Calgary Office Market Forecast Study: 2006-2025
Photos: Calgary Economic Development
Prepared For:
Date: May 23, 2006
urbanMetrics inc.
market, economic and strategic advisors
144-146 Front Street West, Suite 460
Toronto, ON M5J 2L7
urbanMetrics inc.
market, economic and strategic advisors
144-146 Front Street West, Suite 460
Toronto, ON, M5J 2L7
P: 416-351-8585 / 1-800-505-8755
F: 416-345-8586
www.urbanmetrics.ca
May 23, 2006
Mr. Adam Legge
Director of Research & Business Information
Calgary TELUS Convention Centre
731 1 Street SE
Calgary, Alberta T2G 2G9
Dear Mr. Legge:
Re: City of Calgary Market Space Forecasts, 2006-2025
urbanMetrics inc is pleased to provide Calgary Economic Development with our final report outlining the short-term and long-term office supply
and demand forecasts for Calgary covering the period 2006 to 2010, and 2011 to 2025 respectively.
Our forecasts are based on market insights gained directly through consultations with commercial real estate experts in Calgary, as well as a
comprehensive review of historic economic and real estate-specific data dating back to 1985. Our analysis of short term demand builds in a
series of industry forecasts related to economic growth (GDP), energy production, energy pricing and employment growth rates for specific
office-based occupational groups. Our long-term demand forecasts are based on current employment forecasts for Calgary Economic Region
prepared by the City of Calgary’s Corporate Economics Group and future estimates of office space utilization patterns on an employee per
square foot basis.
Based on our short term forecasts, we anticipate that by 2010 the Calgary office market will need (or “occupy”) approximately 49 to 50 million
square feet of space. Given the current state of the city’s market - characterised by record-low vacancy rates - we believe that the
development industry has responded with a reasonable and adequate supply of new space. With approximately 12.3 million of square feet of
space either under construction or in pre-leasing, the total office inventory could approach an estimated 57 million square feet by the end of
urbanMetrics inc.
market, economic and strategic advisors
2010. This amount of office space, relative to future market growth and demand will help to return Calgary to a more functional, well-balanced
commercial real estate market.
Over the longer term (2011-2025) our analysis suggests that Calgary has the physical land capacity to support the potential build-out of an
additional 35 to 47 million square feet of gross leaseable space on sites in the Downtown, Beltline and suburban areas, all of which
demonstrate policy, market and locational opportunity to support future office formation. This amount of space is in addition to the 12.3 million
square feet of space presently under consideration (i.e. under construction, or in pre-leasing stages). The range of potential office
development sites are, in our opinion, more than sufficient to ensure that Calgary’s growing labour market is supported by a healthy supply of
office space. Moreover, we recognize this quantum of development potential falls within areas that are well supported by existing
infrastructure, as well as proposed improvements and expansions to the city’s transit and transportation network.
In total, our market forecasts suggests that long term demand will drive the need for 60 to 67 million square feet of occupied, market-type
office space. This is an additional 2.7 to 9.4 million square feet above the existing inventory (45.1 million square feet), plus what is currently
under construction or pre leasing (12.3 million square feet). This level of space, in our opinion, would support our employment growth
forecasts which suggest that Calgary’s office market will need to accommodate an additional 72,000 new office workers in the city over the
2011-2025 forecast period.
On behalf of the study team, it has been a pleasure undertaking this assignment on behalf of Calgary Economic Development. We look
forward to discussing our results with you in more detail.
Yours truly,
urbanMetrics inc.
Peter Thoma, MCIP, RPP, PLE
Director
urbanMetrics inc.
market, economic and strategic advisors
Acknowledgements
urbanMetrics inc. and Calgary Economic Development would like to thank the following individuals for their time and contributions toward this
project. Over the course of our investigations their market knowledge and insights have been invaluable to our analysis of existing and future
office market conditions.
™
™
™
™
™
™
™
™
™
™
™
™
™
™
™
™
Alex Brough, Cushman, Wakefield & LePage
Andrew C. MacLachlan, JJ Barnicke Calgary Inc.
Bill Fowler, Calgary Real Estate Board
Brad Krizan, OPUS
Bryan A. Walsh, CB Richard Ellis Alberta Limited
Cody Clayton, Remington Development Corporation
David Weinkauf, Remington Development Corporation
Diane Hooper, City of Calgary
Donna Lea Banks, Cresa Partners
Doug MacDonald, City of Calgary
Dwight Jack, Brookfield Properties
Glen Radway, City of Calgary
Greg Brown, Brown & Associates Planning Group
Hannes Kovac, OPUS
Jeff Hyde, GWL Realty Advisors
Jim Francisco, City of Calgary
™
™
™
™
™
™
™
™
™
™
™
™
™
™
™
John L. Stevens, Imperial Oil
L.B. Pollock, City of Calgary
Linda Hackman, Canada Lands Company CLC Limited Calgary
Lynne Sterritt, Medallion Development Corporation
Matthias Tita, City of Calgary
Mike Gigliuk, CB Richard Ellis Alberta Limited
Nancy Malone, Canadian Association of Oilwell Drilling Contractors
Peter Mayerchak, Colliers International Calgary
Richard K. Parker, RKP Consulting
Richard White, Calgary Downtown Association
Ron Wrigley, Brown & Associates Planning Group
Shaun Anderson, Melcor Developments Limited
Stephen Rodrigues, Canadian Association of Petroleum Producers
William G. Partridge, BOMA Calgary
Xia Zhang, City of Calgary
Calgary Office Market Forecast, 2006-2025
Table of Contents
1
INTRODUCTION .............................................................................................................................................................................................. 1
1.1
1.2
1.3
1.4
1.5
1.6
2
BACKGROUND .............................................................................................................................................................................................1
ISSUES ........................................................................................................................................................................................................2
METHODOLOGY ...........................................................................................................................................................................................3
DATA SOURCES ...........................................................................................................................................................................................4
ASSUMPTIONS AND LIMITATIONS ...................................................................................................................................................................5
STUDY AREA ...............................................................................................................................................................................................6
OFFICE MARKET CONDITIONS .................................................................................................................................................................... 8
2.1
HISTORICAL TRENDS....................................................................................................................................................................................9
2.2
NORTH AMERICAN COMPARISONS ..............................................................................................................................................................11
2.3
ECONOMIC OUTLOOK .................................................................................................................................................................................12
2.3.1
Canada.............................................................................................................................................................................................12
2.3.2
Alberta ..............................................................................................................................................................................................12
2.3.3
Calgary .............................................................................................................................................................................................12
2.4
CALGARY’S COMPETITIVE ADVANTAGES .....................................................................................................................................................13
2.5
CALGARY’S ECONOMIC DRIVERS ................................................................................................................................................................13
3
SHORT-TERM OFFICE SPACE FORECAST FOR CALGARY, 2006-2010 ................................................................................................ 17
3.1
ECONOMETRICS METHOD...........................................................................................................................................................................18
3.2
EMPLOYMENT FORECAST METHOD .............................................................................................................................................................22
3.3
COMPARISON OF SHORT-TERM OFFICE DEMAND FORECASTS (ECONOMETRICS VS. EMPLOYMENT)...............................................................31
3.4
GEOGRAPHICAL ALLOCATION OF OFFICE DEMAND OVER THE SHORT TERM, 2006-2010...............................................................................32
3.4.1
Downtown ........................................................................................................................................................................................33
3.4.2
Beltline .............................................................................................................................................................................................33
3.4.3
Suburban..........................................................................................................................................................................................34
3.5
GEOGRAPHICAL ALLOCATION OF NEW OFFICE SUPPLY, 2006-2010 ............................................................................................................37
urbanMetrics inc.
market, economic and strategic advisors
Calgary Office Market Forecast, 2006-2025
3.6
3.7
4
LONG-TERM OFFICE DEMAND FORECAST, 2006-2025 .......................................................................................................................... 42
4.1
4.2
4.3
4.4
5
RECONCILIATION OF SHORT-TERM OFFICE SUPPLY AND DEMAND ................................................................................................................40
CONCLUSION .............................................................................................................................................................................................41
DOWNTOWN LONG-TERM DEMAND, 2006-2025..........................................................................................................................................44
BELTLINE LONG-TERM DEMAND, 2006-2025 ..............................................................................................................................................45
SUBURBAN LONG-TERM DEMAND, 2006-2025............................................................................................................................................45
CONCLUSIONS ...........................................................................................................................................................................................46
LONG-TERM OFFICE SUPPLY ANALYSIS, 2011-2025 ............................................................................................................................. 48
5.1
METHODOLOGY .........................................................................................................................................................................................48
5.2
LONG TERM SUPPLY POTENTIAL, 2011-2025 .............................................................................................................................................51
5.3
DOWNTOWN SUPPLY POTENTIAL, 2011-2025.............................................................................................................................................52
5.4
BELTLINE SUPPLY POTENTIAL, 2011-2025 .................................................................................................................................................53
5.5
SUBURBAN SUPPLY POTENTIAL, 2011-2025...............................................................................................................................................54
5.5.1
South Quadrant................................................................................................................................................................................55
5.5.2
Northwest Quadrant .........................................................................................................................................................................56
5.5.3
Northeast Quadrant..........................................................................................................................................................................57
5.6
RECONCILIATION OF LONG-TERM OFFICE SUPPLY AND DEMAND ..................................................................................................................59
6
IMPLICATIONS OF OFFICE FORECASTS .................................................................................................................................................. 60
6.1
BUILT FORM ..............................................................................................................................................................................................60
6.2
URBAN STRUCTURE ...................................................................................................................................................................................61
6.3
CALGARY’S URBAN BOUNDARY ..................................................................................................................................................................62
6.4
TRANSPORTATION INFRASTRUCTURE ..........................................................................................................................................................62
6.4.1
Roads & Highways...........................................................................................................................................................................62
6.4.2
Public Transit ...................................................................................................................................................................................63
6.5
DOWNTOWN PARKING ................................................................................................................................................................................64
7
STUDY CONCLUSIONS................................................................................................................................................................................ 66
urbanMetrics inc.
market, economic and strategic advisors
Calgary Office Market Forecast, 2006-2025
Executive Summary
The city of Calgary has captured the national spotlight once again as global
demand for energy pushes production and capital investment activity in the
energy sector to record levels. With renewed economic fortunes bestowed on
Alberta, and as the province prepares to become the single largest supplier
of oil in North America, the city of Calgary has emerged as one of the most
dynamic, high growth urban centres on this continent.
