Latest news with #officevacancy
Yahoo
13-07-2025
- Business
- Yahoo
Edmonton Downtown office vacancy finally breaks, but it might not last
For the first time in years, the office vacancy rate in Downtown Edmonton has dipped below 20 per cent. 'It sure is nice to see something that doesn't start with a two,' said CBRE Edmonton's managing director, Mark Anderson. With office, industrial, and residential reports released recently from commercial real estate services company CBRE and from the Realtors Association of Edmonton (RAE), respectively, key indicators for Edmonton's real estate market show some promise. As housing starts augment the city's housing stock and office vacancy comes down, the various markets sit in a comfortable position after the second quarter, but the fate of the rest of the year remains unclear as the housing market cools off in the summer and U.S. tariffs fuel uncertainty. Although average housing prices are still up year-over-year in the greater Edmonton area, the price increases over 2024 have come down compared with previous months this year. RAE board chairwoman Darlene Reid said the market is edging toward more stability. 'We're starting to shift more into a balanced market. I would say we're still on the cusp of a seller's market, but at the bottom. Like, we're a few points away from switching over to this balanced market,' said Reid. In June, sales were up 1.2 per cent over last year with residential average prices also climbing nearly six per cent. However, signs of a balanced market come from year-over-year comparisons in housing inventory, with a 15 per cent increase at the end of June over 2024. The rising inventory and the cooling activity will be good news for buyers, said Reid. 'As a buyer, you want a little more choice, and you don't want to have the pressure of having to make offers that are conditionless to compete. Now, people can take a little more time do their due diligence,' she said. Reid said a decline in market activity often happens during summer as people take vacations and have kids at home, leaving them less time to sell or look for property. The increase in inventory can be attributed to an ongoing home building frenzy in the city. Housing starts are up more than 22 per cent from last year. With 88,000 square feet of positive absorption, Edmonton's Downtown office vacancy has dipped to 19.3 per cent. The positive change was aided by a recent Canadian Mental Health Association Centre lease on 102 Avenue that helped eat up a significant amount of vacant inventory. 'We've been bouncing around at about 20 to 21 per cent vacant for a little while. So it's nice to see that we finally crest a little bit below that,' said Anderson. While one big lease helped with the quarter's absorption, Anderson also highlighted office conversions as contributing to the decrease in vacancy, which he expects to continue going forward. With many of the city's top office towers like Edmonton Tower, Stantec, and Enbridge filling up, Anderson noted that a few 'C' class buildings with high vacancy continue to be a drag on the market as a whole. 'There's a lot of buildings that are kind of in that bucket, which we would kind of deem to be functionally obsolete,' said Anderson. 'It's unfortunate that they skew our statistics as much as they do, because the reality is, if you are a company that's looking for space, you're generally not going to be even considering these as options.' As the flight to quality office space persists, Anderson said those older spaces over time will likely be sold or redeveloped. Despite the strong quarter, Anderson warned that the core is still expecting to finish the year on a negative absorption note that will likely push vacancy back into the 20 per cent range. 'This will not be a surprise,' he said. Anderson said CBRE has been tracking 'shadow vacancies' Downtown, which are spaces that are still under a lease but are actually vacant. He said as these businesses sign new leases toward the end of the year, many will be downsizing their office capacity to unload the unused space. 'Everything else is quite strong. It's just that there's a couple of these really big tenants that are going to rationalize some of the underutilized office space they've been sitting on for the last 10 years. And unfortunately for us, that means that the vacancy rate might pop up back up into the 20s (per cent).' According to Anderson, the second quarter of 2025 was the first time the Edmonton area had negative absorption in the industrial market for some time, but he said it's nothing to be concerned about. In all, net absorption for industrial space in the quarter was down nearly 282,000 square feet. 'It doesn't take a lot to see why that's that's the case. There's a lot of tariff uncertainty still when it comes to the way that Canada interacts with our biggest trade partner just south of the border,' said Anderson. 'Those are the folks that are producing the widgets that go across the border, and so they're the ones most impacted by that.' As a 'decidedly' industrial town, Anderson said uncertainty around the tariffs has an outsized effect on the city's industrial market. Still, with a vacancy rate below three per cent and an availability rate of 5.2 per cent, he said the city is maintaining an active market and is not far from balanced. Given the size of industrial lots, just a few vacant spaces — like those currently empty near Nisku and Leduc — can skew the numbers, he added. 'It's just these larger-bay industrial properties that are having a more challenging time finding tenants to occupy their space. Small and mid-sized industrial companies — they're in a very tight market right now.' The canary in the coal mine for the market, said Anderson, is the smaller-bay industrial centres, and those remain strong. One such example was the Tuesday announcement from Van Houte Coffee Services, which recently opened a brand new 26,000-square-foot office and distribution space in Edmonton that will help the company serve western Canada. zdelaney@ 'Great time to be a landlord': many renters have no plans to buy homes Edmonton City Centre Mall ordered into receivership Bookmark our website and support our journalism: Don't miss the news you need to know — add and to your bookmarks and sign up for our newsletters here. You can also support our journalism by becoming a digital subscriber. Subscribers gain unlimited access to The Edmonton Journal, Edmonton Sun, National Post and 13 other Canadian news sites. Support us by subscribing today: The Edmonton Journal | The Edmonton Sun.
