Q2 2023 Calgary Office Market Report
Deal activity remained steady as a number of anticipated transactions have been completed or are near completion. Overall vacancy end the quarter at 29.5 percent which indicates limited activity since the first quarter, but any of the positive absorption during the second quarter has been offset with the removal of nearly 500,000 square feet from overall inventory. Class AA and A vacancies went up slightly to 15.6 percent and 36.2 percent respectively. The Class B and C sectors continue tofall to 40.4 percent and 38.6 percent respectively. Net rental rates for Class AA headlease space range between mid $20’s to low $30’s depending on the asset with inducements (leasehold allowances, landlord’s work,free rent etc.).
Net rental rates for Class A headleases range from mid to high teenswith inducements to “buy” the rate down. However, with the high vacancy in the Class B and C markets, aggressive deals continue to be available. We anticipate dealactivity will pick up later this year as companies with looming expiry dates solidify theirdecisions for new space or to stay and renew.
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