While other North American commercial real estate markets move steadily
along, the city of Calgary has experienced a massive space crunch over the
past four years with office vacancy rates plummeted from 14% in 2002 to
nearly 3.5% at the end of the Q4 2005. With no relief until at least 2007, the
city’s real estate market is eagerly awaiting arrival of new space to relieve the
pressure valve created by a burgeoning work-force, increasing business
activity and a lack of suitable space to support on-going economic growth.
This study has been prepared for Calgary Economic Development, and is
intended to address a series of important questions regarding the adequacy
of the city’s office inventory, and the ability of existing and future
developments to satisfy the level of growth anticipated, both in the short-term
(2010), and over the long-term (2025).
urbanMetrics inc.
market, economic and strategic advisors
Current Office Inventory:
45.1 million square feet
NW
3%
NE
9%
South
10%
Beltline
8%
Downtown
70%
i
Calgary Office Market Forecast, 2006-2025
Short-Term Supply Pipeline
Downtown and Beltline:
9.4 million square feet
State of the Market? Tight.
The city of Calgary has an office inventory of approximately 45 million square
feet. More than two thirds of this space is situated in its downtown. From an
office market perspective, Calgary currently boasts:
√
Rental rates for premium A Class space of $35+/sf
√
Overall vacancy rate approaching 3.5%, among the lowest in North
America
√
Virtually no availability for large space blocks greater than 5,000
square feet
√
A rapidly growing labour market, with a strong orientation toward
white collar employment
Under
Construc tion
20%
Rec ently
Announc ed
19%
Pre- Leasing
61%
Short-Term Supply Pipeline
Suburbs:
2.9 million square feet
Under
Construc tion
25%
Delivery of New Space? Relief is on the Way.
In light of tight market conditions the development industry has responded
with a series of new office projects. With construction underway or planned
on 38 sites across the city, developers are poised to deliver approximately
12.3 million square feet of new space by the end of 2010.
Pre- Leasing
75%
Short-Term Supply Pipeline:
12.3 million square feet
Is it Enough? Yes.
Our assessment of office employment indicates that there are currently
212,500 jobs found within “market”-type office buildings in excess of 20,000
square feet. This represents approximately one out of every three jobs in
Under
Construc tion
21%
Rec ently
Announc ed
15%
urbanMetrics inc.
market, economic and strategic advisors
Pre- Leasing
64%
ii
Calgary Office Market Forecast, 2006-2025
Calgary. Between 2006 and 2010 we have forecasted that the city of Calgary
will add an additional 25,000 jobs that require office space1.
Our demand forecasts suggest that Calgary will require a total office
inventory of approximately 49 million square feet to accommodate short-term
growth, an increase of about 4 million square feet over present levels.
To meet escalating market demand, and alleviate current market constraints,
the development industry is poised to add 12.3 million square feet of new
space, taking the city’s total office inventory to an estimated 57.5 million
square feet. Assuming that all projects move forward by 2010, this amount of
space would translate into a market vacancy rate approaching 15% in 2010.
This rate is consistent with 2002 and 2003 levels.
While our study assumes that all 38 office projects in the “pipeline” will
proceed, escalating construction costs and tight labour conditions in the
province will likely diminish the wherewithal of some developers to see their
projects delivered within the next five years. As such, we recognize that the
short-term demand forecasts prepared in this report represent an optimistic
view of five year development potential.
1
Excluding government buildings, health-care centres and other “non-market” office buildings and administrative buildings.
urbanMetrics inc.
market, economic and strategic advisors
iii
Calgary Office Market Forecast, 2006-2025
Is the Short-Term Supply in the Right Place? Yes.
Over the 2006-2010 period, our forecasts suggest that the volume of new
supply in the Downtown, Beltline and suburban markets will support our
market demand for space in these areas. Our 2010 forecasts suggest that
market demand will dictate a need for:
•
2.3 to 3.2 million square feet of new space Downtown,
•
355,000 to 435,000 square feet of new space in the Beltline, and
•
1.5 to 1.8 million square feet square feet in the Suburbs
In each sub-market, Calgary’s development community has responded with a
sufficient amount of capacity to absorb these demand requirements, and
alleviate any supply constraints that presently exist within these areas. The
accompanying figure illustrates the short-term transition of market demand in
Calgary’s office submarkets. As indicated in our analysis which is based on a
“preferred” demand forecast, we do not anticipate any major changes in
office market share over the 2006 to 2010 period. Over the next five years,
we expect to see total annual average absorption of approximately 1.0 million
square feet. The net effect of this activity is not anticipated to result in a
material change in demand activity, with downtown Calgary continuing to
capture nearly 70% of market demand.
Allocation of the Demand by Office Submarket
(in thousand square feet)
Start
New Supply
Inventory (1
Completed
2006
2007
2008
2009
2010
31,204
31,204
32,756
34,525
36,972
1,552
1,770
2,447
2,600
2006
2007
2008
2009
2010
3,749
3,773
4,321
4,771
4,771
24
547
450
-
2006
2007
2008
2009
2010
10,195
10,689
11,303
12,841
12,916
495
614
1,538
75
150
2006
2007
2008
2009
2010
45,148
45,667
48,379
52,136
54,658
519
2,713
3,757
2,522
2,750
Net
End
Absorption Inventory
Downtown
354
31,204
932
32,756
730
34,525
691
36,972
39,572
442
Beltline
109
3,773
81
4,321
84
4,771
80
4,771
79
4,771
Suburbs
890
10,689
5
11,303
236
12,841
224
12,916
467
13,066
TOTAL
1,354
45,667
1,018
48,379
1,051
52,136
995
54,658
988
57,408
Occupied
Space
% of Total
Inventory
30,913
31,845
32,575
33,266
33,709
68.3%
67.7%
66.2%
67.6%
68.9%
3,584
3,666
3,750
3,829
3,908
8.3%
8.9%
9.2%
8.7%
8.3%
10,304
10,309
10,546
10,770
11,236
23.4%
23.4%
24.6%
23.6%
22.8%
44,802
45,820
46,871
47,865
48,853
100.0%
100.0%
100.0%
100.0%
100.0%
Source: urbanMetrics inc.
1) Start Inventory for 2006 based on CBRE Q4 2005 data.
Long-Term Growth Capacity? Not a Concern.
Our long-range office forecasts suggest that office-based employment will
continue to grow strongly in Calgary over the 2011 to 2025 period, adding an
estimated 72,000 additional workers requiring “market-type” office space.
urbanMetrics inc.
market, economic and strategic advisors
iv
Calgary Office Market Forecast, 2006-2025
In March 2006, urbanMetrics undertook a review of sites in the city of
Calgary that could theoretically support the development of office facilities on
vacant lands and underutilized sites in the Downtown, the Beltline and
suburban Calgary. Through an individual, site-by-site work-up of permitted
densities on each of these sites, we conservatively estimate that Calgary
could accommodate between 34 and 47 million square feet of additional
leaseable office space. This would suggest that Calgary has enough land
availability to physically accommodate a doubling of current inventory of
office space. Adding this “potential supply” to the existing inventory and the
short-term pipeline, Calgary would have the physical capacity to support
between 92 and 105 million square feet of office space within its existing
urban boundary.
The figure below summarizes our long-term supply and demand forecasts of
office space. As indicated, Calgary and its individual sub-markets will have
more than sufficient office capacity to meet anticipated demand to 2025,
resulting in surplus conditions ranging from 25 to 45 million square feet.
Office Space Net Absorption per Year
(in thousand square feet)
Downtown
Beltline
Suburban
Total
628
115
388
1131
444
628
90
113
268
332
802
1073
Low
407
103
(3)
High
657
140
Source: urbanMetrics inc.
(1) Historic data is based on information provided by CBRE
353
463
863
1260
Historic (1)
5 Yr Trend: 2001-2005
Forecast
(2)
2006-2015
Low
(3)
High
(2)
2016-2025
(2) Enhanced demand scenario based on a declining utilization rate from 250 sf/employee in
2006 to 225 sf/employee by 2025
(3) Constant demand scenario based on a utilization rate of 250 sf/employee over the forecast
period
Short and Long-Term Supply
Analysis
70,000
(000) square feet
Using two estimates of future space allocations per employee ranging from
250 square feet/worker to 225 square feet/worker, we estimate a total market
requirement of office space ranging from 60.1 to 66.7 million square feet of
leasable area2. The accompanying figure summarizes our long-range annual
demand forecasts for Calgary’s submarkets. On an annual basis we
anticipate net absorption to fall within the range of 800,000 to 1.2 million
square feet.
60,000
50,000
40,000
30,000
20,000
10,000
0
Downtown
Existing Inventory
Be ltline
Short- Term Pipeline
S uburbs
Long- Range Potential
2
The low-end of the range is based on a 250 sq.ft./employee utilization rate, tightening to 225 sq.ft./employee by 2025. The high-end is based on the city’s current utilization
pattern of 250 sq.ft./employee, held constant over the duration of the forecast period.
urbanMetrics inc.
market, economic and strategic advisors
v
Calgary Office Market Forecast, 2006-2025
2025 Long-Term Office Demand and Supply Reconciliation
(in Thousand Square Feet)
Current
Inventory(1)
Office
Development
Pipeline
(2006-2010)
(2)
Scenario
Downtown
Beltline
Suburbs
S
NW
NE
Total
Long-Term
Potential "New"
Supply
(2011-2025)
31,204
3,749
10,195
4,466
1,464
4,265
45,148
8,368
1,021
2,871
2,038
97
737
12,260
Low
14,044
10,429
9,943
5,627
1,321
2,995
34,416
(3)
High
21,658
13,036
12,690
6,993
1,810
3,887
47,384
Total Potential
Office Supply
2025
(2)
(3)
Low
High
53,616 61,230
15,199 17,806
23,009 25,756
12,131 13,497
2,882
3,371
7,997
8,889
91,824 104,792
Total Office
Demand 2025
(4)
Low
39,007
5,410
15,628
6,720
2,344
5,564
60,045
(5)
High
43,411
6,011
17,364
7,467
2,605
7,293
66,786
Long Range Office
Space Surplus
(6)
Low
10,205
9,188
5,645
4,664
277
704
25,038
(7)
High
22,223
12,396
10,128
6,777
1,027
3,325
44,747
Source: urbanMetrics inc.
