(Source: Globe and Mail)
Insiders say the cancellation, delay or cutback of oil sands projects has caused many tenants, particularly the large-scale engineering and oil sands servicing firms that have driven growth in the suburbs, to cut costs, and that has put large swaths of office space back on the market.
Calgary’s suburban office vacancy rate is now higher than that of other major cities, including Toronto and Vancouver, experts say. It has also risen faster than in some other places, the pros note.
While office deals have slowed in all of Calgary, brokers say the suburbs are feeling the crunch much more.
Office vacancy rates in Calgary’s suburbs will hit 10 per cent by the end of 2009, predicts a recent Colliers International report. That’s up from nearly 4.2 per cent in the first quarter of 2008 and 6.6 per cent in the fourth quarter of last year.
Downtown vacancy rates, meanwhile, have risen less drastically, from 3.3 per cent in the first quarter to 4.6 per cent in the fourth quarter of last year.
The reason? A combination of suburban overbuilding and tenant downsizing…
Read Eleanor Beaton’s full article “What oil sands giveth, oil sands taketh away” in the Globe and Mail (March 31, 2009).