POV Point of View 2 0 1 Q2 8 Downtown and Beltline Office Market Report Market OVERVIEW
Downtown Market Unless the function of an office as we know it is eliminated entirely, Table ONE any commercial office market will never reach full vacancy. BUILDING TRANSACTIONS Despite advances in technology, artificial intelligence, and work structure, the presence of the office appears to be a very secure Sale one. On the other hand, what is to stop a market from cratering to 441 - 5 Avenue SW Fourth & Fourth 30% vacancy? Or worse? Five years ago in Calgary, when office 622 - 5 Avenue SW IBM Corporate Campus occupancy neared 97.5%, you would have been hard pressed to find anyone who foresaw a vacancy rate near 25% in the 840 - 7 Avenue SW Joffre Place downtown core, but alas, here we are at the end of the second 1035 - 7 Avenue SW Lavalin Building quarter of 2018 with a vacancy rate of 24.95%, having edged up Alpine Building Life Plaza 0.5% higher from the previous quarter. Atrium I & II McFarlane Tower Keeping such a dramatic swing in mind, we find ourselves asking: Centennial Place Mount Royal Place where is the bottom of the market and how will we be certain Dominion Centre Northland Building when we find it? In the first quarter, vacancy declined by a mere 0.14%. This quarter, it increased by an almost equally slim margin. Eau Claire Place II Prospect Place With plenty of churn, but no meaningful growth, are the modest Eau Claire Tower Roslyn Building changes we have experienced thus far in 2018 an indication of F1RST Tower Scotia Centre what is in store for the rest of the year? Five Ten Fifth TransCanada PipeLines Tower What we can say for certain is that there are signs the market is Ford Tower reaching the bottom. Without question, most of the bleeding has stopped; near the end of 2017, the downtown and fringe markets started to plateau, and that trend has become more obvious given Demolition the absorption numbers in the first half of 2018. Now the toughest Barclay Square Sam Livingston Building two questions remain – where is “absolute zero” for vacancy, and what drives growth to start the steep climb out of the current environment? Re-Zoning/Proposed Re-Zoning One natural indicator of the low point of a market trough is the 630 - 4 Avenue SW Sierra Place presence of large commercial transactions, or in this case, office Barron Building Stephenson Building towers changing ownership. Over the past two years, the following Lougheed Building downtown and Beltline properties either changed hands (partially or fully), changed use (i.e. conversion to hotel or residential), or were put on the market for sale: Market OVERVIEW
These transactions represent activity from several separate B Class – the B Class continues to lead all classes with respect institutional holders of commercial real estate, including four to percentage vacancy, at 38.7%; it was the largest mover again entirely new entrants to the local market. It would seem to say that this quarter, climbing by 147,531 sf, or approximately two percent. some landlords are viewing now as the time to enter the market, The previously mentioned flight to quality continues to punish the which is an indication of opportunistic mindsets and differing B Class market segment. approaches with regards to the future of Calgary’s office market. C Class – the C Class saw a rise in vacancy of 52,905 sf, which Of the above list, five of these buildings (Sierra Place, 630 –4 is somewhat of a misnomer, given that 158,400 sf of space was Avenue SW, Stephenson Building, Barron Building, and Lougheed removed from C Class inventory after two buildings were re-zoned Building) were slated for redevelopment or re-zoning, while two from office use; C Class vacancy sits at 24.65%. other buildings (Sam Livingston Building and Barclay Square) were scheduled for demolition. Re-zoning and demolition are, in our opinion, one of the strongest indicators that select landlords Beltline and Fringe Markets believe the market has bottomed out and will stay there for a very Beltline – Progressively edging closer and closer to downtown’s long time, as buildings that were difficult to lease for their existing vacancy rate, the Beltline is now 22.63% vacant. Many tenants, landlords are being taken out of the vacancy equation entirely. who moved to the Beltline from downtown in the last leasing cycle, While some indicators are suggesting that Calgary is finally are relocating back to the downtown core given there is little, if reaching a vacancy peak, others paint somewhat of a different any, economic benefit to remaining in the Beltline. Given proposed story. Further consolidation amongst energy players, coupled with re-zoning for the Stephenson Building, as well as the demolition of a significant balance of ghost space still floating around downtown, the Sam Livingston Building and Barclay Square, there are clear indicates that there is enough outstanding space to potentially signs that landlords are concerned about the long-term vacancy step vacancy 1-3% higher from its current level. While signs may outlook in the Beltline. suggest we can see the bottom, it is hard to say if we are actually Kensington – One of the tightest markets in the city saw another there, especially with respect to lower class product. The bleeding quarter-to-quarter decline in vacancy. Kensington vacancy edged may have slowed, but that does not mean it has stopped entirely. down to 9.63% from 10.09% in the second quarter. Looking at each market segment, we can draw the following Inglewood – Inglewood took the mantle this quarter as the lowest conclusions from the second quarter of 2018: vacancy region in the city, as the vacancy rate plummeted over 5% AA Class – vacancy increased this quarter by a meager 23,918 to 8.14%. The drop can be credited to full leasing of the Dominion square feet, bringing AA Class vacancy to 16.8%, which is the Bridge building. lowest of any class. Demand in this market segment remains the Mission – Positioned near the Beltline, Mission still finds itself most active. somewhat a victim of downtown’s pull, and as such, saw its second A Class – vacancy increased by 143,432 sf, hiking A Class quarter vacancy figures climb to 16.04% from Q1’s 12.47%. As vacancy an additional percentage point to 26.7%. Many tenants one moves further south down 4th Street SW, occupancy climbs are upgrading to AA Class space and we expect this trend to as the demand for space gets higher. continue driving vacancy higher in the A Class. Market FORECAST
It is never easy, or for that matter overly exciting, to forecast the sake of the office market, if there is any operational overlap at a market when the market itself is flat. Big swings – whether positive corporate level – be it in auxiliary functions like accounting and or negative – create a lot of interest for both the invested and human resources, or core functions like geology and engineering casual reader. Be it the opportunity for arbitrage, or maybe the – personnel redundancies will open up desks. Those open desks basic human habit of chasing drama, activity breeds interest. On should hit our vacancy figures, given that they create a volume the other hand, when the numbers are not changing, the story of space, which, when coupled with existing pockets of “ghost” tends to require a nuanced approach. vacancy, equate to enough space to list independently. What may The current market in downtown Calgary is one of nuance. While come as a bit of a saving grace with respect to these particular void of vacancy swings and moving rates, there are several transactions, is that the asset overlaps between acquirer and the phenomena in the local market worth paying attention to. As acquired are for the most part, limited. mentioned in the Market Overview, acquisitions, dispositions, Should similar transactions follow, expect further consolidation of and re-zonings are tangible changes within the commercial office office space. Realistically, future acquisitions may involve more sector, but there are indirect events that will impact the long-term obvious staffing redundancies, which would further bring space market outlook as well. to market. Hypothetically, the opposite could happen if an entrant The first notable trend in Q2 2018 was consolidation within from outside of the province elected to acquire Western-Canadian Calgary’s local energy industry. Following the merger of Tervita based assets. and Newalta earlier in the quarter, Vermilion Energy proceeded to While office consolidation is a necessary outcome of M&A acquire Spartan Energy, and Baytex Energy acquired Raging River activity, we cannot ignore what is driving the change, as there is Exploration. These three transactions, all of which were similarly enthusiasm within Alberta’s energy industry as it pertains to oil- sized and of reasonable complexity, broke a long drought of weighted entities. New drilling activity in the Duvernay creates sizeable merger and acquisition activity in the city1. reason for optimism. Expanding oil sands operations should While the effects of these mergers are yet to fully unveil themselves, create project-based employment in downtown Calgary. Higher we can glean some information early in the process: oil prices allow for new drilling activity in several existing plays and give companies a financial buffer. The combined impact of these a) There is still room for additional consolidation in the energy activities should start to counter the impact of consolidation on industry, perhaps even on a scale well in excess of the above our office market. transactions; Looking outside of the energy industry, new activity in the city, b) Interest in Western Canadian assets appears to be primarily largely driven through new entrants into the technology and driven by local market participants, which is likely due cannabis sectors, will provide a positive – albeit smaller – bump to US and international entities having better investment to overall vacancy projections. Hard work from the City of Calgary opportunities abroad; and and Calgary Economic Development is starting to pay off, as they c) Mid-cap companies are looking to diversify or bolster their are successfully encouraging new entities to test Calgary for their asset bases. next development hub. Given the conclusions considered above, let us look at how energy Maybe – just maybe – the bottom is near. While this is a market industry consolidation may continue going forward and attempt to of nuance and we cannot say for sure that we have reached the forecast what impact the mergers may make over the back half bottom, from where we sit, the signs are starting to point towards a of 2018. plateau in vacancy and eventual turnaround. Come the beginning of 2019, we hope we can point to a new trend of concrete positive With each of the three abovementioned mergers, a locally absorption. operated entity purchased another local operated entity. For the
1 We acknowledge that Altagas purchased WGL Holdings at the start of 2018, but we do not expect the result of that transaction to impact Calgary’s local office market in a material way. Market FORECAST
Graph ONE FORECASTED VACANCY
500,000 30.00%
450,000
25.00% 400,000 Telus Sky
350,000 20.00% Tenant Market 300,000
250,000 15.00%
200,000
10.00% 150,000 f)
(s 100,000 y 5.00% ) or nt (% ve
50,000 y In nc w Ne 0 0.00% Vaca 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 Forecast Forecast Forecast Forecast Forecast 2018 2019 2020 2021 2022
New Inventory Historical Vacancy (%) Forecasted Vacancy (%) Table TWO Q2 2018 VACANCY SUMMARY
BUILDING CLASS TOTAL INVENTORY HEADLEASE SUBLEASE TOTAL (sf) (sf) (%) (sf) (%) (sf) (%) Downtown AA 15,960,873 1,056,839 6.62% 1,587,049 9.94% 2,643,888 16.56% A 17,451,204 3,210,478 18.40% 1,453,888 8.33% 4,664,366 26.73% AA/A 33,412,077 4,267,317 12.77% 3,040,937 9.10% 7,308,254 21.87% B 7,529,304 2,725,654 36.20% 188,706 2.51% 2,914,360 38.71% C 2,584,781 547,767 21.19% 89,308 3.46% 637,075 24.65% Total Downtown 43,526,162 7,540,738 17.32% 3,318,951 7.63% 10,859,689 24.95%
Beltline and Fringe Area Beltline 6,986,799 1,039,025 14.87% 542,384 7.76% 1,581,409 22.63% Kensington 604,702 52,336 8.65% 5,915 0.98% 58,251 9.63% Inglewood 461,985 28,174 6.10% 9,427 2.04% 37,601 8.14% Mission 917,600 147,185 16.04% 0 0.00% 147,185 16.04% Total Beltline & Fringe Area 8,971,086 1,266,720 14.12% 557,726 6.22% 1,824,446 20.34% Graph TWO Graph THREE SUBLEASE VACANCY INDEXSublease Vacancy Index COMPARATIVE VACANCYComparative Vacancy Rate Q2 2014 - Q2 2018
45.00% 80.00%
40.00% 70.00% 35.00% AA = 58.85% 60.00% 30.00%
50.00% 25.00%
40.00% 20.00%
A = 31.19% 15.00% 30.00%
10.00% 20.00% C = 14.02% 5.00% 10.00%
Vacancy % 0.00% B = 6.48% 0.00% Vacancy Rate Q2 2014 Q2 2015 Q2 2016 Q2 2017 Q2 2018