(1) CBRE Q4 2005
(2) 80% of maximum permitted FAR
(3) 100% of maximum permitted FAR
(4) Enhanced demand scenario based on a declining utilization rate from 250 sf/employee in 2006 to 225 sf/employee by 2025
(5) Constant demand scenario based on a utilization rate of 250 sf/employee over the forecast period
(6) Based on a demand allocation of 250 square feet per employee and long-term potential supply estimated at 80% of maximum permitted FAR
(7) Based on a demand allocation of 225 square feet per employee by 2025 and long-term potential supply estimated at 100% of maximum permitted FAR
The results summarized in the above Table suggest that the city of Calgary’s office market would need to absorb approximately 2.3 million
square feet per year to exhaust its long range supply potential. This level of absorption is over 2 times the pace of growth experienced over the
past decade and well above the level of demand forecasted. This analysis gives us clear indication that Calgary’s commercial real estate
market is very well-positioned to accommodate future growth within all areas of the city that could notionally support commercial office
development.
As development goes ahead, the city’s planners and policy makers need to ensure that the Calgary’s infrastructure – especially its road and
transit network- are adequately scaled and timed to meet the needs of economic growth, including a growing share of office development in
suburban Calgary.
urbanMetrics inc.
market, economic and strategic advisors
vi
Calgary Office Market Forecast, 2006-2025
1
Introduction
urbanMetrics inc. (‘urbanMetrics’) was retained in October 2005 by Calgary Economic Development (‘CED’) to prepare a series of market
demand forecasts for the city’s office sector for the periods 2006 to 2010 (short-term) and 2011 to 2025 (long-term). The forecasts prepared in
this report are intended to highlight future space requirements in Calgary, and to determine whether the existing inventory of commercial office
space - including the new space which will come on-stream over the next 5 and 20 years - is sufficient in scale and geographic scope to
sustain and support a healthy outlook for economic growth in Calgary.
1.1
Background
The city of Calgary is the corporate headquarters of Canada’s rapidly expanding oil and gas industry. Over the past several years, surging
global demand combined with supply difficulties have resulted in record-high energy prices, and have provided growth and strong economic
momentum for the city as a whole. As Alberta prepares to become the largest producer of oil in North America, Calgary is anticipated to be
one of the major beneficiaries of this activity because of its well-entrenched position as the financial, technological (R&D/engineering) and
decision-making hub for the industry, attracting new companies to the region with both domestic and international scope.
While Calgary’s economy is currently operating at peak levels, some market observers have suggested that the commercial real estate sector
– which now involves local, national, and international development interests – has been somewhat slow to respond with new office product.
Calgary currently has the lowest overall vacancy rate in the country, at 3.8%. Vacancy rates in the city’s downtown core are even tighter,
currently sitting at 2.1%. Tighter still are vacancy levels within “Class A” downtown buildings which are presently below an astounding 1%.3
In response to current vacancy conditions, escalating rents and sustained job growth prospects, the development sector has stepped forward
with a series of new office projects in Calgary ranging in size between 20,000 square feet at the low end, and approaching 2 million square
feet at the high end. With construction already underway on number of high-profile projects (including Livingston Place, Opus 8, Centrium
Place, Homburg-Harris Centre, Midpark Professional Centre and Mount Royal Block), the city of Calgary now accounts for approximately twothirds of all new office space under construction in Canada. In total, some 12.3 million square feet of office space is expected to be released
into the marketplace between 2006 and 2010.4 This includes the recently announced 1.8 million square feet EnCana Centre, which will be
3
CBRE, Q4 2005, Calgary Marketview
4
Based on urbanMetrics review of projects as reported by InSite, Colliers, CBRE, CRESA Partners and Avison Young.
urbanMetrics inc.
market, economic and strategic advisors
1
Calgary Office Market Forecast, 2006-2025
developed in the city’s downtown east-end area. With a tight market for available office space– especially for high quality, large contiguous
blocks in prime downtown locations– there is recognition that escalating rents and the lack of suitable product may ultimately push many of
Calgary’s high-growth companies out of the downtown altogether. This risk is considered to be particularly acute for large Calgary-based
companies looking to consolidate their operations under a single-roof. In addition, there is also some concern that escalating market rents in
the city may actually have a dampening effect on the city’s long-range ambitions to become a better-diversified economy, one that attracts
business investments in a broad range of industry sectors, beyond those directly related to energy. Based on our findings, energy companies
and business service providers such as accountants, law firms and investment houses, have been able to absorb the higher costs of
downtown Calgary real estate, whereas other segments of the market, such as engineering services, communications firms and technology
companies have, to some extent, been priced out of many areas of downtown Calgary.
1.2
Issues
CED has identified the following issues with respect to Calgary’s office market:
1. Market Drivers: What are the factors that drive demand for office space both now and in the future? CED and other local real estate
representatives have indicated that growth within the energy sector is, and will continue to be, the fundamental driver for Calgary’s
economy. The critical question here is: What specific economic/market variables can and should be used to predict future demand for
office space in Calgary?
2. Office demand: What is the quantum of office space warranted within Calgary in the short-term (2010) and the long-term (2025)?
What types of developments are most likely to take shape? How will this demand be distributed across Calgary?
3. Office supply: What is the total inventory of all known, anticipated and potential office buildings in Calgary? How does the existing
and future supply of office space serve the growing demand for space over both the short and long term periods? And, does Calgary
have sufficient developable land in the downtown and suburb areas to physically support the level of market growth anticipated in the
office sector?
4. Future Implications: Based on market demand patterns for office space, what long-range planning considerations need to be
addressed by the City to ensure that Calgary continues to grow in a sustainable and efficient manner?
urbanMetrics inc.
market, economic and strategic advisors
2
Calgary Office Market Forecast, 2006-2025
1.3
Methodology
The foundation of any economic forecast is predicated on a clear understanding of context (i.e. past trends and market conditions), combined
with a rigorous analysis of key market data variables that, when measured together, provide a reasonable basis for making estimates and
predictions about future market conditions.
The methodology employed in our study has involved the following steps:
1. An upfront consultation process with professional and business leaders actively involved with Calgary’s development community
including real estate developers, commercial real estate brokers, institutional real estate investors, real estate industry associations,
urban planners and economic development practitioners. These one-on-one discussions were used as the basis upon which market
insights, expectations of future office growth, forecast assumptions, and third-party data sources were assembled in order to fully
inform our numerical forecasts.
2. A literature review of key aspects shaping Calgary’s economic base was undertaken, including; metropolitan growth forecasts,
commodity price forecasts, production forecasts, public spending levels, and prevailing labour market conditions.
3. A review of commercial real estate market trends in Calgary’s was conducted, including a review of total office inventory,
vacancy/occupancy rates, rental rates, and annual patterns of space absorption.
4. An analysis of Calgary’s population and employment growth forecasts was undertaken. In addition to the current population and
employment forecasts developed by The City for planning purposes, we have also examined the occupational changes that have
taken place within Calgary’s labour market. These changes include a growing number of employees engaged in “white collar”
professions, as well as a growing number of workers which have adopted non-traditional work patterns such as working-at-home or
jobs that have no fixed place of work.
5. A review of typical floor-space-per-worker trends in a variety of Canadian office markets to determine the amount of space that will
be needed to support anticipated levels of employment growth.
6. Short-term demand forecasts (2006-2010) have been prepared for the city of Calgary based on:
¾
Anticipated employment growth within key occupational segments that demonstrate strong orientation toward office facilities.
urbanMetrics inc.
market, economic and strategic advisors
3
Calgary Office Market Forecast, 2006-2025
¾
20-year patterns of historic office demand (1985-2005) have been analyzed in relation to a broad range of economic
indicators such as energy production, energy prices, employment levels, population growth, government spending, and others
to determine the specific indicators that provide the strongest statistical correlation with office demand patterns.
7. Short-term supply forecasts (2006-2010) were prepared based on projects that are either: under construction, in pre-leasing, or
have been announced in the media. These projects have been assessed based on market location, size and timing.
8. Long-term forecast (2011-2025) have been prepared using Calgary population and employment forecasts and typical floor-spaceper-worker ratios to determine the potential quantum of new space needed in the Calgary market to effectively accommodate growth.
9. Long-term Potential supply forecasts (2011-2025) of office space has been prepared based on an analysis of individual vacant and
underutilized sites in the Downtown and Beltline areas of Calgary, and on sites in the vicinity of selected transit nodes that exhibit
office development potential given their current development structure, locational amenities and policy context.
10. Reconciliation of demand and supply forecasts (2010 and 2025) have been prepared to determine the extent to which Calgary’s
office market growth can be supported by suitable real estate options.
1.4
Data Sources
The study has been prepared through an analysis of available data and previously published reports and forecasts related to office space;
employment levels; energy production and prices; and economic growth (GDP).
The following data sources were considered in the preparation of our demand forecasts
Calgary Real Estate Market (Inventory, Market Rents,
Absorption, Construction, Vacancy, Occupancy, etc.)
Colliers International, CBRE, CRESA Partners, Cushman & Wakefield Lepage , Avison Young, In-Site and
Barclay Street
Population, Employment and Occupational Structure
Statistics Canada, City of Calgary, Alberta Human Resources and Employment, Alberta Construction
Workforce Development Committee
Energy Sector
Canadian Association of Petroleum Producers, the Petroleum Services Association of Canada, AJM
Petroleum Consultants, National Energy Board and Energy Information Administration of United States
Economic Factors
Conference Board of Canada, City of Calgary Corporate Economics, TD Economics, Scotiabank and Bank of
Montreal
urbanMetrics inc.
market, economic and strategic advisors
4
Calgary Office Market Forecast, 2006-2025
1.5
Assumptions and Limitations
The preparation of market forecasts - particularly those which take a longer term view (ie. greater than 3 years) - depend upon a number of
basic underlying assumptions. We recognize and appreciate the problems associated with making broad and generalized assumptions about
future economic conditions. Undoubtedly, deviations from historic trends and current conditions will take place in the future. Nonetheless,
basic assumptions and limitations are necessary to carry out the study’s mandated requirements. These include the following considerations:
1. During the forecast period a reasonable degree of economic stability is assumed for both the province of Alberta and the city of
Calgary.
