Calgary News Winter 2011
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CALGARY NEWS WINTER 2011 Page 4 - President’s Report| Page 6 - Best of Intentions | Page 8 - Who’s Who in the Zoo | Page 10 - In Pursuit of Higher Education Conventional Wisdom Misses the Mark Calgary’s Offi ce Market has Evolved Provenance® Woven Wood Shades add a warm, rich dimension to any room, whether they’re hanging flat in the fully lowered position or raised, creating even, overlapping folds. Provenance shades Sandy McNair are created from natural woods, reeds, bamboo and grasses and will age beautifully in your home. hen conventional wisdom is applied to Calgary’s Woffi ce market it is held that Calgary dramatically swings from boom to bust, and does so with greater amplitude and frequency than most any other major market. But is this view still valid? The 1979-83 boom in new offi ce space construction in Calgary is unprecedented and has not been repeated since then anywhere in Canada on a percentage of existing inventory or total area added in such a short time frame. Between 1979 and 1983, 23.9 million square feet of offi ce space was built, more than doubling the inventory in only fi ve years. Since then there have been several anticipated and actual www.fitzflooring.com smaller boom-bust cycles to Cal- www.fitzflooring.com gary’s offi ce market, as recorded in this chart. FLOORING Calgary I Canmore I Invermere I Cranbrook BOMA Calgary News 1 And with 70 per cent of the inventory clustered in a tight downtown market, Calgary’s office inventory is younger and more concentrated Fully integrated BOMA Calgary News BOMA Calgary News is a co-publication of than anywhere else in Canada and beyond. BOMA Calgary and Business in Calgary. tenant solutions Business in Calgary 1025, 101 - 6 Ave. SW, Calgary, AB T2P 3P4 However, there is a strong case to be made that Calgary’s office market has Tel: 403.264.3270 • Fax: 403.264.3276 fundamentally changed, and is far more stable than ever before. Here are some Email: [email protected] reasons why: Web: www.businessincalgary.com Mining and Technology – While Calgary’s business community continues BOMA Calgary 120, 4954 Richard Road SW, Calgary, AB T3E 6L1 to be focused on the energy sector, the approach has shifted away from boom-bust Email: [email protected] • Web: www.boma.ca exploration cycles to the use of dramatic, new, proven and evolving technology to Tel: 403.237.0559 • Fax: 403.266.5876 “mine” the energy. The risks are real but no longer binary. The issue today for most new projects is the extent of the success, not the starker options of total failure or CHAIR giant victory often associated with the energy market of the past. Victoria Gibbs, Design Group Staffing MEMBERS Sponsorship – Each of the 25 largest office space occupants in Calgary are Blair Carbert, Stones Carbert Waite LLP very large firms with strong balance sheets. Often global in scale, many have sov- needed to generate the targeted return threshold? Certainly Miles Durrie, Calgary Herald ereign wealth fund and/or institutional support. These sponsors live in the current more risk review meetings, and perhaps a delay in a subse- Carol Lewis, Calgary Herald market, but do take the longer view. quent phase, but not likely the behaviours associated with a Dana Burns, Calgary Herald bust. The cycle has become much longer and smoother. Jay de Nance, Fairfield Commercial Real Estate Roger Hanks, Skyline Roofing Longer Wave Length – Most often, these new energy “mines” are massive Lia Robinson, BOMA Calgary capital projects with multiple decade lives. Phased over many years, these multi- Global Expertise – Calgary has become a global cen- Jesse Buhler, Colliers International billion-dollar projects are supported by demand and pricing forecasts that reach tre for the people, technologies and capital needed to drive out decades. What happens when the spot price falls below the long-term price the energy sector forward. This expertise is recognized and Executive applied to projects across Alberta and across the planet. The CHAIR internationalization of Calgary has added additional stability Peter MacHardy, GWL Realty Advisors to the sector and to Calgary. CHAIR-ELECT Don Fairgrieve-Park, Bentall Kennedy (Canada) LP SECRETARY TREASURER Market Size – The existing inventory now exceeds 62 million Chris Howard, Avison Young Real Estate square feet of office space. Each additional building has a smaller PAST-CHAIR impact on the overall marketplace. While plunging demand and WE HAVE A STRONG NATIONAL Guy Priddle, UrbanStar Capital the resulting run-up in sublet space is a real concern, it is exces- PRESIDENT & CSO sive, poorly-timed new supply that more often disrupts office PRESENCE TO HELP SERVE THE William G. R. Partridge, CAE, BOMA Calgary markets. Given Calgary’s larger size, it will take more than a DIVERSE NEEDS OF OUR TENANTS Directors single development error to materially impact the market. Michael Kehoe, Fairfield