CTV News
04-07-2025
- Business
- CTV News
Downtown office vacancy hits 30 per cent in Waterloo Region
Downtown Kitchener is seen from City Hall on Thursday, March 23, 2017. Downtown office space is not hard to find in Waterloo Region. A new study from CBRE Canada found the national average sat at 20 percent. On the local level, London reported the highest rate of office vacancy at 31.4 per cent, followed by Calgary at 30.7 per cent, and Waterloo Region rounded out the top three at 30 per cent. The report said the national average held firm for the last year and a half, indicating the vacancy rate has plateaued. However, the authors suggest economic uncertainty could delay a bounce back. While the report did not break down the vacancy rate for each city within Waterloo Region, officials are aware of the problem. 'What the City of Kitchener has done is invested in some of our startups,' said Kitchener Councillor Stephanie Stretch. 'Through Communitech and through the University of Waterloo's incubator, [the city is] seeing a large number of startups, which should translate into more office space being used downtown.' Stretch said making downtown Kitchener an attractive place to work is a priority. 'We're working on a lot of some of those really basic things like safety and security, so that we're able to make our downtown core great,' she said. According to the CBRE report, office space construction has stalled at a 20-year low.
CTV News
02-07-2025
- Business
- CTV News
Ottawa's downtown office vacancy rate at 15 per cent through the spring
Ottawa's office vacancy rate improved slightly in the spring, with a new report suggesting there is demand for mid to large-sized office space in the core and in Kanata. CBRE Canada's second-quarter Canada Office Figures report shows Ottawa's vacancy rate dropped from 12.7 per cent in the January-March period to 12.5 per cent in the April-June period. 'Uncertainty regarding the economic landscape continued to obfuscate occupier decision making, although demand still exists for mid to large-sized space, as observed in the core and in Kanata,' the report says. The vacancy rate in downtown Ottawa was 15 per cent in the second quarter, while the office vacancy rate in the suburbs was 10.5 per cent. Toronto's downtown vacancy rate was 18.5 per cent in the spring, while Montreal's downtown vacancy rate was 18.6 per cent. CBRE Canada says 'sizeable deals' were reported at 160 Elgin Street in the spring, with the Royal College of Physicians taking 62,000 sq. ft. of space and Telesat occupying 28,000 sq. ft. of space. According to the report, there was 'notable activity within the submarket' in the spring, including the sale of a full vacant building on Solandt Road to the Manitoba Metis Foundation for potential owner occupancy and Mitel sublisting 33,000 sq. ft. of space on Innovation Drive. CBRE Canada says industrial construction 'has hit a peak' in Ottawa, with Amazon starting construction on their third distribution facility. That will add a proposed 3.1 million sq. ft. to Ottawa's future industrial inventory. 'While trade negotiations have resulted in some short-term supply and increased uncertainty, many deals are still being completed or remain in the pipeline,' CBRE said. The industrial vacancy rate in Ottawa was 2.2 per cent in the spring.
News.com.au
24-05-2025
- Business
- News.com.au
Warning as Melbourne's CBD car parks face financial pressure
Melbourne's CBD car parks are under siege as government levies, work from home and close to 1 million square metres of empty office space put them under growing financial pressure. There are now warnings growing numbers of carparking complexes will be sold off, or even converted into data centres to support the city's growing computing needs as operators search for ways to keep them profitable. New research from Ray White's commercial arm shows the average $64.43 daily rate for a car park in the CBD is now cheaper than it was more than a decade ago, with the figure at $65 in 2013. It is the only major capital to have recorded a reduction in parking costs in the 12 years covered by the research, which also shows operators are also now offering nation-leading early bird discounts of 62.9 per cent in a bid to lure commuters back into the city. It comes as Property Council data shows office vacancy rates sit at a national high of 18 per cent, while hospitality magnate Justin Hemmes has revealed plans to turn a recently sold city council carpark into an entertainment hotspot. Ray White head of research Vanessa Rader said carparking was a key indicator for the health of a city's office market and 'Melbourne is looking pretty bad'. 'I wouldn't be surprised if the city's vacancy rate was more than 18 per cent,' Ms Rader said. 'And for a market that is a bit over 5 million square metres of space, that's about 1 million square metres of empty space.' The analyst said while more car park operators would probably consider selling, they might struggle. 'I don't think they will necessarily transact,' she said. 'The levies are high, the occupancy is low and so are the parking rates, and you have to pay land tax. Who will buy that?' However, alternative uses, such as transforming them into data centres to boost digital security and computing power in the CBD, could become more feasible. JLL head of capital markets in Victoria Josh Rutman handled the recent sale of the City of Melbourne's 34-60 Little Collins St complex to Justin Hemmes Merivale Group and said carpark ownership had become far more challenging as a result of congestion levies. This year the state government has applied a levy on all individual carparking spaces of $1750 across Melbourne's CBD and its immediate surrounds. A secondary catchment faces fees of $1240, with this region to be expanded next year. 'The appeal of them has been that it's low-maintenance and easy to do investment, but costs have changed dramatically and the demand has shifted,' Mr Rutman said. 