Strong employment and migration are sustaining the local economy, new report says
While not immune to outside forces, Calgary’s office market will benefit from the fundamentals that impelled its strong 2022 performance, according to Avison Young.
“A robust job market and booming in-migration numbers are sustaining the local economy, and the consensus is the city is well poised to face any looming downturn,” Avison Young said in its latest market report.
“Legacy lease expiration will be a theme to follow in the downtown market in the coming 1-2 years as we wait to see what several large energy players decide to do with their space.”
And while significant downsizing will be a major threat to the office market, “a decision to remain downtown, or in the city altogether, is seen as a silver lining,” Avison Young said.
“On the upside, the office market is rebalancing and adjusting to new ways of working, and many are seeing the value of modernized and quality space in order to ensure future success. As a result, move-in ready and amenity rich space remains at a premium.”
Calgary’s overall office vacancy rate stood at 24.2% as of the first quarter, declining by 1.2% annually.
“Vacancy rates were mostly flat from Q4 2022 to Q1 2023, but the market is finding itself in an improved position to begin the new year compared to the beginning of 2022,” Avison Young said.
The market will also see the continuation of the momentum in leasing activity.
“There is opportunity that lies within times of uncertainty, and we believe Calgary is positioned well to take advantage of this through growing its population and employment base, diversifying its economy in the process,” Avison Young said.