2. Estimates of population and employment growth have been prepared by The City of Calgary. We have assumed that these forecasts
are current, accurate, and are based on rigorous demographic forecasting techniques that take into account natural rates of growth
(birth rates and mortality rates) and inter-regional migration patterns (inter-provincial, intra-provincial, international).
3. Statistical sources provided by third party sources such as real estate brokerages, Statistics Canada, Conference Board of Canada,
etc. are assumed to be accurate. urbanMetrics has not attempted to validate the baseline data sources used to inform our space
forecasts.
4. Calgary currently has a number of office developments both underway and in various planning stages. Completions of these projects
and their delivery times are based upon our discussions with real estate professionals active in the local office market as well as
published reports and press releases. The size of these projects and their anticipated time-of-opening are assumed to be accurate.
5. While we recognize that office employment occurs in non-office properties, our analysis has focused on demand for space in buildings
larger than 20,000 square feet, and excludes so-called industrial flex space (such as administrative offices located in an industrial
plaza complex), offices in commercial storefronts or second stories of commercial strip developments.
6. The supply and demand forecasts exclude office space used exclusively for public administration purposes such as local, provincial
and federal government offices and courthouses. The forecasts do however recognize that government bodies and agencies are
important tenants in the commercial real estate market, and we have assumed that a portion of future growth within the government
sector will continue to occupy “market” space within privately owned, multi-tenant office buildings.
urbanMetrics inc.
market, economic and strategic advisors
5
Calgary Office Market Forecast, 2006-2025
1.6
Study Area
The Study Area for this project is based on the demographic, labour market and economic conditions within an area known statistically at the
“Calgary Economic Region” or ”Alberta Census Division 6”. This area encompasses the City of Calgary, the Calgary Census Metropolitan Area
(CMA) as well as a number of outlier communities such as Okotoks, High River (to the south) and Airdrie, Didsbury, Olds and Cochrane (to
the north and west).
For the purpose of our study, Calgary’s office sub-markets are delineated as follow:
•
Downtown: North of CP Tracks, South of Bow River, East of 10 St SW, West of 3rd Ave SE
•
Beltline: South of CP Tracks, North of 17th Ave SW, East of 14 St SW, West of Elbow River
•
South: South of Bow River and South of Highway 1A
•
Northwest: North of Bow River and West of Deerfoot Trail
•
Northeast: North of Highway 1A and East of Deerfoot Trail
The office market in Calgary is heavily concentrated in the central area, including the Downtown core and the Beltline district. Office buildings
are also found in the suburban areas of the city, with the majority of suburban space concentrated in the southwest (along Macleod Trail) and
the northeast (along Barlow Trail and Hwy 2) in the general vicinity of the Calgary International Airport.
urbanMetrics inc.
market, economic and strategic advisors
6
Calgary Office Market Forecast, 2006-2025
Source: The City of Calgary
Source: urbanMetrics inc.
Figure 1.1
Calgary Economic Region
Figure 1.2
Calgary Office Sub-Markets
urbanMetrics inc.
market, economic and strategic advisors
7
Calgary Office Market Forecast, 2006-2025
2
Office Market Conditions
The Calgary Economic Region (CER), with an estimated population of 1.17 million5, is currently considered one of the strongest markets in
Canada in terms of economic growth, job opportunities, and per capita wealth. Unemployment in the CER is presently at 3.5%6. The city is a
major beneficiary of Alberta’s strong and rapidly expanding energy sector. In 2004 and 2005, the energy sector experienced record-high oil
and gas prices brought about by the combined effect of on-going political instability in major oil producing regions (Middle-East, Latin America
and Russia) and rapidly escalating demand expectations from emerging economies, most notably China and India. The impacts of severe
weather in the Gulf of Mexico in 2005 also had a significant destabilizing effect on the energy sector, pushing prices upwards and throwing
into question the long-term viability of much of North America’s current refining capacity.
Growing global demand for oil has, and will continue to drive investment in Alberta’s massive oil sand reserves. The Alberta oil sands will see
an estimated $143 billion in new project investments over the next decade, pushing total output to nearly 3 million barrels-per-day by 2015. It
is anticipated that over the next 10 to 15 years, Alberta will become the single largest supplier of oil in the North American marketplace. As the
corporate, financial and technological hub of Canada’s energy sector, Calgary will continue to play a major role in the global marketplace,
providing leadership and innovation in the areas of project finance, production, distribution and alternative fuel products.
Given the prevailing economic climate including a Canadian dollar hovering above the 85 cent mark, the energy sector has helped to off-set
the economic challenges faced by other regions in the country, most notably the manufacturing sector in Ontario and Quebec, the forestry
sector in British Columbia and the ailing Atlantic fisheries in the eastern provinces.
The health of Alberta’s economy over the past several years has had both direct and immediate impacts on Calgary’s commercial real estate
sector. Commercial market watchers, particularly those in the institutional investment world, are keenly aware of Calgary’s long-term strength
in this regard.
5
City of Calgary, Corporate Economics, estimates for the year 2006.
6
Ibid.
urbanMetrics inc.
market, economic and strategic advisors
8
Calgary Office Market Forecast, 2006-2025
Currently, Calgary boasts:
9
The highest net market rents outside of Toronto ($35+ net per square feet for Class AA downtown space) 7
9
The lowest overall office vacancy rate (3.8% - and falling) 8
9
The lowest downtown vacancy rate for prime Class “A” space (0.9% - and falling)9
9
Average annual net absorption of 1,000,000 square feet per year over the past decade10
2.1
Historical Trends
As of Q4 2005, the Calgary office market has some 45,148,000 square feet of space, with a vacancy rate of 3.8%. This rate represents a
substantial decline from 1992 vacancy levels, when a combination of over building (during the late 1980s) coupled with weak economic
conditions (a deep recession in the early 1990s) caused vacancy levels to spike sharply reaching 22%.
The real estate community suggests that there are three primary reasons for Calgary’s present market situation:
1. Increased developer and lender discipline (reluctance to over-build).
2. The strength of the oil and gas sector as well as the resulting growth in many supporting business and financial services (high
revenues, strong capital expansion, increased job growth).
3. Strong business confidence resulting in new business formation and hiring.
Figure 2.1 summarizes the changes that have occurred in the Calgary office market since 1987. Affected largely by macro-economic
conditions, the city has experienced both boom and bust periods. Calgary is now characterized as a “landlord’s market”.
7
CBRE, Q4 2005
8
CBRE, Q4 2005
9
CBRE, Q4 2005
10
In 2005, net office absorption surpassed 2 million square feet, making it a record year for leasing transactions.
urbanMetrics inc.
market, economic and strategic advisors
9
Calgary Office Market Forecast, 2006-2025
Figure 2.1 Office Market Conditions for Calgary
3.0
New Supply/
Absorption (Mns sf)
Vacancy Rate
25%
2.5
20%
2.0
1.5
15%
1.0
0.5
0.0
10%
-0.5
-1.0
5%
-1.5
-2.0
0%
87
88
89
90
91
92
93
94
95
96
97
98
99
00
01
02
03
04
05
Year
Net New Supply
Absorption
Vacancy Rate
Source: urbanMetrics inc. based on information provided by CBRE.
urbanMetrics inc.
market, economic and strategic advisors
10
Calgary Office Market Forecast, 2006-2025
2.2
North American Comparisons
As one of North America’s fastest growing cities, Calgary will continue to compete with other urban areas for investment attraction and job
growth. For comparative purposes, in Figure 2.2, we have measured the size of Calgary’s office market relative to other leading corporate
centres in Canada (Toronto, Ottawa, Montreal, Edmonton, Vancouver); the US west coast (Seattle, San Francisco, Los Angeles) and other
cities that have a strong presence in the energy sector (Denver, Houston).
Figure 2.2 North American Office Space Market Comparison (1)
Metropolitan
Area
Downtown
Million SF
% in
Downtown
Suburban
Million SF
TOTAL
Million
SF
Vacancy Rate
(downtown)
Vacancy
Rate
(Suburban)
Total
Metropolitan
Population
Downtown
SF per
capita
Suburban
SF per
capita
Total SF
per
capita
Calgary
31.2
65%
16.7
47.9
2.0%
6.2%
1,170,000
27
14
Denver
25.8
23%
87.2
113.0
15.2%
16.6%
2,443,290
11
36
Edmonton
14.8
65%
7.9
22.7
5.4%
9.9%
1,014,082
15
8
Houston
43.6
20%
170.5
214.1
19.6%
14.4%
3,693,050
12
46
Los Angeles
31.3
18%
142.1
173.4
16.3%
11.1%
9,935,475
3
14
Montreal
49.9
70%
21.6
71.5
12.7%
12.5%
3,621,825
14
6
Ottawa
15.0
44%
18.9
33.9
3.4%
13.3%
1,154,000
13
16
San Francisco
79.4
72%
30.8
110.2
13.2%
20.4%
6,862,574
12
4
Seattle
37.0
42%
50.9
87.9
12.0%
13.0%
2,528,769
15
20
Toronto
83.3
51%
79.4
162.7
9.2%
10.5%
5,203,571
16
15
Vancouver
24.2
48%
26.7
50.9
6.3%
8.6%
2,153,975
11
12
Source: Colliers (2005 Q4), U.S. Census Bureau, City of Calgary, City of Edmonton, City of Toronto, Bureau de la Statistique du Quebec, City of
Ottawa, City of Vancouver
(1) The numbers provided should be interpreted with caution. The methodology identifing "suburban" and "downtown" market may not be
identical for each metropolitan areas
The following observations highlight the critical role that office activity plays in the Calgary market:
41
46
22
58
17
20
29
16
35
31
24
1. Strong Downtown Focus
2. High Per Capita Space levels
3. Extremely low vacancy levels
urbanMetrics inc.
market, economic and strategic advisors
11
Calgary Office Market Forecast, 2006-2025
2.3
Economic Outlook
2.3.1 Canada
According to the Conference Board of Canada, the national economy grew by 2.7% in 2005. Economic growth is expected to remain strong,
coming in at or near 3.1% through to 2010. From 2010-2015, the national economy is expected to grow at its long-term potential of 3.0%. This
lower growth is anticipated to come about as a direct result of monetary tightening by the Bank of Canada as it seeks to keep inflation within a
targeted range of 1- 3%.
