NAI Advent – Calgary Fall / Winter 2024 Market Report
Fall / Winter 2024 Calgary Commercial Real Estate Market Report
Industrial Sector
Industrial sector in Q2 and Q3 of 2024 is marked by cautious optimism, tempered by slowing activity in leasing and sales. The vacancy rate is 3.6%, up slightly from previous years. While speculative developments have influenced vacancies, demand from energy, logistics, and food storage industries continues to stabilize the market.
Downtown Office Spaces Adapt to Market Shifts
Calgary’s downtown office market reports a 27.9% vacancy rate, driven by the shift toward higher-quality AA and A-class properties. The City of Calgary’s Downtown Development Incentive Program, which facilitates office-to-residential conversions, is revitalizing this segment. An additional $52.5 million is being allocated to the program, offering developers $75 per square foot for eligible conversion projects.
Suburban Office Demand Surges
Suburban office spaces maintain strong momentum with vacancy rates dropping to 21.6%, which is driven by a demand from healthcare, education, and small-to-medium-sized tenants. Built-out show suites remain popular as tenants seek to avoid high construction costs and delays. The Beltline submarket is also experiencing a decrease in vacancy as it is emerging as a lifestyle destination for companies, combining residential proximity with commercial amenities.
Multi-Family Sector – Meeting Housing Demands Amid Population Surge
Calgary’s population surged to 1,491,900 as of April 1, 2024, marking a 4.9% annual growth and an increase of 69,000 residents, one of the largest in the city’s history. This boom fueled a 38% rise in new home construction during the first half of the year, with 11,178 new units launched, primarily in multi-unit housing developments. Calgary’s construction rate of 30 multi-family units per 10,000 residents highlights its focus on meeting the housing demand.
Calgary’s rental market remains strong with rental rents raising to $2.71 per square foot year-over-year.
The sales volume in Q3 saw a 13% decline. Office-to-residential conversions continue to play a critical role in addressing housing needs, with over 1,490 units and 226 hotel rooms that are currently under development.
For a detailed analysis and further insights on the current state of the Calgary Commercial Real Estate Market, download our full Fall / Winter 2024 Market Report Here: