Calgary's downtown Class A office space now has only a 1.4 per cent vacancy rate, according to a report from Altus Insite, which believes lease rates and property prices are poised to increase.
In the second quarter of this year, two Class A buildings sold in Calgary's core for more than $100 million each and "there is strong demand for Class A office assets," Altus reports in its quarterly Street Smarts survey.
The two downtown office towers that sold, Calgary Place for $312 million and Trimac House for $100.9 million, were purchased for $544 per square foot and $423 per square foot, respectively.
Two new Class A office towers are proposed for downtown Calgary, Herald Block at 1.3 million square feet and the Eau Claire Tower, at 615,000 square feet, but there is no firm date for construction to begin, Altus said.
The downtown Class A action is in contrast to secondary markets in Alberta's largest city. The overall office vacancy rate for all of Calgary, including suburban markets, is 5.7 per cent. It spikes to 11.5 per cent in North Calgary and has risen to 9.7 per cent, up from 7.3 per cent a year ago, in the Beltline area.