Class AA Class A Class B Class C Class AA Class A Class B Class C Table THREE LARGE BLOCKS OF AVAILABLE CONTIGUOUS SPACE, DOWNTOWN CALGARY
Buildings Type Area (sf) Building Type Area (sf) The Bow Sublease 321,077 F1RST TOWER Headlease 177,352 Brookfield Place - East Upcoming Sublease 320,869 Scotia Centre Headlease 163,341 Telus Sky Upcoming Headlease 286,172 BP Centre Headlease 134,796 Brookfield Place - East Headlease 265,000 Hanover Place Headlease 126,211 707 Fifth Headlease 264,400 Lavalin Centre Headlease 119,366 Penn West Plaza - East Sublease 196,539 The Edison Headlease 118,826 Gulf Canada Square Sublease 193,604 The Bow Sublease 116,165 Approximate Scale: 100 75 50 25 0 100 200 METERS
Prince’s
Island Centre Street Bridge Condo Estates Memorial Drive Cresa Alberta Rest. Suite 1400, 606 - 4 Street SW Condo Calgary, Alberta T2P 1T1 Condo tel: 403.571.8080 Princeton l & II Eau The Waterfront New DEVELOPMENTS Claire Future Bow River Y.M.C.A. P cresa.com Development Cond o Rest . DOWNTOWN Condo Condo Site 7 Eau Claire Downtown Rest . Market Helicopter Eau Claire Avenue S.W. R iverfront Avenue Bow River Landing Pad Future Calgary Chinatown Suites
Development Sheraton Condo Seniors Centre Le Caille Fav Claire Apt The P Rest . P on the Bow Bow Claire Apt Site Indian P Friendship Bowside Broadview TELUS Sky Building Millennium Tower P Condo P Joe Phillips P Manor Centre Hong Condo Condo Centre Kong Plaza 1 Chinese Landlord: Telus, Westbank 2 Avenue S.W. Daqing Avenue 2 Avenue S.E. Cultural Riverfront Avenue & Allied REIT Downtown / Beltline Drive LaCaille Centre Office Floors: 26 Rest. Livingston Eau Claire Park Eau Claire Manor P NG Office Area: 430,000 sf The Point Centennial Place Waikwan Lookout Place Centennial Future Tower Memorial on the Bow Shaw Eau Claire Place East Calgary West Manor China Town Ave. Floor Plate: 16,500 sf Place West Development Court Tower City Est. Completion: 2019 Devon Site Five Harvest Apt. Apt.Apt. Louise Bridge Centre Livingston Place Liberte Tower Plaza Percentage Leased: 36% P Prince’s Crossing P Sout h P P Eau Claire Barclay Mall Rest . Anchor Tenants: Telus ExecSuite 3 Avenue S.W. 3 Avenue S.E. The Riverfront Gov’t Harry of Hays Sonoma Eau Churchill North Livingston Pavillion 615 Eau Claire Place P Canada Place Claire City Opulence P Bldg. House P Estates 3rd Ave. P I II Westin 4P Retirement Shell Plaza Centre Brookfield Place Calgary - West Hotel BP Centre Jamieson Future Sun Life Plaza 2 Hotel Paci c P Regency Centre Riverfront P Asia Altius Place Centre Development Columbia United Summit Retail Internationa l First Pointe Landlord: Brookfield Properties Ne Apts McFarlane Bldg Apts Place Optima P Bldg Site Dragon City Street Tower Plaza P Floors: 41 Place West East Building Area: 1,000,000 sf 4 Avenue S.W. 4 Avenue S.E. Ave. Floor Plate: 27,500 sf 3 Street S.E. Macleod Trail 1 Street S.E. Est. Completion: n/a Canadian Phillips 555 Canada Delta Anchor Tenants: n/a Electric Centre Prince’s Island McDougall Bldg London Fourth & Northland Calgary Metropolitan Fifth Ave. Fifth Ave. P Substation Place P 4th Place Place II Place Place Place TransCanada Hotel Ave. House Fourth Centre P Centre Centre West East PipeLines James Short F1RST P P Tower Tower Baker Catholic 5 West Apt . Parkade Ubridge Fire 926 800 Chevron Calgary Hal l House School West East The Heritage 640 5th Hawthorn Hotel Aquitaine 520 Roslyn Stock College 5th F th 622 5th 5th Ave. Plaza P # 1 444 Place I P Board Place Ave. & Suites Bldg Building
Sundance Centre Street 5 Street S.W. 8 Street S.W. Ave. 7 Street S.W. Exchange Tower 3 Street S.W. 5th Ave.
Ave. S.W. Street 4 Ave. 2 Street S.W.
5 Avenue S.W. 5 Avenue S.E. Oxford Tower 1 Street S.W. 3 441 Prospect Northwest Rimbey Lavalin Chateau 6 Street S.W. Five Future 505 Future Development Diversi ed 639 5th 5 Ave. 333 Petroleum East Tower Travellers Landlord: Oxford Properties Hous e Centre Atrium P 715 - 5th Ave. Apt. Fifth & Fifth Ten 3rd Place III II Site P P Sta ng P Oxford Tower 5th Ave. Suncor Bldg. Floors: 47 I Ave. Fifth Development Club Calgary Bow Knox Bow Valley Square Energy The Bow Site Board of Worker’s Building Area: 1,200,000 sf United Centre Valley Barclay Mcleod 404 - Education Compensation Ave. Floor Plate: 26,000 sf O ce Place 736 - Paci c Bantrel Calgary Church Centrium College Condo Condo Edinburgh Atrium Place 6th 634 West Tower 9-6 P P Bradie House P 6th Ave. P IV I Budget Board Est. Completion: n/a Marquis Condo Future Retail Place II 800 Parkade Tower 6th Place Riverwest Bldg P Ave. Petex Bldg Anchor Tenants: n/a 6 Avenue S.W. 6 Avenue S.W. 2 6 Avenue S.E. Carber Tarjan Britannia Alpine 606 Bow Parkade Lougheed Block Court The Calgary Future For d West East Hanover Place Rocky Prov . Discovery Point Apt. Terrace Bldg Fourth Brook eld 119-6th Ave P Police Pointe P P AMEC Dev Bldg Tower Place Mountain Centre P Axxis Place Apartments Gardens Harley P Intact Place Remand Place Site Calgary P Place - East Court (Apt.) Hotchkiss Public Courts 6 1 y Librar Historic Court Gardens Rocky West Parallel Nexen Sierra Centre First Future Telus City Palliser West and East Plaza Pentland Northland Sandman 840 Life John J. of Appeal Telus TELUS Anglican Point Atrium 444 Mountain Centre Centre Canadian Bldg Cathedral P 1000 Place Place Hotel 7th Ave. Plaze P Place Bowlen Development P Bldg Sky P Police P 4
Bldg Seventh Barclay Mall Plaza Dominion Plaza Apts. Centre Site Bow Parkade H.Q. Landlord: Aspen Properties Floors: 29 each 7 Avenue S.W. LR T LR T LR T LRT LR T LR T LR T LR T LR T LR T 5 Building Area: 620,000 sf each Central O’Neil Garden Iveagh TD Canada Ave. Floor Plate: 23,500 sf Kerby O ce Alta Link Encor Scotia Towers Towers House City Trust Dome Devonian United P Place Nexen Guinness Elveden House 707 Fifth Hyatt Hotel Est. Completion: n/a Memorial Bldg. Apts. Apts. TV Tower Tower Gardens Centre Church P Telus Convention Century Tower House Place Watermark Holt The Centre Olympic Anchor Tenants: n/a Gardens Tower Renfrew Bay North City White Westmount Western 140 - Royal Plaza Lord 8th1010 1000 University of Calgary Thorburn The Core Home Lancaster Winner Dominion Oak Place Condo Ramada Union Barron The Core Hal l Nelson 8th Petro na Bldg. Shopping Shopping Bldg. 8th Ave Dept. Bank Bank Plaz a P Downtown Campus P Bldg. P Tower Genesis Manor Ave Retail o ce Building Inn Ave 9 Street S.W. Hotel 10 Street S.W. Bldg. Store Bldg.
