Calgary’s downtown office vacancy rate hit an all-time high in the second quarter of 2021.
Commercial real estate firm Avison Young says the office tower vacancy rate in downtown Calgary now sits at 29.2 percent. That’s up from 28.9 percent in the first three months of 2021, and up from 25 percent in the second quarter of 2020.
Avison Young predicts there will be over 14 million square feet of vacant space in downtown Calgary by the end of 2021, resulting in a new peak high vacancy rate above 30 percent.
Calgary’s downtown has been severely impacted by years of low oil prices and a wave of mergers and acquisitions in the oil and gas sector.
Energy and related engineering companies occupied 57 percent of downtown Calgary in 2012. They now occupy just 32 percent of the city’s downtown core.
“I actually think things are getting better, but I don’t want to sugarcoat it: things are very bad,” Calgary Mayor Naheed Nenshi said Thursday.
“It’s not going to be a wing and a prayer and hope that oil comes back that’s going to fill the downtown core.”
The City of Calgary is trying to address the problem.
It has set aside $45 million in incentives to encourage private developers to convert empty office towers to residential space.
The city has dedicated $200 million towards its $1-billion Greater Downtown Plan and hopes to have other orders of government step up to fill the gap.
“We have a solid strategy in place,” Nenshi added. “It is the right strategy and it really is time for both the provincial and federal governments to come to the table and help fund it and make it real.
“There’s no more time for consultation. There’s no more time for discussion. It’s time to move forward.”
Avison Young says five of downtown Calgary’s 170 office buildings are currently completely empty. There are an additional seven properties with at least 75 percent vacancy.
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