Edmonton Q3 2018
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Office Market Edmonton Q3 2018 Tenants on the Move The long-anticipated opening of Stantec Building on 104 Street and 102 Avenue. Tower will commence in the fourth quarter The growing tech company’s decision to of 2018, as Stantec is set to occupy select Edmonton for its North American 460,000 sf in Western Canada’s tallest expansion is another step forward for the building. The engineering and consulting city’s burgeoning tech industry. company will vacate a total of 378,000 sf In Commerce Place, beginning in the comprised of Government district class A Stantec began as a one- fourth quarter, the Government of space - 189,000 sf in Stantec Centre and Alberta is expanding their occupancy person company in 1954. 131,000 sf in the Devonian Building - and to 490,000 sf, growing by 70,000 sf on Now 1,500 Edmonton- 58,000 sf from Stantec 2 (now known as their existing 420,000 sf footprint. based employees will The Annex) in the Financial district. The net effect of all Stantec Tower’s tenant occupy 19 of 69 storeys in Rounding out 2018, PwC will be vacating movement on Edmonton’s downtown Western Canada's tallest 42,000 sf in TD tower and move into 51,000 market will be 91,000 sf of positive building. sf in the upper floors of Stantec Tower. DLA absorption. As a result from the recent Piper will also join the tenant list in the new construction of three new office towers tower and occupy 25,000 sf, while vacating within the past three years – Enbridge 24,000 sf in Scotia Place. Looking ahead to Centre, Edmonton Tower and Stantec 2019, Dentons will relocate approximately Tower – the resulting increases in vacancy 62,000 sf from Manulife Place into Stantec will essentially serve as the high-water Tower. mark going forward. For the foreseeable Elsewhere in the Financial district, UK future, there will not be any significant video game developer Improbable additions to the office inventory. With leased 12,000 sf in the historic Metals modest growth from office tenants, we Partnership. Performance. avisonyoung.com Edmonton Q3 2018 / Office Tenants on the Move (continued) Office Stats predict vacancy rates will gradually decline Calgary Trail, construction has begun over the next 24 months. However, there on EPC Southtrail Plaza with 56,000 sf of will be continued downward pressure on commercial space, including second floor rental rates for lower tier buildings. offices, available for pre-leasing. 15.6% TOTAL OFFICE Supporting the office market are numerous Office space in the mixed-use West Block MARKET VACANCY projects planned for downtown. These project will be ready for occupancy in 2019. include high-rise residential towers, hotels The project is experiencing high demand 14.1% (Q2 2018) and retail to meet the growing demand of with approximately 30,000 sf of office workers and residents downtown and the commitments. neighbourhood’s increased social interest. With more people living, working, getting On Whyte Avenue, Wexford Developments’ educated and socializing downtown than Raymond Block is nearing completion ever before, we expect continued, albeit with 22,000 sf of second floor office space tempered, positive momentum for the available for lease. In the nearby Plaza foreseeable future. 82, video game developer Beamdog 14.4% leased 11,000 sf of third floor office DOWNTOWN OFFICE Suburban markets are experiencing space. MARKET VACANCY the most construction activity since 2014 as several projects are expecting In the summerside district, the 60,000- 12.4% (Q2 2018) completion before the end of 2018. Similar sf HealthPointe Building in Edmonton to the downtown districts, the additions to Business Campus is complete and fully the office inventory are elevating vacancy leased. Forbes Place, in Ellerslie Industrial, is rates in the short term; however, the market expecting completion in November and has outlook expects to see a gradual decline as 14,000 sf of office space available. users relocate and expand into enhanced The Savona Centre in Sherwood Park is part spaces. of a three building development by Salvi 17.2% Group that is comprised of main floor retail In the south side district, the 29,000 sf SUBURBAN OFFICE DDC Professional Building will open in and 20,000 sf of fully leased second and MARKET VACANCY the fourth quarter of 2018 with 14,000 sf third floor office space. Positive absorption leased to Canadian Cancer Care. Along in Sherwood Park is again concentrated in 16.1% (Q2 2018) Calgary Trail, Faber Inc. fully occupies a the Broadmoor Place office park with newly constructed 7,500 sf three-story 36,000 sf absorbed this quarter and office building north of 58 Avenue. Also on 49,000 sf YTD. +106,000 Q3 ABSORPTION (SF) +126,000 (Q2 2018) Partnership. Performance. avisonyoung.com Gazing on any of Edmonton’s historic commercial buildings can lead one to imagine the sounds of horse-drawn carts rolling by. While many early developments