8 Avenue S.W. Stephen Avenue Mall 8 Avenue S.E. Municipal Future Development Future Hollingsworth Kerris Eight Century North Plains Eighth Shaw Canaccord HSBC Alberta Bldg. First Canadian Centre - East Centre Site P Mixed Use Century Panarctic The Taylor First 635 Building National Retail Hotel Telus Convention Burns Retail P P West Park Place Midstream Plaza Avenue Bldg. Bldg. Bldg. Royal Retail Retail Calgary Arts Americana Building Western 8th Ave. Bank Building Marriott Centre 6 Development Garden Plaza Alberta Place Bank Public Commons Bldg. Canadian Place Hotel Stampede Place Bldg South Building Landlord: GWL Realty West Eighth Pontiac Advisors Avenue Bankers Hall Grain Edward’ s Stampede Pontiac Continental APS Centennial Bankers Glenbow City of Calgary Place West East Exchange The Edison Le Germain P Place P Floors: 27 Car Lot Metro Ford Apt. Bldg. P Parkade P P Court P O ce Electric Sub- South East Museu m Building Area: 698,000 sf station # 1 Ave. Floor Plate: 27,400 sf 9 Avenue S.W. 9 Avenue S.E . Est. Completion: n/a 4 5 Fording Anchor Tenants: n/a Place P Palliser Future Calgary Future Palliser 303 - Car Lot Penn West Plaza P P P Gulf Canada Square Dev. Tower Dev. One 9th Av e Metro Ford P P P Hotel West East Site Site Tower C.P.R. Centre C.P.R .
Fire City Centre Parkade Car Mount Palliser Eau Claire Market Redevelopment Emerald P P P Mountain Place 10 Place 10 P Hal l Future Retail South 7 Retail Wash Mgmt. 999 Equipment Retail Alberta Boot Co. West East Royal Development 8th St . P P P P P Coop Sprin t P Canada House P P Landlord: Harvard Site Developments 10 Avenue S.W. 10 Avenue S.E. Floors: 40 Macleod Trail 3 Street S.E. Retail/ Tenth 1 Street S.E. Building Area: 555,000 sf Sprung Kipling Apt. Lancore Rest . Avenue P 707 Bottle Rest. & MacCosham Carbon MEG Future The Alberta Ave. Floor Plate: 13,800 sf Astoria Mark on Tenth The Condo Centre 10 Butcher Block P P Self Annex P Vantage P Bldg. 10th Ave Depot Kipling Square Retail Block Bromley Square Copy Place Trade Atco House P P Hudson Dev. Site Brownstone Storage Cooperblok P O ce Demcor Centre Est. Completion: n/a Pointe Calgary Co-op Anchor Tenants: n/a Condos Sunrise P 902 GM Jo re Lewis 11th Paramount Mustard Retail 1015 Genco The Retail Clennan Mustard 134 - 11th Louis Ribtor I Atco 11 Ave. Building P Glenbow Retail Place Square 5/5 The Lofts Avenue Building Seed Braemar Ribtor II
5 Street S.W. 4th St. Square P P P S.W. Street 4 Place P Seed 6 Street S.W. Ave. S.E.
11 Street S.W. Retail Vintage I P 10 Street S.W. 7 Street S.W. Vintage II Bldg. Blk. 1 Street S.W. 8 Street S.W. 9 Street S.W. Building
2 Street S.W. Place Centre Street Ave.
1006 11t h The Paserium 11 Avenue S.W. 11 Avenue S.E.
