LETHBRIDGE, ALTA. — According to Avison Young, demand in Lethbridge, Alta. for quality office space is increasing along with the cost of construction.
“Inflation has driven up the cost of new construction and slowed investment in new development,” said Jeremy Roden, executive vice-president with Avison Young’s Lethbridge office. “We have seen this most prevalently in office-build-puts from shell space.”
According to Avison Young, the cost to build medical office suites from shell has risen from $100 four years ago to $200 per square foot today. The cost increase can be attributed to the pandemic office shift, changes in user mentalities and increased costs.
Construction and labour inflation has effectively doubled the cost of building office space since 2019, Avison Young writes in a news release.
While costs continue to climb, the vacancy rate in Lethbridge has dropped. It is currently at 11 per cent, a 2.3 per cent decrease over last year. B- and C-Class space make up the majority of the vacancies.
“These aged spaces may have to consider future redevelopment to attract and retain modern users.”
Avison Young also report optimism among investors as 36,676-square-feet of new office buildings are currently in the planning stages.
“Office users are prioritizing flexible, functional spaces that support their corporate culture and help retain staff, over the per-square-foot cost of the space. Successful landlords are taking this shift in mentality into account and are actively investing in their spaces,” said Ashley Soames, senior association with Avison Young, in the release.
“Lethbridge has seen positive net absorption and maintained steady lease rates with moderate increases. We are optimistic about what the future of office work will look like in our city.”
Recent Comments
comments for this post are closed