CALGARY, ALTA. — Positive absorption rates in Calgary have ended in Q4 2022, bookmarking one of the strongest leasing environments the city has seen in years.
According to Avison Young’s Calgary Office Market Report, Q4 2022 saw a negative 120,519 square feet of absorption recorded as gains were offset by energy tenants right-sizing their operations.
Suburban markets recorded a seventh straight quarter of positive activity and the overall office market had a positive absorption of 131,820 square feet throughout 2022, states the report.
The report notes fears of a recession were proven wrong after Canada’s economy experienced a “modestly positive Q4” but states industry experts predict a slow down for the entire commercial real estate sector in 2023 due to an “environment of fiscal restraint.”
“Given this, Calgary still appears to have the right fundamentals to perform well compared to other areas of the country. The strong environment for commodity prices is predicted to remain elevated for some time to come, creating a favourable environment for our economy,” reads the report.
“The strength of the city’s industrial, residential and land sectors will continue to bring investment and relocation to the market.”
By The Numbers:
- Overall vacancy rate is at 23.8 per cent, down 2.2 per cent since Q4 2021.
- Overall downtown vacancy rate is at 27.2 per cent, down 2.5 per cent since Q4 2021.
- Overall class AA vacancy rate is at 14.8 per cent, down 2.9 per cent since Q4 2021.
- Square feet of overall absorption for Q4 2022 was negative 120,519.
- Suburban square feet absorption was 95,543 in Q4.
- Overall absorption for 2022 was 131,820 square feet.
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