Centur y Sport The Atco Fairmore Roberts P Future Stephenson Flooring 1111-11th P Atco Retail P Swap Atrium on 525 P 333 IBM O ce Carrington Centre I Bldg. Block 11th Ave. Development 301 - Bldg. Centre II Bike Shop 11th P -11th B Future Anticipated Completion Tric o Retail Site 11th Ave Alta P IBM s Development P Safeway Bldg. Tran Bldg Keynote P Future Dev. Site Lorraine Stella Nova Future Barnhart Foundation Site Future 2019 Pending Dhalsen P Dominion Block Parkside Citadel Sam 1122 4th Lacey Can-am Manhattan Condos Condos Dev. Genesis Xenex Livingston Bldg. IBM Development Apt. Place P Bldg Place West Castello St. S.W. Cour t Masoni c P Lofts P Condo Apt. Condos C O ce Bldg. Templ e Site 12 Avenue S.W. 12 Avenue S.E. LEGEND Plus 15 Connections Prince’s Island Proposed Plus 15 Connections
Centre Street Bridge Estates Condo One way Directions Memorial Drive Rest. Light Rail Transit Condo Railway Condo Building / Future Development Princeton l & II Eau The Waterfront 14 Number of Floors Claire Future Y.M.C.A. P Cresa Alberta Development Condo Rest. Condo Condo Site Eau Suite 1400, 606 - 4 Street SW Claire Downtown Rest. 4 Street N.E. Edmonton Trail Market Calgary, Alberta T2P 1T1 Helicopter Eau Claire Avenue S.W. Riverfront Avenue Bow River Landing Pad tel: 403.571.8080 Future Bow River Calgary Chinatown Memorial Drive Development Condo Seniors Centre Le Caille Fav Claire Apt The P Rest. P cresa.com on the Bow Bow Claire Apt Site Hotel Indian Sheraton
P Tower Friendship Bowside Broadview Building P Millennium Condo P Joe Phillips P Manor Centre Hong Condo Condo Centre Kong Plaza Chinese 2 Avenue S.W. Daqing Avenue 2 Avenue S.E. Cultural Riverfront Avenue Drive LaCaille Centre Rest. Livingston Eau Claire Park Eau Claire Manor P NG The Point Place Centennial Place Waikwan Lookout Centennial Future Tower Memorial on the Bow Shaw Eau Claire Place East Calgary West Manor China Town Place West Development Court Tower City Devon Site Five Harvest Apt. Apt.Apt. Louise Bridge Centre Livingston Place Liberte Tower Plaza Flyover ridge P Prince’s Crossing P South P P B Eau Claire Barclay Mall Rest. ExecSuite evin
3 Avenue S.W. 3 Avenue S.E. NewThe Riverfront DEVELOPMENTS4 Avenue ng Gov’t Harry Condo La of Hays Sonoma Eau Churchill Eau Claire Place North Livingston Pavillion 615 P Canada Bldg. BELTLINE Place Claire City Opulence P Old House P Estates 3rd Ave. P I II Westin P Retirement Shell Plaza Centre Hotel BP Bridge Centre Jamieson Future Sun Life Plaza P P Regency Hotel Riverfront United Altius Place Centre Development Columbia Summit International First Pointe Bookers Neff Apts McFarlane Retail Place P Bldg Centre Site Asia Dragon City Street
Apts Pacific Bldg Centre Langevin 744- Tower Plaza P West East 4th Ave. 4 Avenue S.W. 4 Avenue S.E. 3 Street S.E. Macleod Trail 1 Street S.E. Canadian Phillips Calgary Electric Prince’s Island Bldg 555 Northland Canada Fifth Avenue Fifth Ave. Delta Cecil Calgary Drop Centre London Fourth & Place II Metropolitan Hotel P Substation Place P 4th Place Place Place Place Hotel in Centre House Fourth Centre TransCanada Ave. P F1RST West East PipeLines James Short P McDougall P Tower Baker Catholic 5 West Apt. Tower Parkade Fire Place 10 - East Centre Chevron Hall House School Place West East The Heritage 808 622 Hawthorn Hotel Aquitaine 520 Roslyn Calgary Ubridge 1 640 5th 444 # 1 Landlord: Centron 926 5th Ave. Plaza Building Place I Stock P College P Board Sundance Place 5th Ave. 5th Ave. & Suites Bldg Centre Street 8 Street S.W. Ave. 5 Street S.W. Exchange Tower 7 Street S.W.
3 Street S.W.
5th Ave. 4 Street S.W. Street 4 2 Street S.W. P Developments Floors: 14 5 Avenue S.W. 5 Avenue S.E. 1 Street S.W. Building Area: 316,500 sf Simmons 441 Northwest Bldg Rimbey Chateau 6 Street S.W. Five Prospect Future Development Lavalin Diversified 639 5th 5 Ave. 505 333 Petroleum East Tower Travellers Ave. Floor Plate: 24,850 sf House Centre Atrium P Apt. Ave. Fifth & Fifth Ten 3rd Place III II Site P P Staffing 715 - 5th Ave. P Oxford Tower 5th Ave. Suncor Bldg. 5 Avenue S.E. I Fifth Club The Bow Calgary Bow Future Est. Completion: 2017 Development Site Knox Bow Valley Square Energy P Board of Worker’s United Centre Valley DevelopmentAnchor Tenants: n/a Barclay Mcleod Place 404 - Education Compensation Alberta Locker Office 736 - Pacific Bantrel 634 Calgary Church Centrium College Site Police Condo Condo Edinburgh Atrium Place 6th West Tower Service 9-6 P P 6th Bradie House P 6th Ave. P IV I Budget Board Marquis Condo Future Retail Place II 800 Parkade Tower P Place Association Bow River Riverwest Ave. Bldg Petex Building Site
Mewata Bridge 6 Avenue S.W. 6 Avenue S.W. 6 Avenue S.E. 6 Avenue S.E.