2.3.2 Alberta
Since 1994, Alberta has had one of the fastest growing provincial economies in Canada, with GDP output growing by an average annual rate
of 3.8% over the past decade. The Alberta economy is expected to grow by 3.7% in 2006, which is well-above the forecasted national average
of 3.1%. Going forward the provincial economy, propelled by healthy and sustained energy exports, is anticipated to maintain its strong pace
of growth to at least 2008.
2.3.3 Calgary
Economic growth in Calgary is forecasted at 3.8% in 2006 (down slightly from 3.9% in 2005).
In Calgary, the construction industry is expected to generate over 15,800 new jobs between 2005 and 2010, the most for any single industry.
Total employment is expected to grow by 90,000 jobs over the 2005-2010, which translates into an average annual growth of 2.2%. Calgary,
like the rest of the Province, is currently experiencing a very tight labour market. Many industries (and occupational groups) are now
experiencing severe labour shortages. With an unemployment rate currently sitting at 3.1%, current economic forecasts suggest that this will
continue to contract until at least 2010.
Net migration to Calgary is expected to remain relatively stable over the short term. Healthy economic conditions in other large Canadian
cities, particularly Toronto, Vancouver and Montreal, will likely see a sustained pattern of attraction for new immigrants to Canada’s largest
cities. Growth in Calgary has traditionally depended on intra-provincial and inter-provincial movements. Labour shortages in Calgary and
elsewhere in Alberta (such as Edmonton and Fort McMurray) have, and will continue to, result in inward movement of job seekers from other
parts of Canada. To some extent, Calgary’s ability to attract workers (and alleviate its own labour shortages) is ultimately dependent on the
types of jobs available in Calgary, and its ability to provide competitive wages that will help to off-set the higher cost of housing in the city
compared to other urban centres.
urbanMetrics inc.
market, economic and strategic advisors
12
Calgary Office Market Forecast, 2006-2025
2.4
Calgary’s Competitive Advantages
Our research provides us with some indication about the variables that are important in determining the success of a city, and its ability to
attract firms, stimulate entrepreneurial growth and create jobs. Traditionally these variables include:
¾
¾
¾
¾
¾
¾
¾
¾
Size and access to capital markets;
Labour market size and mix of skills;
Regulatory regime;
Taxation;
Land and labour cost;
Transportation, connectivity and accessibility;
Business culture; and
Quality of life/environment
With regards to each of these, Calgary is generally well-positioned to attract a healthy share of new investment and corporate expansions.
Based on a recent cost comparison study, Calgary rated very favourably in terms of overall business costs.11 On a comparative basis,
Calgary is ranked as the fourth most competitive location for business in the Western Canada/US Midwest Region. According to the study,
Calgary ranks well above other important centres in the region, including: Chicago (ranked 15th), Dallas-Forth Worth (ranked 18th), Houston
(ranked 20th) and Minneapolis (ranked 21st). Relative to other Canadian cities, Calgary continues to maintain a competitive cost advantage
over Vancouver, Toronto and Vancouver. Compared to Edmonton, Winnipeg and Saskatoon, Calgary is marginally more expensive.
2.5
Calgary’s Economic Drivers
While comparative cost advantages help to bolster the case for investment by new companies and for reinvestment and expansion by existing
companies, such factors can not be readily translated into determinants for future market growth. For the purpose of this study we have
focused our attention on the key drivers of the Alberta and Calgary economies that we believe might provide a strong basis for forecasting
office demand for the city.
11
Competitive Alternatives 2006: KPMG’s Guide to international business costs.
urbanMetrics inc.
market, economic and strategic advisors
13
Calgary Office Market Forecast, 2006-2025
Alberta’s principal economic driver – energy – continues to be the most significant determinant of demand for office space in the Calgary
Economic Region. As Canada’s primary oil and gas business centre, Calgary is home to almost 2,000 energy companies12. These
companies, regardless of their size and role within the industry, have demonstrated very strong tendencies toward agglomeration. In 2004, for
example, Imperial Oil relocated its head office from Toronto to Calgary. At the time the relocation was announced, company officials at
Imperial Oil suggested that the move was a business decision based on three motivating factors: (i) the increasing level of day-to-day
business and decision-making taking place in Calgary; (ii) the need to be closer to their operational production base which is largely situated in
western Canada, and (iii) the heavy travel demands being place on senior staff travelling back and forth between Toronto and Calgary.
High energy prices over the past four years have led to increased drilling activity throughout Alberta, and have also translated into increased
field activity in neighbouring Saskatchewan and parts of the interior of British Columbia. Strong capital investment in energy-related projects
are expected to continue throughout western Canada and indeed all other productions regions in the country, most notably in Newfoundland &
Labrador which is currently experiencing a major boom as new off-shore production comes on-line.
The Canadian Association of Petroleum Producers (CAPP) estimates that total investment in the province’s energy sector will reach over $30
billion in 2006, with over $20 billion invested in conventional oil and gas development and over $10 billion in oil sands development. On a goforward basis, investments in the oil sands are anticipated to remain strong between 2006 and 2009.
According to the Alberta Construction Workforce Development Forecasting Committee, investment activity in the oil sands is anticipated to
escalate in 2006 and 2007, peaking in 2008 with $8 billion worth of capital investments committed. By 2009, the major companies are
expected to scale back their commitments to approximately $4.5 billion. By 2010 these investments are expected to level off as the focus
shifts from development to operations. In total, an estimated $85 billion is expected to be invested over the next decade in Alberta’s oil sands.
While the majority of oil-sands related jobs will be based in the Fort McMurray and Edmonton areas, key business, financial, technical, legal
and marketing expertise will be urgently needed by the industry to ensure that capital investments are brought on-line as planned. As the
administrative and decision-making centre of Alberta’s energy sector, Calgary will continue to be one of the major beneficiaries of an
expanded oil industry, attracting more companies and a diverse range of professionals with the technical skills necessary to manage the
financial, technical, market, and regulatory dimensions of the industry.
12
Stats Canadian Business Patterns 2004 and Calgary Economic Development.
urbanMetrics inc.
market, economic and strategic advisors
14
Calgary Office Market Forecast, 2006-2025
In Calgary, there are approximately 37,000 workers that are directly employed by companies within the energy sector. This accounts for nearly
6% of the city’s total workforce. Indirectly, the oil and gas sector is anecdotally said to drive approximately 80 to 90% of the business activity
conducted by Calgary firms that are not defined as “energy” companies per se. In effect, this means that the lion’s share of employment within
Calgary’s office buildings, particularly those within financial services (banking, corporate finance, accounting, etc.), insurance, legal services,
engineering, and business advisory are all driven by the health and well-being of the energy sector. Indeed, the economic stability of the city,
despite on-going efforts to achieve greater economic diversification, is still heavily susceptible to expansion and contraction of the energy
sector. With energy prices expected to remain at or near their current levels over the foreseeable future (3 to 5 years), expansionary
pressures in the economy are likely to stimulate strong demand for office space throughout the forecast period of this study.
In Figure 2.2 we have provided a summary of forecasts derived from third-party sources such as the Conference Board of Canada, the
Canadian Association of Petroleum Producers, the Petroleum Services Association of Canada, Statistics Canada and the City of Calgary
Corporate Economics Group. These forecasts are used in the next section to help inform our short-term demand forecasts for office space.
Using 2000 as a base index year, our trend line/forecast analysis suggests that:
¾
The unemployment rate is expected to edge downward remain below current levels over the duration of the short term (2006-2010)
forecast period.
¾
Oil and natural gas prices are anticipated to soften somewhat relative to their current (2005) levels. Prices, however, will remain
well-above 2000 levels for over the short to mid term, with oil prices are anticipated to outperform gas prices over the duration of the
forecast period.
¾
Oil production is anticipated to grow at consistently high levels, with healthy year over year growth over the forecast period. This is
indicative of on-going expansion and increased output of the province’s oil sands.
¾
Natural gas production is expected to remain relatively flat over the forecast period
urbanMetrics inc.
market, economic and strategic advisors
15
Calgary Office Market Forecast, 2006-2025
Figure 2.2 Forecast of Calgary's Economic Drivers - 2000-2015
2
Index (2000=1)
1.8
1.6
1.4
1.2
1
0.8
0.6
2000
2001
2002
2003
2004
2005
2006
Unemployment Rate
Oil Price
Oil Production
2007
2008
2009
2010
2011
2012
2013
2014
2015
GDP
Natural Gas Price
Natural Gas Production
Sources: urbanMetrics inc. based on information provided by the City of Calgary, US Energy Information Administration and
the Canadian Association of Petroleum Producers (CAPP)
urbanMetrics inc.
market, economic and strategic advisors
16
Calgary Office Market Forecast, 2006-2025
3
Short-Term Office Space Forecast for Calgary, 2006-2010
The development of short-term office space demand forecasts for Calgary is based on two methodological approaches:
1. Econometric Method: This approach attempts to statistically model key economic indicators and trends witnessed over the past 20
years in relation to commercial (office) market leasing and construction activity over the same period. Based on 20-year historic as
well as projected economic growth patterns, we have prepared 5-year forecasts for total office demand in Calgary.
2. Employment Method: This approach utilizes the 2005-2010 occupation-based growth forecast for Calgary prepared by Alberta
Human Resources & Employment. urbanMetrics has used these forecasts by isolating key occupational groupings (National
Occupational Codes, or “NOC”) in Calgary that demonstrate heavy or moderate orientation to office buildings greater than 20,000
square feet. Occupational based forecasts developed by The Province take into consideration the expansionary influences of the
province’s and the city’s economic base, and the specific factors that are shaping employment growth within those specific
occupational segments such as an aging population base and other changing demographic conditions. The employment forecasts
developed in this approach are then converted into physical space requirements using typical office space allocations per worker.
The following sub-sections provide a more detailed discussion around the methodological approaches used in each of our forecasting
techniques, and summarize the findings in terms of the total amount of office space that will be demanded by the marketplace over the 2006
to 2010 forecast period.
urbanMetrics inc.
market, economic and strategic advisors
17
Calgary Office Market Forecast, 2006-2025
3.1
Econometrics Method
For the purposes of our analysis we have developed an econometric model that
analyzes and measures the inter-relations between a variety of economic variables,
with the expressed intent of developing a forecast that provides a reasonable
measure of how projected changes in each of the variables will impact the amount of
occupied space (demand) in Calgary. The economic indicators considered in our
analysis are provided in Figure 3.1. For analysis purposes, our demand forecasts
consider “occupied space” both in the downtown and in the total Calgary market as
the dependent variables.
