CALGARY — Occupied office space in downtown Calgary has surpassed the level reached during the height of the real estate market in the second quarter of 2008.
A report by Colliers International says that occupied space has reached 33.7 million square feet in the first quarter of this year.
The overall vacancy rate declined one percentage point to 10.92 per cent which equated to about 393,000 square feet of positive absorption in the first three months of 2011.
“Much like in the latter half of 2010, oilsands companies continued to grow, with numerous new projects on the horizon creating additional office space requirements,” said the report. “Most of the activity can be attributed to the strong oil prices and resultant higher levels of activity in the sector.”
The recently-completed Eighth Avenue Place office tower absorbed 50,000 square feet last quarter. It is currently 88 per cent leased.
Development of the 49-storey, 1.1 million-square-foot EAP began totally on speculation with no leasing deals in place.
The new 49-storey Eighth Avenue Place is 88 per cent leased. Photograph by: Dean Bicknell, Calgary Herald
“With oil trading above $100 a barrel, leasing activity in the Calgary downtown office market is expected to remain strong throughout 2011,” said Colliers. “As more companies take on additional projects, the highly active oil sector will continue to recapture most of the jobs lost during the recessionary period.
“As employment increases, vacancy numbers will continue to decline. Good quality space is leasing quickly in the current market, as shown by the strong absorption numbers for the upper classes of office buildings ... Large contiguous blocks of vacancy in all classes of buildings have become short in supply.”
Meanwhile, the Calgary Board of Education has officially put the downtown Education Centre building up for sale. The building at 515 Macleod Trail S.E. has been put for sale by public tender with a minimum bid price of $40 million.
The five-storey building is close to 91,000 square feet on 1.08 hectares of land.
“The final bid and sale price will ultimately be determined by prevailing market conditions,” said the CBE.
The board said the Armengol sculptures, commonly known as the Family of Man statues, are not within the scope of the sale. The future of the sculptures will be determined by the City of Calgary, the sculpture’s owners.
The offer for sale by tender will expire May 4.
The CBE said the building will be vacant by June this year as staff moves into the new Education Centre at 1221 8th St. S.W.
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