'So the demand for carpark investments has changed, as it's not viewed in the same light it used to be, particularly with the levies on inner city and CBD carparks.' However, the commercial property agent added that they were also typically in strategic locations that could suit other developments. 'That's what we saw with Little Collins St, a great range of interest from hospitality groups and developers who saw value in that location,' Mr Rutman said. 'But not so much in it as a carpark.' While he didn't believe carparks would immediately disappear, he did note operators looking at buying them today would be pricing their budget for them based on the new, lower, demand levels — and heightened costs. With city planners prioritising bike lanes, a nearly completed metro tunnel about to boost rail access to parts of the city and its fringes, Mr Rutman said it was possible Melbourne could head down more of a New York path — where most residents did not use a car day to day. Colliers director Matt Stagg has specialised in CBD and city fringe car park sales for more than two decades and said the market had been polarised since the Covid pandemic. 'Collins Street, Flinders Street and Spring Street have performed well,' Mr Stagg said. 'But car parks in secondary locations have not.' The agent added that weekday demand now peaked on Tuesdays, Wednesdays and Thursdays — but Monday and Friday volumes remained soft. He said institutional landlords and councils were increasingly viewing city car parks as non-core assets, and many were likely to be sold off in the months ahead. 'Yes, I think you'll see more councils and landlords divest car parks over the next 12 to 24 months,' Mr Stagg said. 'Increased land tax and increased car park levies are eroding the net income.' He said many of Melbourne's car parks sat on highly valuable land parcels and were being eyed for development. However, the agent added that tradespeople, essential workers, and commuters from outer suburbs who couldn't rely on public transport continued to drive demand in key locations, but the days of car parks as cash cows were fading. 'I think if new car parks are going to be built, it'll be in the outer suburbs near train stations,' he said. 'Closer to the city, we're going to see many of them redeveloped.' Mr Stagg said individual car spaces in the CBD, especially in premium apartment buildings or strata offices, were still changing hands for anywhere between $50,000 and $100,000, with off-market sales in top-tier locations occasionally pushing as high as $150,000 per bay.
Daily Mail
21-05-2025
- Business
- Daily Mail
Once-booming city offloads office tower at 80% discount amid urban decline as woke policies backfire
The West Coast city of Portland, Oregon, is being forced to slash the sale price of one of its biggest office buildings after it became overrun with homeless people. Portland, known for its liberal politics, has seen its downtown suffer after a failed attempt at drug decriminalization. The city's office vacancy rate was 35 percent in the first three months of the year, the worst of the top 25 central business districts in the country, according to real estate firm Colliers. Now one of the most telling signs of its downtown decline is the sale of its U.S. Bancorp Tower at a list price of 80 percent less than its previous valuation, The Wall Street Journal reports. The tower, known locally as Big Pink because of its rose tinted stone and windows, is more than half empty. The recent exit of a high profile client laid bare the desperate state of the building and its surrounding area. The technology publisher Digital Trends filed a lease-termination lawsuit claiming its staff were unsafe as the building had been taken over by the homeless population of downtown Portland. The publisher claimed in its lawsuit that the building had 'vagrants sleeping in hallways of vacant office floors... starting fires in stairwells, smoking fentanyl and defecating in common areas.' The building became a 'cesspool of criminal activity and vandalism,' they alleged. Digital Trends follows the exit of the building's namesake U.S. Bancorp, which pulled most of its employees out last year after more than a century in Portland. The 42-story tower is up for sale for $70 million, 80 percent less than its owners -Unico Properties of Seattle and a fund managed by UBS - paid for it in 2015. However, despite the steep discount, even distressed property investors are avoiding Big Pink. 'I don't see a way to get it into the green in the next five to seven years,' one such investor, Jordan Menashe, told the Journal. Big Pink has suffered more than other office buildings in the city as it is located next to a public plaza that became an epicenter of drug use and sales. However, the building's decline is emblematic of the rest of Portland's downtown which, like other cities such as San Francisco, has descended into a doom loop since the pandemic. Big firms cutting back on office space has hurt local businesses who rely on workers' footfall. As they too pull back, the homeless population has expanded, damaging the area's reputation and safety further. Major businesses such as Unitus Community Credit Union and Wells Fargo have both exited Portland in recent years, and others such as Adobe have announced plans to leave. The loss of property-tax collections from the declining value of its downtown offices is putting the rest of Portland's budget under pressure. Last year Oregon was forced to end the state's decriminalized drug laws after overdose rates soared. Portland's new mayor Keith Wilson is also considered to be more pro-business and his district attorney, Nathan Vasquez, tougher on crime. Wilson has offered permits and support for a bridge into Big Pink from a nearby parking garage that would allow workers to get into the building without having to go into the dangerous surrounding streets. 'Right now we're largely focused on retention,' Raihana Ansary, deputy chief of staff to Mayor Wilson, told the Journal.
