Vacancy Rates Declining in Calgary Industrial Market

Oct 4, 2010 by

A recent article in the Calgary Herald cites a Colliers International survey that indicates that Calgary industrial vacancies are falling.  They are quoting  market vacancy has dropped to 4.82% per cent in the third quarter of this year from a high of 5.89% at the beginning of the year.  If the numbers are true that indicates the net leasing (the difference between what has been vacated and what has been leased) of over 1,230,500 square feet of space since the begining of the year, or what we call positive absorption.  Very good news generally for the market.  The article goes on to quote the CB Richard Ellis absorption number being 1,700,000 square feet year to date so two of the large brokerage houses are agreeing that things are heading in the right direction.  However, I wouldn’t necessarily agree with the comment by Colliers that it is a good time to speculatively build.  I recently did a survey for user looking at 30,000 to 50,000 square feet and there are 24 different options in the market.  Some looking at rental rates as low as $4.00 per square foot.  Granted they were not in new shiny buildings but they were none the less legitimate options for this user who is in the transportation and warehousing business.  Not that I want to promote caution in the minds of the developers, Lord knows we have seen enough caution for a lifetime over the last 18 months.   I do think we need to see a little more strengthening in the market vacancy and rental rate wise before we go sticking more shovels in the ground.

See Calgary Herald Article