Britannia Carber Calgary Police Tarjan Future Alpine 606 Lougheed Block Rocky Court Discovery Pointe The Calgary Ford West East 119-6th Ave Hanover Place Prov. Police 4 Street S.E. Bow Parkade Service 5 Street S.E. Apt. AMEC Terrace Bldg Bldg Court Fourth Brookfield P Police Centre P P Pointe Axxis P Place Apartments P Dev Tower P Intact Place Place Mountain Remand P Place 10 - West Gardens of Appeal Place - East (Apt.) Parking Place Site Calgary Harley P Court 2 Landlord: Centron Hotchkiss Structur Courts Public Historic Court Rocky Library West Parallel Pentland Nexen Sierra Centre Gardens First Future Telus Telus City Developments Assoc. Plaza Northland Sandman 840 Life John J. of Appeal TELUS Anglican P Rick’s Calgary Firefighters BJ’s Point Atrium 444 Bldg Mountain Gym Centre 1000 Place Place Centre Plaza Place Bowlen Canadian Development P Bldg Sky Cathedral Police Floors: 14 P Hotel 7th Ave. P Seventh P P Auction P Hostel Barclay Mall
Plaza Apts. Dominion Bldg Plaza Centre Site Bow Parkade H.Q. Building Area: 300,000 sf P LRT LRT LRT LRT LRT LRT LRT LRT LRT LRT Ave. FloorLRT Plate: 23,3507 Avenuesf S.E. Central O’Neil Garden Iveagh TD Canada Est. Completion: n/a Kerby Office Alta Link Encor Scotia Tower Tower House 707 Fifth City Trust Dome Devonian United P P Place Nexen Guinness ElvedenHouse Hyatt Hotel Anchor Tenants: n/a Memorial Bldg. Apts. Apts. TV Tower Tower Gardens Centre Church P Telus Convention Tower House Place Holt Century Watermark The Centre Olympic Renfrew Gardens Tower Bay North City White Westmount Western 140 - Royal Plaza Lord 8th1010 1000 Thorburn The Core The Core Home Lancaster Winner Dominion Oak Place condo University of Calgary Ramada Union Barron Dept. Hall P East Village Nelson 8th Petrofina Bldg. Shopping Shopping Bldg. 8th Ave Bank Bank Plaza P P Bldg. P Tower Genesis Manor Ave Downtown Campus Retail office Building Store Inn Ave 9 Street S.W. Hotel Place 10 Street S.W. Bldg. Bldg. St. Louis
P Calgary Eagle Bldg Shaw Mewata 8 Avenue S.W. Stephen Avenue Mall 8 Avenue S.E. Municipal 8 Avenue S.E. Millenium Armory Stampede Station, Phase II Park Future Development Future Hollingsworth Gas Kerris Eight West Century The North Shaw Canaccord HSBC Alberta Bldg.3 Orange Centre Site P Century First 635 Plains Building National Hotel Landlord:Hillier Artis REIT Retail P P Mixed Use Park Place Panarctic Eighth Bldg. Bldg. Bldg. Royal Retail Retail Retail Telus Convention Calgary Epcor Burns Lofts Americana Taylor 8th Ave. Midstream Plaza Bank Building Marriott P Development Garden Plaza Alberta Place Western Avenue Bank CIBC Centre Public Bldg. Floors: 19 Building Hotel Center for Canadian Place Bldg Tower South Building Murdoch Stampede Place Eighth Building Area: 315,400 sf Pontiac West Manor Avenue BankersHall Grain the Performing Edward’s P Stampede Pontiac Continental APS Centennial Bankers Glenbow Ave. CentreFloor Plate: 22,600 sf City of Calgary Place East Exchange The Edison Le Germain P Place P King Car Lot Metro Ford Apt. Bldg. P Parkade P P West Court P Arts of Hope Office Electric Sub- South East Museum Est. Completion:Edward n/aCommisionaires station # 1 Anchor Tenants:Hotel n/a 9 Avenue S.W. 9 Avenue S.W. 9 Avenue S.E. 9 Avenue S.E. Fording Penn West Plaza Place P 6 Palliser Future Calgary Future Palliser 303 - P Carstar Sundog Place Intergulf Car Lot Canada Staples P P P Gulf Square West East Dev. Tower Dev. One 9th Ave Future Development Site Cidex Metro Ford P P P Hotel Site Site Tower C.P.R. 2 1 Centre C.P.R.
Future Koryo Community United Car Fire City Centre Parkade Mount Keynote 4 Bank of Emerald P P P Mountain Development Plaza Natural Technologies P Hall Future Retail Place 10 Place 10 Palliser P Montreal Retail Wash Mgmt. 999 Equipment P Retail P Alberta Boot Co. P Royal P South 4 Landlord: Triovest Realty Foods Bldg Development 8th St. West East P P
Coop Sprint Site Canada House P Data Centre Site P Floors: 18
10 Avenue S.W. 10 Avenue S.W. 10 Avenue S.E. Building Area: 340,000 sf Future Development Site Macleod Trail 3 Street S.E. 1 Street S.E. Ave. Floor Plate: 20,900 sf Smith- Vistek Retail/ Tenth Kipling 4 et S.W. 14 GE Bldg Sprung 707 Bottle Apt. Carbon MEG Alberta 409 10th Royal Bank bilt Lancor Mark on Rest. Avenue P Centre 10 Rest. & P P MacCosham Future The Condo Printing Astoria Annex Self Est. Completion: n/a Lighting P Hats P P P Bldg. The 10th Ave Depot Kipling Square Butcher Block Retail Block Bromley Square P Trade Ave. Stre Vantage Copy Place Brownstone Data Centre Atco Tenth House P P Hudson Dev. Sit Storage Centre Cooperblok P Office Demcor Centre Pointe Anchor Tenants: n/a Calgary Co-op P Condos GM Sunrise Lewis Paramount Future Retail 902 Joffre 11th Avenue Mustard Square 1015 Genco The Buildin Retail Clennan Mustard 134 - 11th Louis Ribtor I Ribtor II Pilkington Abugov The Development Crabtree Retail Atco 11 Ave. Building P Glenbow Retail Place 5/5 The Lofts Place g Square Seed Braemar
P P P P 5 Street S.W. 4th St. Place P Seed Biscuit 4 Street S.W. Street 4 Kaspar Retail 6 Street S.W. Ave. S.E. P P 13 Street S.W. 12 Street S.W. 11 Street S.W. Vintage I P 10 Street S.W. Building 7 Street S.W. Vintage II Bldg. Blk. Coyotes 1 Street S.W. 8 Street S.W. Site House 9 Street S.W. Building 2 Street S.W. Centre Street Ave.
1006 11th The Paserium Block 11 Avenue S.W. 11 Avenue S.W. 5 11 Avenue S.E. 11 Avenue S.E.