Findings
At a probability of p = 0.05 [or a 95% confidence interval] the following variables
were shown to have the most statistically significant relationships when measured
against total occupied space in the Calgary market:
1.
∆ Total drilling activity (oil and gas)
2.
∆ Oil price growth
3.
∆ Calgary’s unemployment rate
Figure 3.1 Economic Indicators Measured
Office Market (Calgary)
Occupied Space (Downtown)
Occupied Space (Total)
Vacancy Rate (Total)
Production (Canada)
Canadian Natural Gas
Canadian Oil Production
Expenditure (Alberta)
Oil Sands
Alberta Petroleum capital spending (excluding Oil Sands)
Drilling Activity (Alberta)
Total Drilling
Price
Oil
Natural Gas
Economic Context (CER)
Public Expenditures
Total Employment
Unemployment Rate
Gross Domestic Product
The selection of these three variables for our regression model confirms our initial assumptions regarding the impacts of the energy sector (in
terms of production growth, total output and pricing) and labour market conditions in Calgary. Other variables also demonstrated significant
correlations at the 0.05 probability threshold; however they did not return significantly increased R-squares when the independent variables
were controlled. For this reason they were not considered appropriate for further analysis.
urbanMetrics inc.
market, economic and strategic advisors
18
Calgary Office Market Forecast, 2006-2025
Between 1995 and 2005 the econometric model could only explain 50% of the variance (r2=0.498) in the total amount of office occupied space
in Calgary (i.e. demand). Achieving a high level of explanatory power is, of course, a primary objective in terms of adopting and applying the
model’s results to an economic forecast of future office space need.
In addition to our analysis of the total Calgary office market, we also conducted the same statistical tests on downtown office market
conditions. Our analysis recognizes the fact that the city’s downtown core physically captures the vast majority of energy and energy-related
companies and employment; and also represents approximately two-thirds of all the space contained within the city’s overall office inventory.
Using the same methodology described above, the variables could only statistically explain about 52% of the total variance (r2=0.52) in office
demand in downtown Calgary of the over the previous 20 years (1985 to 2005).
The following equations lays out of the coefficients associated with each variable used to forecast market office space in the Calgary market
and in the downtown core specifically.
y = 25833+ 203a + 73347b − 360734c
Where:
y= ∆ in Occupied Space in Calgary
z = 173938 + 189a + 38354b − 417902c
z= ∆ in Occupied Space in Downtown Calgary
a= ∆ in Drilling Activity in Alberta
b= ∆ in Crude Oil Price
c= ∆ in Unemployment Rate
Over the course of our analysis we also discovered that the coefficients of determination were not as high as we would have expected .13 This
may potentially suggest that a tenant’s demand for physical space is only partly a function of their expectations for growth and expansion
rather than simple adjustments based on a number of variables at a given point in time. In other words, corporate decision makers may in fact
13
2
For example an, r greater than 0.80
urbanMetrics inc.
market, economic and strategic advisors
19
Calgary Office Market Forecast, 2006-2025
adjust their growth expectations upwards, and initiate investment in whole series of items (such as real estate, staffing, new machinery and
equipment and capital improvements) which, in hindsight were not actually needed. The challenge presented in our econometric approach lies
in its ability to capture the future expectations of actual space requirements. To test our hypothesis, we ran the models with the same
economic variables in search of potentially better coefficients of determination. In doing so, all the energy variables used in our model (i.e.
those based on price and production) were re-calibrated to provide for a two year lag period. In other words, we presumed that office space
absorption (i.e. secured through lease commitments) would begin to take place 2 years in advance of actual energy fluctuations occurring in
the marketplace. The results of the lag-corrected model unfortunately did not provide any greater degree of confidence, leading us to conclude
that an econometric-based approach contains some critical shortcomings when applied to short-term office demand forecasting.
Based on the models developed above, Figure 3.2 below illustrates the future demand for office space in Calgary and in its downtown. The
graph illustrates the projected trend line between 2006 and 2010. The reader should note that the future supply provided in Figure 3.2 is
calculated as the existing inventory (45 million square feet), plus all known office projects currently in the construction and pre-leasing phases
of development, all of which, according to their proponents will be delivered before the end of 2010.
urbanMetrics inc.
market, economic and strategic advisors
20
Calgary Office Market Forecast, 2006-2025
Figure 3.2 Office Space Forecast (2006-2010)
Econometric Method
Millions
Square Footage
Historic
Forecast
60
57.4 M
55
50
45.5 M
45
40
35
32.3 M
30
25
19
8
19 5
8
19 6
8
19 7
8
19 8
8
19 9
9
19 0
9
19 1
9
19 2
9
19 3
9
19 4
9
19 5
9
19 6
9
19 7
9
19 8
9
20 9
00
20
0
20 1
0
20 2
0
20 3
0
20 4
0
20 5
0
20 6
0
20 7
0
20 8
0
20 9
10
20
Inventory
Occupied Space (total)
Occupied Space (downtown)
Inventory (2006-2010)
Occupied Space (2006-2010)
Occupied Space (2006-2010) downtown
Sources: urbanMetrics forecast. Historic information supplied by CBRE
In light of the model’s structural short-comings, the following results were returned by the model:
1. The level of occupied space demanded in all of Calgary will reach an estimated 45.5 million square feet in 2010. This represents a
total increase of 2.0 million square feet above its current level.
urbanMetrics inc.
market, economic and strategic advisors
21
Calgary Office Market Forecast, 2006-2025
2. The level of occupied space demanded in the downtown core would reach an estimate 32.3 million square feet in 2010. This
represents a net increase of approximately 1.8 M square feet, suggesting an average annual absorption pattern of approximately
350,000 square feet per year over the next five years. This is about 265,000 square feet below the 10-year historic rate of the
downtown market. On a residual basis, this would leave only 50,000 square feet per year on average to be absorbed in the city’s
suburbs. The Calgary office market has sufficient physical capacity in the pipeline to support short-term demand for office space over
the 2006-2010. This however is only possible because of the substantial amount of new construction in the downtown market.
3. Based on our understanding of new office supply in the development pipeline, the level of estimated demand (2.0 million square feet)
falls well short of the 12.3 million square feet under consideration.
4. Under this scenario the vacancy rate at the end of the forecast period will reach an estimated 21%. This level is extremely high
and is generally consistent with the vacancy levels experienced at the end of Calgary’s last building boom in the late 1980s.
The following section below provides an alternative method of space demand based on employment growth. It has been provided for a more
fulsome discussion of demand patterns in Calgary over the next five years.
3.2
Employment Forecast Method
In contrast to the econometric approach which considers a myriad of economic variables and assesses them on the basis of historic impacts
on office demand, the employment forecast utilizes off-the-shelf employment forecasts for the Calgary Economic Region. These forecasts
have built-in assumptions regarding local and macro-economic conditions that will ultimately affect the demand for employment on an
aggregate basis, and for specific occupation groupings.
The City of Calgary, under the direction of the Corporate Economics Group, has developed the following employment forecasts for the Calgary
Economic Region (CER). These forecasts - which are based on anticipated economic growth parameters (such as GDP growth, public
spending patterns), as well as net migration rates - indicate that the Calgary Economic region will add another 77,800 new jobs over the
short-term (2005-2010) and an additional 187,000 jobs over the subsequent 2010 – 2025 period.
urbanMetrics inc.
market, economic and strategic advisors
22
Calgary Office Market Forecast, 2006-2025
Figure 3.3 Forecast Employment Growth Calgary Economic Region 2005-2025
Employment
2005
2010
2015
2020
2025
659,100
736,900
793,900
857,300
923,300
5-yr. Incremental Growth
77,800
57,000
63,400
66,600
% Annual Growth
2.5%
1.5%
1.6%
1.6%
Source: urbanMetrics inc. based on information supplied by The City of Calgary Corporate Economics
While the employment growth forecasts indicated above provide some indication of the relative strength of Calgary’s economy over the short
and long term, these forecasts are somewhat limited in their ability to explain: How this job growth will physically impact and influence the
shape of the city? What types of employment are being created in the city? And, what types of locations and buildings are needed to house
these new jobs?
Given the fact that there are no official census or statistical figures directly attributing employment to physical space (i.e. office buildings,
warehouses, industrial buildings, airports, hospitals, etc.) the development of employment forecasts that specifically isolate office-based jobs
has required us to consider a variety of data options in our analytical approach. The following discussion describes the process for preparing
our short-term employment based forecast (Step 1 and Step 2), and the conversion of an employment forecast into a physical measurement of
office demand (Step 3 and Step 4).
STEP 1
Employment data is typically measured based on industry classification codes such as the North American Industry Classification
System Codes (NAICS). These data – both historic and forecasted - are available through Statistics Canada for a variety of
geographic levels, including the Calgary Economic Region. The key challenge presented by NAICS-based forecasts is the fact they
blend a variety of job types, making it difficult to parse out office based employment versus factory or warehouse based employment.
In other words, it is very difficult to identify those that are “white collar” in nature (office-based jobs) versus those that are “blue collar”
or “transient” in nature. The Transportation and Warehousing (T&W) category, which is a significant employer in the Calgary region,
illustrates this point effectively. In Calgary the T&W sector makes up approximately 8% of the workforce and is comprised of a wide
range of jobs including, truck drivers, airline pilots, dispatchers, customer service agents, postal workers, civil engineers, data
urbanMetrics inc.
market, economic and strategic advisors
23
Calgary Office Market Forecast, 2006-2025
processors, office administrators, management executives, etc. Given the breadth of jobs found within the NAICS code systems, it is
extremely difficult to determine an appropriate allocation of jobs within each sector that are housed within office buildings.
STEP 2
As an alternative to the NAICS data, Alberta Human Resources and Employment (AHRE) publishes data and forecasts for the
Calgary Economic Region relating to employment activity by standard National Occupation Codes (3-Digit NOCs). Based on most
recent forecasts, AHRE has developed 2005 to 2010 employment forecast for each and every occupation code. Through our review
and analysis of these data we determined that these more detailed forecasts provide a far more accurate basis for projecting potential
office demand in Calgary, specifically, AHRE enabled the study team to:
a. zero in on the specific occupations in Calgary that are found 100% in office buildings.
b. eliminate all occupations that are not found in office buildings (e.g. retail sales, construction trades, transit workers, etc.); and
c.
allocate reasonable estimates for those occupations which are partially found in office buildings greater than 20,000 square
feet.
