Large Bay Vacancy Dropping in Calgary Industrial Market

Oct 29, 2010 by

A recent article in the Calgary Herald noted that industrial vacancy was dropping faster in the larger bay market than in other segments.  We are certainly seeing an increase in activity and demand for options in the larger size range, being 50,000 square feet and greater.  One must keep in mind though that larger transactions like the recently completed by Smuckers in the former Forzani’s Group space for 191,000 square feet which is currently managed by Tonko makes a huge difference in vacancy versus smaller transactions.  We are currently tracking 32 options in the Calgary Industrial market that are 50,000 square feet and larger.  Click here for the report on the 50,000 square feet and greater options.  There remains numerous options.

The segement of the market that is finding the greatest challenges in is the 30,000 to 50,000 square foot range.  Including the 32 larger options there are 56 different alternatives in the market for a user in this size to consider.  This sentiment was reiterated at the recent Calgary Real Estate Forum where numerous landlords expessed a concern for the lack of activity in this segement.  Click here to obtain a report on 30,000 to 50,000 square foot options.

The bottom line is that the industrial vacancy rate in Calgary is dropping, probably at a greater pace than alot of experts predicted.  The question remains will the rental rates increase as a result of the increased demand.  So far we are not seeing that trend.  Larger deals are still being done in the $5.50 to $6.00 range depending on the quality of the space.