Century Fairmore Sport Future Olympic Way S.E. Contempa Taymor Kai Connaught Stephenson The Atco Roberts P Future Office Sandstone Super Hamburg Flooring 1111-11th P Atco Retail P Swap Atrium on 525 P IBM P Carrington Centre I Bldg. 333 - 11th 301 - Development Grandel Drug Building Tower Centre Bldg. Centre II 11th Block 11th Ave. Dev. Site P Future 1108School - 4th Street SW Trico Bike Shop Retail Retail 11th Ave B 4 Arriva Bldg Mart P Alta Site IBM Development 5 Landlord: Genco P Safeway A TransBldg Keynote P Future Dev. Site Lorraine Future Stella Nova Future Barnhart Site Future P Royal P Dominion Parkside Citadel Sam 1122 4th Lacey Can-am Development The 1320 - Condos Condos Dev. Dhalsen Genesis Xenex Block Manhattan Future Park Plaza Grosvenor Place P West Castello Livingston Court Bldg. P IBM Development P Development Ravenwood 12th Ave Apt. Condo Apt. Foundation Place St. SW Masonic Lofts Floors: 13 House Condos Bldg Bldg. Temple C Office Dev. Site Site Site Building Area: 186,600 sf 12 Avenue S.W. 12 Avenue S.W. 12 Avenue S.E. Ave. Floor Plate: 15,40012 Avenue sf S.E. Retail Centre Husky Beltline Fountain Petrowest Sutton Place Marlhurst Exud 1201-5 St The Rest Retail Monaco P Connaught Public Stanford Renoir Stonehaven Memorial Park Twelve Retail Est. Completion: n/a Davenport Apt. P 5 Street S.E. Auto Apt. Plac S.W. Seville Beltline Gas Edinburgh House Court Court Plaza Came Suites Condo Library Hotel P P Condos School Apt. Helene Pool Esso Future P Anchor Tenants: n/a Sunalta House Retail Apt. Apts. Condo Calgary Apt. Central Arts P Sheldon Future Gas Development Calgary Exhibition Calgary Exhibition Calgary Exhibition Chumir Memorial Station Board of Future Dev. Development Brompton Cambridge Health Centre & Stampede Grounds & Stampede Grounds & Stampede Grounds The Adair Hull Park Apt. Site Huntsman Connaught Apt. Education Future Site Victoria 1228 - 1220 - The Apt. Apt. The Estate Gate Apt. Retail Retail P Prestige Apt. Estates Apt. Apt. Lancaster 13th 13th The Grapevine Gardens Apt. Club Colonel Park Development P Square Riomilan Apt. Condo Block 1328 Condo Radio Ave Ave Willmax Belcher Estates Site
1310 Ranchman’s 13 Avenue S.W. 13 Avenue S.W. 13 Avenue S.E. 13 Avenue S.E . Prada 999, Phase II City Congress 3 Future Camelot Executive Apt. Royal Horizo Van Canadian Centra Wexford Place Apt. Bernard Gas Manor The Cavaler Rivera Aldrin St. Elizabeth Apt. P Park 300 Park Apt. Apt. Colours Callebaut 6 Jardin Dev. Helden Stratto Lougheed Towers P Apt. Landlord: Triovest Realty Church Centre Point West House Arms Estates Montage Apt. Oak Condos Apt. Apt. House Church Blood Moxam Birkenshaw Apt Place P P Condo Condo Bldg. P Oak Apt. House Church Stampede Barclay Square Services Apt. Future P CalgaryFloors: Exhibition 13 Calgary Exhibition Calgary Exhibition Station Retai Development Nuera Kingston Sherman White-Wain- Yellowstone Paris Retail Retail Condo Retai No & StampedeBuilding Grounds Area: 224,000& Stampede sf Grounds & Stampede Grounds Union Landing Wesley Pallisades Site Square Manor St James Dorchester Square Best Western Oaks Apt. Beulieu Hill Apt. Rosewood Apt. Exeter Square Apt. Apt. 1224 - 1208 - Park Barclay Estates Apt. Bristol Apt. Chelesa Apt. Park & Ave. Floor Plate: 16,800 sf Chelsea Estates Place Place Apt. Office Hotel Condos United Apt. P P Scenic Polo Terrace Condo
A & W Estate Harcourt 14th Ave 1212 14th Ave View Condo Manor Gardens Apt. rendering Estates Condo Tower Church Apt. Place Playground Balmoral Est. Completion: n/a Plaza The Manor Findlay Anchor Tenants: n/a 14 Avenue S.W. 14 Avenue S.W. Trump 14 Avenue S.E. available 14 Avenue S.E. Retail Casablanca Lincoln St. Moritz Gardens Haultain Haworth Estates Mount Colonial Monticello 1209 Retail Apt. Whickam Full Evergreen Cypriana Apt. Apt. House Apt. Terra Weatherford St. Stephens Apt. Apt. Cozart Apt. Granada House Centro Towers Apt. Beltline Tower Apt. Apt. Church Richmond P Sasso Estates del Gospel Royal Apt. The Towers Apt. P Commissary P Apt.