Findings
Figure 3.4 provides a summary roll-up of total office employment forecast for occupations found in office buildings (>20,000 square feet) in the
Calgary Economic Region based on AHRE projections. These numbers are based on a detailed, line-by-line assessment of each
occupation, and a reorganization of jobs into the five broad categories.
Based on the results of our analysis we have concluded that:
¾
Office employment in 2005 in the city of Calgary is currently estimated at 212,500. This represents approximately 32.2%
of the total (estimated) employment base.
¾
Overall, we are not forecasting any major compositional shifts in the share of office jobs by occupation. Business and Finance
jobs, for example, will continue to comprise the largest share (60%) of the total jobs found within the city’s office buildings.
urbanMetrics inc.
market, economic and strategic advisors
24
Calgary Office Market Forecast, 2006-2025
¾
Between 2006 and 2010 the total number of office jobs is forecast to increase by approximately 25,000 jobs. This
represents approximately 1 in every 3 new jobs created in Calgary.
¾
Over the 2006 to 2010 period the proportion of office jobs in the Calgary economy will likely remain stable, representing
approximately one-third of the total employment base.
¾
Occupations related to Business and Finance (i.e. management and administration) will experience the most dramatic gains
in absolute terms, creating an additional 14,900 jobs in Calgary between 2006 and 2010, an increase of 12% over 2005 level.
¾
The Natural and Applied Sciences, which is heavily weighted toward professional and technical occupations in the fields of
engineering and geo-sciences, is expected to grow by nearly 6,600 new jobs in Calgary between 2006 and 2010. This
represents a 10% increase over current (2005) levels.
¾
Office-based Healthcare employment - which is estimated at approximately 1 in every 5 healthcare jobs in Calgary - will
continue to grow, albeit the amount of jobs anticipated in major office buildings is not anticipated to be very significant;
approximately 200 new jobs by 2010.
¾
Professional Services, which include marketing, advertising, legal and consulting professionals, is expected to make
significant gains. In total, approximately 2,700 new jobs will be created, representing a net increase of 13% over current
(2005) levels.
urbanMetrics inc.
market, economic and strategic advisors
25
Calgary Office Market Forecast, 2006-2025
Figure 3.4 Calgary Office Employment Forecasts based on Occupations Codes
(in thousands)
2005
127.5
60%
2006
130.8
60%
2007
133.4
60%
2008
136.6
60%
2009
139.6
60%
2010
142.3
60%
Total ∆
2005-2010
14.9
59%
56.6
27%
57.7
26%
59.4
27%
60.6
27%
61.8
27%
63.1
27%
6.6
26%
2.9
1%
2.9
1%
3.0
1%
3.0
1%
3.0
1%
3.0
1%
0.2
1%
20.4
10%
21.1
10%
21.7
10%
22.1
10%
22.6
10%
23.1
10%
2.7
11%
5.2
5.3
5.5
5.7
Other
Percentage of Total
2%
2%
2%
3%
212.5 217.8 222.9 228.0
TOTAL OFFICE WORKERS
Source: urbanMetrics inc. and Alberta Human Resources and Employment
5.8
2%
232.8
5.9
2%
237.5
0.7
3%
Business and Finance
Percentage of Total
Natural and Applied Science
Percentage of Total
Healthcare
Percentage of Total
Professional Services
Percentage of Total
urbanMetrics inc.
market, economic and strategic advisors
25.0
26
Calgary Office Market Forecast, 2006-2025
STEP 3
Carrying forward our analysis of current (2005) and forecasted office-based employment growth over the 2006-2010 period, we then
applied standard industry allocations of office space per office employee14.
The development of a reliable measurement of office space per employee is based on a thorough review of historic and current
practices with respect to floor space design, recognizing that innovations in office technology, electronic data storage and module
(“cubical”) furniture design have enabled companies to realize greater space efficiencies thereby, increasing the number of employees
that can be accommodated on a typical floor plate. Research conducted by Royal LePage, determined that the average amount of
office space per worker in Canada has declined from 247 square feet per office employee in 1991 to 202 square feet per office
employee in 200315. While this represents a significant drop, we would point out that the economic circumstances in 1991 (a period
characterized by large scale employment layoffs immediately after an office development boom) are substantially different than those
of 2003 (a period characterized by strong economic prosperity with limited new office constructions). Despite the drastic changes in
economic circumstances over Royal LePage’s study period, other influences, most notably the impact of desk-top computing and the
subsequent introduction of new, more flexible workspace concepts, such as work at home16, telecommuting, job-sharing and hotelling
have all helped to dramatically reduce the amount of office space needed to efficiently accommodate day-to-day office functions.
Several real estate representatives in Calgary consulted for the purpose of this study indicated that the prevalence of large corporate
head-office operations in the city may skew office space allocations above and beyond national levels because of larger than average
executive offices, large board rooms and other built-in amenities. It was also suggested that the general absence of large dataprocessing and call centres in Calgary compared to Edmonton, Toronto and other office centres also contributes to a rather
“generous” allocation of space on a per employee basis.
14
Square Feet per Worker
15
Royal LePage Advisors Inc., Commercial and Industrial Real Estate Development Trends and Forecast for the Greater Vancouver Region, 1991-2021, August 2003
16
Statistics Canada defined people “working at home” as: “Persons whose job is located in the same building as their place of residence, persons who live and work on the same
farm, building superintendents and teleworkers who spend most of their work week working at home”. In the 2001 Census, 38,600 workers the Calgary CMA were included in this
category.
urbanMetrics inc.
market, economic and strategic advisors
27
Calgary Office Market Forecast, 2006-2025
In Figure 3.5 below, we have prepared an historical assessment of occupied space per worker in Calgary over the past decade.
Figure 3.5 Historical Occupied Space per Office Worker in Calgary
Square Foot per Employee
300
290
280
270
260
10 yr Average = 251 sf/emp
250
`
240
230
220
210
200
1996
1997
1998
1999
2000
2001
2002
2003
2004
2005
Sources: urbanMetrics inc., CBRE and Alberta Human Resources and Employment
Similar to national trends described by LePage, the above figure illustrates quite clearly the relative decline in the amount of the space
per employee that has taken place over the past decade, dropping from about 280 square feet per office worker a decade ago to
about 250 square feet per office worker in today’s market. Given the conditions in Calgary where space allocated per employee has
traditionally been quite “generous”, we believe it is reasonable to suggest that this number can, and will, edge downward over the
long-term (2011-2025). Indeed, the city’s office market is expected to fall into closer conformity with national trends related to space
utilization.
urbanMetrics inc.
market, economic and strategic advisors
28
Calgary Office Market Forecast, 2006-2025
STEP 4
To complete our employment-based office demand forecasts we have assigned three potential space-per-worker factors to the
forecasted level of office employment. Our short-term demand forecasts are summarized in Figure 3.6. For analytical and
comparative purposes we have used allocations of 225, 250 and 275 square feet per office worker in order demonstrate the
magnitude of variation that these rates ultimately have on total office demand, and amount of new space warranted in the market.
17
¾
@ 275 square feet per employee – this scenario utilizes an office space density consistent with levels in the mid-1990s. At this
level, the demand falls just short of the total amount of space being added to the market. Under this scenario, the amount of
office space demanded would be approximately 54 million square feet, which is roughly in line with the 57 million square feet in
the marketplace by 201017. Based on our professional opinion, we do not believe that tenants moving into new space will continue
to do so at this “generous” level of space allocation in the short-term, especially in light of the high rental rates that are currently
being commanded in Calgary.
¾
@ 250 square feet per employee – this scenario utilizes a number that is consistent with the 10-year historic average in the
Calgary Market. Through our consultations with real estate representatives, this level of space utilization is generally consistent
with their expectations of future market need. Under this scenario we forecast that the Calgary office market will require nearly 49
million square feet to accommodate the employment and economic growth in the Calgary market. At this level we believe that
Calgary’s market would return to more normal conditions, with overall vacancy rate trending back toward 15% by 2010 assuming
all development in the pipeline is realized.
¾
@ 225 square feet per employee – this scenario utilizes a space factor that has not yet been achieved in the Calgary market.
For short-term planning purpose the achievement of this utilization rate would appear unlikely given current pent-up demand
conditions. Interestingly, the use of this target does suggest that the existing Calgary office inventory could theoretically
accommodate the amount of new office jobs created between 2006 and 2010, but this would require major retrofits of space to
achieve this level of space compression.
Assuming all developers deliver their projects as scheduled
urbanMetrics inc.
market, economic and strategic advisors
29
Calgary Office Market Forecast, 2006-2025
Figure 3.6 Office Space Forecast (2006-2010)
Employment Method
Millions
Square Footage
Historic
Forecast
60
57.4 M
55
53.7 M @ 275sf/emp
50
48.9 M @ 250 sf/emp
45
44.0 M @ 225 sf/emp
40
`
35
10
09
20
08
20
07
20
06
20
05
20
04
20
03
20
02
20
01
20
00
20
99
20
98
19
97
19
96
19
95
Occupied Space (total)
Inventory
Occupied Space (275SF/Employee)
19
94
19
93
19
92
19
91
19
90
19
89
19
88
19
87
19
86
19
19
19
85
30
Inventory (2006-2010)
Occupied Space (250SF/Employee)
Occupied Space (225SF/Employee)
Sources: urbanMetrics forecast. Historic information supplied by CBRE
urbanMetrics inc.
market, economic and strategic advisors
30
Calgary Office Market Forecast, 2006-2025
3.3
Comparison of Short-Term Office Demand Forecasts (Econometrics vs. Employment)
Figure 3.7 summarizes the econometrics and employment based.
Figure 3.7 Forecast Office Occupied Space 2006-2010 in Calgary
(in million square feet)
Econometric Method
2005 (1
2006
2007
2008
2009
2010
43.4
44.4
44.7
45.0
45.2
45.5
Employment Method
@ 225 SF per
Employee
43.4
40.3
41.3
42.2
43.1
44.0
@ 250 SF per
Employee
43.4
44.8
45.8
46.9
47.9
48.9
@ 275 SF per
Employee
43.4
49.3
50.4
51.6
52.7
53.7
Source: urbanMetrics inc.
