The property is located in the highly regarded Downtown Commercial Core, which serves as Calgary’s central business district. This vibrant district has a rich history, dating back to the establishment of the Canadian Pacific Railway. The presence of the railway shaped the city’s street and avenue layout, leading to the development of numerous sandstone buildings around the turn of the century. Many of these historic structures, now restored, contribute to the cultural and historical significance of Calgary’s business district, particularly along Stephen Avenue.
Calgary boasts the highest concentration of corporate headquarters in Western Canada, with approximately one in seven of Canada’s major corporate headquarters being based here. Given Calgary’s status as Canada’s energy capital, it’s no surprise that nearly three-quarters of these head offices are primarily involved in the energy sector. Additionally, headquarters supporting financial services, manufacturing, transportation, logistics, and retail sectors are also present in the city.
The Downtown Commercial Core offers a range of conveniences and amenities for residents and businesses alike. These include the Light Rail Transit System, the +15 pedestrian system, Olympic Plaza, the Devonian Gardens, TD Square, the Glenbow Museum, Vertigo Theatre, and the Jack Singer Concert Hall. These facilities enhance the overall appeal and functionality of the Downtown Commercial Core.
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About Real Estate Market
Downtown Calgary Development Incentive Program
Calgary’s downtown office vacancy rates are high, with approximately 14 million square feet of office space currently vacant, or around 32.6%. This is a concerning situation as it poses a risk to the city’s vibrancy, economic competitiveness, and fiscal sustainability.
To address this issue, the Calgary City Council has approved a $100 million investment in the Downtown Calgary Development Incentive Program. The program aims to remove at least six million square feet of office space from the market by offering grants for building owners to convert their underused or vacant office space to other uses such as residential.
Most buildings participating in the program are largely vacant, and building owners are not required to convert their entire building. However, a minimum conversion area of 40,000 square feet is required to be eligible for the program.
Building owners are also required to submit a ‘tenant relocation plan’ as part of their application if they have existing tenants that will be displaced through a building conversion.
The program offers a grant of $75 per square foot for office to residential conversions, up to a maximum of $10 million per property, under Administration approval. Requests exceeding $10 million require Council approval.
Current Calgary Downtown Office Stats:
- Current Vacancy is at 32.6%
- 130K square feet Net Absorption*
- There is 0 square feet under construction
- $12.55 is the net asking rent per square feet
- While there may be positive developments in the near future, a longer-term look reveals a continuous upward trend in vacancy rates and a concurrent decrease in net absorption, suggesting potential challenges for the real estate market in the future.
Net absorption refers to the net change in the amount of leased real estate space in a particular market over a given period of time. It is calculated by subtracting the amount of commercial real estate space vacated by tenants during the period from the amount of space leased by tenants during the same period. Positive net absorption is a good sign for the market as more space is being leased than is being vacated.