Estates Office Park Apt. P Condo Arms Condo Apt. Condo Coronation Apt. P
Church The Condo Avenue Diplomat Apt. Sony
Sol Ashwood
Church Retail Place Darlington
JWC Block P M-tech Future P Office Hath Away P Place Stampede Calgary Exhibition Grandville Place Apts Development Westbury House Madison Roundup Retail Hardwood The Alberta Manor Court Laurekka Site & Stampede Grounds House Centennial House Apt. Dunhill Kingston Carlyle Ashbury Alex Wellington Apt. Brigden Premier Apt. Emerald Stone Kildare Apt. Apt. Apt. Condo Apt. Retail The MacKenzie Condo Vetro Centre Apt. Hamstead Grace Apt. Gas Apt. Apt. Apt. Estates Apt. Towers Apt. Apt. Condos Walker Retail Estates Apt. Westbow Apt. Norwood Block Place P Condo Apt. Church Condo Estates Gardens Retail Condos Apt. Apt. Chocolate Hargrave House LRT 15 Avenue S.W. 15 Avenue S.W. 15 Avenue S.E. Saddledome RS Parking Retail
Park Apt. Apt. Office Apt. Panorama Rose & Randel House Executive Apt. Alpha Trail S.E. 14 Street S.W. West Grace Apt. The Pillars Chateau Condo Sonesta Dorset Hallmark Royal White City Grace The Montana Apt. P P P Apt. Doral Retail White The Residences of House Coronation The Biltmor Pole View Manor Manor Apt. Court Apt. Falls The House Crown Manor P Square Estates Manor Plaza Arms Mansion Wild Rose Savoy Condo Centre Apt. Haven The Shylui Presbyterian Mount Royal Future Condo Conservatory Manor Apt. Manor Iona 15 Apt. Dev. Queenswood Condo P Superior Paint Office Car P P Church Funeral Building Rest. Scotiabank The Apt. Retail Rental Madiso Office / Home Park P Thompson Family National 1520 4th St. P Church Saddledome Retail Calgary Connaught Lucy Anne Retail Mt. Royal Retail The Courtyard Royal View Park Skygate Apt. P Office/Retail Block Retail 17 Avenue S.E. P Lawn Bowling Manor Apt. P Apt. Village Mt. Royal Apt. Apt. Phil’s Apt. Tower P Centre Apt. Apt. P Club Apt. Retail Office Stampede Office Calgary P Retail Agriculture Trail S.E. Blockbuster Stamp Corral 16 Avenue S.W. 16 Avenue S.W. Retail Retail Office Retail Economy Lane College Retail Glass Centre of Hillier Thomkins Park Main La Chaumiere Elbow River Casino Anticipated Completion Rockwood Devenish Bldg. il Funeral Vet Retail P Positive Retail Royal Square Retail Opus Reta Notre Dame Rouleauville Condon First etail Square Shell Street Apt. Home Living Wendy’s P Liquor R ATB Place Square Building McDonald’s Seventeen KFC Station ers CIBC 17 Avenue S.W. Retail Stratford Tow
Place Retail P Retail Pending P Calmar Retail Corral Trail S.E. Retail Future Shoppers Western Canada High Apts. Retail Drug Mart Bank Street Dev. Retail Retail of vereign hool 17 Avenue S.W. 1109 So Retail House Montreal High Sc Fire Hall Retail Apt Heights Huntington Toole 17 Ave P Apt Peete Tim Apt. Scotia Retail Centre Apt Bldg Retail Royal 1429 - Retail Manor Hortons Approximate Scale : Downtown / Beltline Condo Telus Bank 17 Calgary 17th Jewelers 100 75 50 25 0 100 200 METERS Ave Graph FOUR HISTORICAL DOWNTOWN OFFICE ABSORPTION
1,600
1,400
1,200
1,000
800
600
400
200
0
(200)
s sf) s (400) 000'
( (600) on ti
rp (800) so
Ab (1,000) Q2 2016 Q3 2016 Q4 2016 Q1 2017 Q2 2017 Q3 2017 Q4 2017 Q1 2018 Q2 2028 Class A/AA (451,937) 150,619 (386,460) 1,208,884 53,141 (353,265) 397,059 72,310 (167,350) Class B (282,819) (298,043) (172,839) 92,659 (338,892)(11,534)(25,370)(31,381)(147,531) Class C (88,211) 26,658 (18,156) 21,133 (26,730) (52,035) 45,431 21,461 (52,905) Quarterly Absorption All Classes (822,967) (120,766) (577,455) 1,322,676 (312,481)(416,834) 417,120 62,390 (367,786)
Average Net Rental Rates, All Classes Graph FIVE 2012 - 2017 YTD AVERAGE HEADLEASE NET RENTAL RATES PER SF, ALL CLASSES
$50.00
$45.00
$40.00
$35.00
$30.00
$25.00
$20.00
$15.00
$10.00
$5.00
$- Net Rate per sf 2013 2014 2015 2016 2017 2018 YTD
Class AA Net Rent Class A Net Rent Class B Net Rent Class C Net Rent
Graph SIX Average Operating Cost per sf AVERAGE OPERATING COSTS PER SF
$25
$20
$15
$10
$5
Cost per sf $0 2012 2013 2014 2015 2016 2017 2018 Class AA $19.21 $21.23 $22.60 $23.58 $23.67 $22.79 $22.74 Class A $17.60 $18.76 $20.25 $21.54 $21.51 $20.77 $20.06 Class B $15.43 $16.22 $18.44 $19.38 $18.96 $17.79 $16.86 Class C $14.60 $14.50 $16.07 $16.74 $16.94 $16.89 $16.29 CONTACT INFORMATION
OFFICE ADVISORY TEAM Donna Lea Banks Josh Hamill Gary Jones Adam Stewart 403.571.6018 403.539.0889 403.571.8081 403.590.5704 [email protected] [email protected] [email protected] [email protected]
Nicole Bennett Damon Harmon, CPA, CGA Josh Manerikar John Stones 403.258.1872 403.571.8221 403.571.8227 403.571.8086 [email protected] [email protected] [email protected] [email protected]
Jessica Downie Adam Hayes Doug Pilip Willem Thoma 403.537.2393 403.571.8222 403.571.8228 403.539.0894 [email protected] [email protected] [email protected] [email protected]
John Engbloom Dan Houston Kendra Pinder 403.571.6016 403.539.0893 403.571.8085 [email protected] [email protected] [email protected]
INDUSTRIAL ADVISORY TEAM Greg Albright David Miles Donna Lea Banks 403.571.8223 403.571.8088 403.571.6018 [email protected] [email protected] [email protected]
PROJECT MANAGEMENT ADVISORY TEAM Janet Hewitt Syeda Ahmad 403.571.6019 403.571.8082 [email protected] [email protected]
Cresa Cresa is an international corporate real estate advisory firm that exclusively represents tenants and specializes in the delivery of fully integrated 606 - 4 Street SW, Suite 1400 real estate services, including: Transaction Management, Project Management, Strategic Services, Corporate Solutions, Site Selection, Lease Calgary, AB T2P 1T1 Administration, Capital Markets, Mission Critical Solutions, Relocation Management, and Facilities Management. For more information, visit 403.571.8080 www.cresa.com/alberta
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