Class AA         Class A      Class B           Class C       Beltline      SW
                                                                                      CBD             CBD          CBD               CBD                      Beltline
  Ÿ Vacancy in the class AA/A market is down to 3.02% from 4.63%
    during the first quarter. The class B and C markets are
    decreasing in vacancy as well with vacancy of 9.4% and 13.0%
    respectively.
  Ÿ Rates continue to rise in class AA/A product, and good quality
    premises are increasingly hard to find.                               Average Rental Rates
  Ÿ Overall absorption for the second quarter of 2011 for the class       CBD                            Q1 2011                    Q2 2011             Q3 2011
    AA/A market was 440,046 SF, class B was 52,821 SF, and class C        Class   AA Office              $49.29                     $52.70              $54.99
    was negative 26,442 SF.                                               Class   A Office               $43.99                     $42.20              $43.77
                                                                          Class   B Office               $30.92                     $32.41              $33.76
                                                                          Class   C                      $26.50                     $26.71              $28.82
Tenant's Perspective
Tenants with pending space requirements should be aware of today's
market forces that are against them. Growing landlord confidence
and reduced options are big issues. That said, Calgary's boom to
bust history has made fools of most forecasters, so conservatism is
advised.
There is great uncertainty on the world scene, and Calgary will not       Prepared By CresaPartners
be immune to it. The real question is to what extent is will be           Suite 510, 250 – 5 Street SW
affected. Tenants and their advisors will need to watch for signs of      Calgary, Alberta T2P 0R4, Canada
market shifts if and when they occur.                                     403.571.8080      www.cresapartners.com

				
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posted:10/16/2011
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