have been lost with time, pieces of the city’s heritage live on in the bricks of century-old office buildings. Image courtesy of Peel's Prairie Provinces, a digital initiative of the University of Alberta Libraries Edmonton's Legacy Lives On Image courtesy of Peel's Prairie Provinces, a digital initiative of the University of Alberta Libraries Around the turn of the 20th century, north of Jasper Avenue between 102 Edmonton, a fledgling city of 5,000 and 109 Street as the area became the people, was only beginning to grow industrial hub of the city. Although the beyond its origins as a remote trading wartime economy spelled a sudden post. Since 1870, the Hudson’s Bay end to the period of booming real Company held reserve over much of estate, several of the commercial the land in present-day downtown and buildings erected a century ago still in the early 1900s, began selling parcels stand and in some cases, have been of land to developers looking to locate reimagined as modern office space in the city centre. The newly available while preserving their historical legacy. commercial land, combined with the completion of Edmonton’s first railway in 1903 that connected the city to Calgary and neighbouring Strathcona, set the conditions for a real estate development boom that would last The Town of Edmonton was until the First World War in 1914. established in 1894 and In the years leading up to World by 1905 was recognized War I, Edmonton’s population and as the provincial capital construction output rose dramatically. and commercial centre of Population grew from 5,000 to over 70,000 people in a 10-year span as Northern Alberta. the local economy flourished and Edmonton established itself as Alberta’s capital. In the early 1910s, at least two dozen warehouses were constructed Partnership. Performance. avisonyoung.com Edmonton Q3 2018 / Office Dorchester Building The office building at the intersection until the 1950s and the property was of 109 Street and 104 Avenue now later purchased and renamed by known as Dorchester Building was Dorchester Investments. Presently, the constructed in 1913 as an office and historic warehouse is boutique office storage facility for one of the city’s space with loft ceilings and a unique largest employers at the time, the brick and beam interior. There are International Harvester Company. The currently four units available for lease, company maintained its operations for a total of 7,800 sf. 1913 2018 Molson Brewery The Gothic-style brick brewery was the brewery and office were acquired by constructed in 1913 by entrepreneur and Molson who maintained its operation former Mayor of Strathcona, William Henry until 2007. Designated as Historical Sheppard. The building was designed by Resources, the buildings were protected German-born Bernard Barthel as a Germanic from demolition after closure and are now brew-castle specified by red brick, steel and the site of the Edmonton Brewery District, reinforced concrete. In 1924, Sheppard built a multi-use retail/office development an Edwardian-style brick office adjacent to successfully completed by First Capital the brewery and later sold the properties Realty and Sun Life. Leasing opportunities to Lethbridge brewer Fritz Sick. In 1958, are available for spaces up to 20,000 sf. 1913 2018 Ernest Brown Block Ernest Brown Block, completed in Jasper Avenue and now known as 1912, was one of the last commercial Brighton Block, is currently in the buildings erected during the pre- process of being restored by Primavera First World War construction boom. Development Group. Redevelopment One of Alberta’s most prominent efforts are focused on maintaining photographers, Ernest Brown, the building’s Edwardian-style brick established his photographic studio facade while adding three additional on the second floor with framing and floors of commercial space. Expecting enlarging studios in the basement. completion in 2019, Brighton Block will As an early example of a mixed-used offer modern office and retail spaces commercial property, the main floor overlooking the river valley. Leasing provided retail space while the third opportunities are available for up to 1912 2018 floor was apartment rentals. The 7,000 sf per unit, totalling over 36,000 building, located in the Quarters on sf of availability. LeMarchand Mansion René LeMarchand, an entrepreneur Mansion featured Edmonton’s first from France, arrived in Edmonton in elevator and exterior windows in every 1905 and entered into Edmonton’s suite. Following the Second World War, booming real estate market shortly some suites were converted to office thereafter. He sought to build the most space. Today, the fully redeveloped modern apartment building in Canada. office building hosts a variety of Inspired by French Beaux-Arts style commercial tenants attracted to its of architecture, the brick manor was uniquely historic features on the bank recognized as one of the finest and of Edmonton’s river valley.