Commercial Real Estate Fred Edwards, Servpro Cleaning Newer – In a globally competitive marketplace for the very Bill Bird, WAM Development Group best skills, people and teams, Calgary’s inventory of office Steve Weston, Brookfield Properties space is attractive. In fact, 22 per cent of Calgary’s inventory Ken Dixon, Oxford Properties Group Marjorie Cone, H & R Property Management Ltd. is less than 10 years old. And with 70 per cent of the inventory Robert Brazzell, Altus Group clustered in a tight downtown market, Calgary’s office inven- Katherine Kowalchuk, Law Boutique tory is younger and more concentrated than anywhere else in Canada and beyond. Lastly, more than half of Calgary’s The Building Owners and Managers Association of Calgary publishes BOMA Calgary News quarterly. For advertising rates and information office inventory is Class A, with a higher proportion of excel- To view our portfolio of properties, visit: contact Business in Calgary. lent tenant covenants, than ever before. Publication of advertising should not be deemed as endorsement by BOMA Calgary. The publisher reserves the right in its sole and absolute discretion to reject any advertising at any time submitted by any party. Material contained herein does not necessarily reflect Calgary, it would seem, has grown up, with a new mindset the opinion of BOMA Calgary, its members or its staff. and risk profile that have evolved decidedly away from the www.dundeerealty.com © 2011 by BOMA Calgary. boom-bust cycles of the past toward a more stable business Printed in Canada. Or contact us at: environment. 403.212.7114 SANDY MCNAIR IS THE PRESIDENT OF ALTUS INSITE. SANDY AND THE ALTUS INSITE Ottawa Toronto Dartmouth Kitchener Saskatoon Regina Calgary TEAM LEVERAGE EXTENSIVE TEAM-WIDE EXPERIENCE AND MARKET INFORMATION TO Edmonton Burnaby Surrey New Westminster Yellowknife PROVIDE PERSPECTIVE TO CLIENTS IN CANADA’S COMMERCIAL REAL ESTATE, INVESTMENT, DEVELOPMENT AND LEASING COMMUNITIES. 2 BOMA Calgary News BOMA Calgary News 3 And with 70 per cent of the inventory clustered in a tight downtown market, Calgary’s office inventory is younger and more concentrated Fully integrated BOMA Calgary News BOMA Calgary News is a co-publication of than anywhere else in Canada and beyond. BOMA Calgary and Business in Calgary. tenant solutions Business in Calgary 1025, 101 - 6 Ave. SW, Calgary, AB T2P 3P4 However, there is a strong case to be made that Calgary’s office market has Tel: 403.264.3270 • Fax: 403.264.3276 fundamentally changed, and is far more stable than ever before. Here are some Email: [email protected] reasons why: Web: www.businessincalgary.com Mining and Technology – While Calgary’s business community continues BOMA Calgary 120, 4954 Richard Road SW, Calgary, AB T3E 6L1 to be focused on the energy sector, the approach has shifted away from boom-bust Email: [email protected] • Web: www.boma.ca exploration cycles to the use of dramatic, new, proven and evolving technology to Tel: 403.237.0559 • Fax: 403.266.5876 “mine” the energy. The risks are real but no longer binary. The issue today for most new projects is the extent of the success, not the starker options of total failure or CHAIR giant victory often associated with the energy market of the past. Victoria Gibbs, Design Group Staffing MEMBERS Sponsorship – Each of the 25 largest office space occupants in Calgary are Blair Carbert, Stones Carbert Waite LLP very large firms with strong balance sheets. Often global in scale, many have sov- needed to generate the targeted return threshold? Certainly Miles Durrie, Calgary Herald ereign wealth fund and/or institutional support. These sponsors live in the current more risk review meetings, and perhaps a delay in a subse- Carol Lewis, Calgary Herald market, but do take the longer view. quent phase, but not likely the behaviours associated with a Dana Burns, Calgary Herald bust. The cycle has become much longer and smoother. Jay de Nance, Fairfield Commercial Real Estate Roger Hanks, Skyline Roofing Longer Wave Length – Most often, these new energy “mines” are massive Lia Robinson, BOMA Calgary capital projects with multiple decade lives. Phased over many years, these multi- Global Expertise – Calgary has become a global cen- Jesse Buhler, Colliers International billion-dollar projects are supported by demand and pricing forecasts that reach tre for the people, technologies and capital needed to drive out decades. What happens when the spot price falls below the long-term price the energy sector forward. This expertise is recognized and Executive applied to projects across Alberta and across the planet. The CHAIR internationalization of Calgary has added additional stability Peter MacHardy, GWL Realty Advisors to the sector and to Calgary. CHAIR-ELECT Don Fairgrieve-Park, Bentall Kennedy (Canada) LP SECRETARY TREASURER Market Size – The existing inventory now exceeds 62 million Chris Howard, Avison Young Real Estate square feet of office space.