1) Supplied by CBRE, Q4 2005
Based on our review of the data inputs and their limitations, we would advocate that the employment method, utilizing the 250
square feet per employee ratio, applied to a total net growth in the office employment (i.e. 25,000 worker) provides the most
“realistic” expectation of future market demand for office space in Calgary over the 2006-2010 period. This suggests that 49 million
square feet of space will be needed (and occupied) in 2010, leaving an additional 15% of space vacant for on-going market
consideration.
urbanMetrics inc.
market, economic and strategic advisors
31
Calgary Office Market Forecast, 2006-2025
3.4
Geographical Allocation of Office Demand over the Short Term, 2006-2010
Unlike most of other major North American metropolitan areas, Calgary’s office market has remained firmly entrenched in its central area.
As we have previously discussed, Calgary’s commercial office market is heavily dominated by firms that are directly or indirectly connected to
the energy sector. Energy companies in Calgary have historically demonstrated a deep, symbolic commitment to the city’s downtown core.
The presence of several industry clubs and organizations (such as the Calgary Petroleum Club, the Canadian Association Petroleum
Producers, and the Petroleum Services Association of Canada) are often cited as the key locational drivers explaining the city’s strong corearea focus. The Calgary TELUS Convention Centre and a strong concentration of hotels with meeting and conference facilities also make it
easy for workers to stay connected with their clients, professional affiliations, and attend educational sessions all within walking distance of
their offices.
While such organizations and facilities are undoubtedly important - especially among managers and senior decision makers - it cannot be
overlooked that downtown Calgary is actually located at the physical center of the larger economic region it serves. The orientation of its entire
road, highway and public transit system provides strong “radial’ access, enabling commuters to easily reach the downtown core from all
directions. Calgary does not presently have a major “highway by-pass” or “ring-road” system. While we understand that major transportation
corridors are currently being planned across the northern, southern and eastern-edges of the city, these improvements will not materially
impact office demand patterns over the next 5 years.18
Record levels of economic growth are however now having a direct impact on the rental premiums being commanded for downtown office
space. In turn, the market is forcing some companies to rethink their real estate options going forward. Over time we anticipate that there will
be a number of factors that push development outwards, creating increased demand for suburban office product in the future. However, it is
our opinion, based on our understanding of existing and future growth patterns, that the introduction of a “ring-road” will not likely stimulate any
new major business parks in Calgary for the foreseeable future. The prevalence of major land development opportunities that already exist in
more central area locations (i.e. vacant sites and parking lots), or redevelopment sites which can (and should) be better utilized along existing
18
“Highway By-Passes”, “Perimeter Highways” and “Ring Roads” have been demonstrated to have a positive impact on the stimulation of suburban office formation. Highway
407 in the Greater Toronto Area, for example has helped to accelerate the development of major suburban office nodes in areas such as Mississauga, Markham and Richmond
Hill.
urbanMetrics inc.
market, economic and strategic advisors
32
Calgary Office Market Forecast, 2006-2025
transit and transportation corridors, will act as a control lever on future commercial/office land – particularly on at outer edges of City’s urban
boundary.
The following sub-sections provide a summary of each of Calgary’s office nodes. A discussion of how future (short-term) growth will be
distributed among these areas is provided in Section 3.5.
3.4.1 Downtown
Approximately two-thirds of all current and committed office development is situated Downtown. If an appropriate balance is to be maintained,
there will be pressure on under-utilized Downtown and Beltline sites, and possibly some degree of land-use competition for sites between
residential and office uses.
Demand from both junior and large cap energy players and their financial and business services will continue to drive downtown growth in the
foreseeable future. These firms seek to locate near their competitors, clients and investors. Indeed, increased business activity in the oil and
gas sector has led to increased space demand by financial services companies in the banking and corporate finance sectors. Also, some
traditionally suburban consulting and engineering tenants have migrated to the downtown market. However, with such a low vacancy rate the
completion of development projects in the pipeline cannot occur quickly enough. As a consequence, space is scarce. As demand continues to
escalate, it is becoming increasingly difficult, if not impossible, to find large pockets of contiguous space in the central area without contractual
manoeuvrings and careful landlord/broker/tenant negations.
3.4.2 Beltline
The Beltline office inventory tends to serve a different market need from downtown supply with a number of older low-rise buildings, some with
attractive architectural character, that attract a range of professional services and utility companies. Traditionally, the Beltline has not attracted
large, ‘corporate’ energy companies. There is some indication that this trend is now changing as the beltline becomes a desirable business
address. Among the many reasons that tenants are attracted to this market include: better parking rates (and ratios) than downtown,
increased choices of character space, reduced rental overhead, more convenient access and egress and a good range of noon-time and
after-work amenities. The Beltline has seen a rise in leasing activity particularly from insurance companies, software firms, designers,
architects and professional service providers which like to be close to the downtown core, but don’t necessarily require immediate access. In
essence, the Beltline is a ‘smaller’ tenant market. Recently, the Beltline has seen a significant level of re-investment in existing building stock
urbanMetrics inc.
market, economic and strategic advisors
33
Calgary Office Market Forecast, 2006-2025
as well as a number of new projects that have helped revamp the image of the Beltline region as an important business centre. This trend is
anticipated to continue in the foreseeable future. Developers and landlords in the Beltline have reacted quickly to current market conditions in
the downtown by providing the market with high quality/lower cost space alternatives, enabling companies to transition into this district from
downtown quite easily without any major disruptions.
3.4.3 Suburban
The nature of the office market in suburban Calgary is quite different from that of the central core. The downtown more closely approximates a
single market, with most construction taking place in the central business district. Most office buildings are high-rise, and most are fairly good
substitutes for one another, so that a single market rent and vacancy rate can be used to characterize the market. The suburban market, on
the other hand, is more dispersed and more diverse in terms of product.
The tight downtown market is causing some companies to consider lower cost options outside the core. Demand for office space in the
suburbs continues to grow because of its accessibility, space availability and parking. Over the next five years, we anticipate that most of the
take-up of office space in the suburbs is likely to come from non-energy companies who get pushed out from the downtown due to increased
rental rates. The most significant segments of the market that have opted for suburban office parks have been those engaged in the
engineering and technology sectors, as well as medical and small professional service tenants.
The following discussion summarizes the make up of office activity within Calgary’s four suburban quadrants:
Southwest
The Southwest quadrant of Calgary constitutes the oldest industrial area of the city. Comprised mostly of light industrial uses (e.g. along
Blackfoot Trail), redevelopment is expected to consist of commercial services, offices, retail and non-industrial uses. Also, excellent public
transit near Macleod Trail provides a strong level of employee access, and makes it a strong candidate for future office developments. In last
few years, the Southwest office market has been driven largely by the engineering sector. According to Colliers International19, nearly all of the
larger lease transactions that occurred in this submarket were attributed to tenant in this category. Other tenants who are considering
19
Colliers International, Jan 2005
urbanMetrics inc.
market, economic and strategic advisors
34
Calgary Office Market Forecast, 2006-2025
expansion into this area include business and personal service industries such as financial planning and insurance companies which either
depend on residential based customers, or act as “back office” operations supporting other business units.
Southeast
The Southeast provides strong access to Deerfoot Trail/Highway 2 and g Highway 1. This section of the City accommodates most of the city’s
heavy industries. In the future, it will retain its role as the city’s industrial heart, and for this reason offers limited opportunity for new office
development.
Northeast
Much of Calgary’s northeast is subject to the Calgary Airport Vicinity Protection Areas Regulation that essentially predetermines nonresidential uses on those lands. The Northeast sector benefits from access to Deerfoot Trail/Highway 2 and the Calgary International Airport
and offers excellent access to suburban labour markets. The area is characterised by a mix of office and multi-tenant warehouse buildings.
Since 1999, a number of high-profile businesses have moved into the Northeast, and have helped to expand the area’s profile as a business
centre increasing the area’s prestige.
The Northeast Industrial Area is expected to continue to attract strong business growth because it offers a number of large, serviced parcels.
The Northeast has also attracted several large office users including: high-tech training firms, software developers, couriers and business
support companies.
Northwest
Large areas of urban development are not expected in this area beyond 2020. It is likely that much of the development in this sector during the
next twenty years will be dominated by retail or non-industrial uses. The northwest office market best supports small professionals firms,
software start-ups and community services. This is a highly fragmented market-place where the typical office size ranges from five hundred to
four thousand square feet in area. Also, the relatively small pocket of offices in the northwest (near the University of Calgary) attracts
professional firms and service based operations.
urbanMetrics inc.
market, economic and strategic advisors
35
Calgary Office Market Forecast, 2006-2025
In Figure 3.8 we have developed a market assessment relative to the allocation of demand over the short term between the downtown,
beltline and suburban sub-markets. The geographic allocation of demand is based on a preferred growth scenario (i.e employment based
forecasts @ 250 square feet per office employee) that will see a total of 5.4 million square feet of office space absorbed between 2006
and 2010.
Figure 3.8 Allocation of the Demand by Office Submarket
(in thousand square feet)
Start
New Supply
Inventory (1 Completed
2006
2007
2008
2009
2010
31,204
31,204
32,756
34,525
36,972
1,552
1,770
2,447
2,600
2006
2007
2008
2009
2010
3,749
3,773
4,321
4,771
4,771
24
547
450
-
2006
2007
2008
2009
2010
10,195
10,689
11,303
12,841
12,916
495
614
1,538
75
150
2006
2007
2008
2009
2010
45,148
45,667
48,379
52,136
54,658
519
2,713
3,757
2,522
2,750
Net
End
Absorption Inventory
Downtown
354
31,204
932
32,756
730
34,525
691
36,972
39,572
442
Beltline
109
3,773
81
4,321
84
4,771
80
4,771
4,771
79
Suburbs
890
10,689
5
11,303
236
12,841
12,916
224
13,066
467
TOTAL
1,354
45,667
1,018
48,379
1,051
52,136
995
54,658
57,408
988
Occupied
Space
% of Total
Inventory
30,913
31,845
32,575
33,266
33,709
68.3%
67.7%
66.2%
67.6%
68.9%
3,584
3,666
3,750
3,829
3,908
8.3%
8.9%
9.2%
8.7%
8.3%
10,304
10,309
10,546
10,770
11,236
23.4%
23.4%
24.6%
23.6%
22.8%
44,802
45,820
46,871
47,865
48,853
100.0%
100.0%
100.0%
100.0%
100.0%
Source: urbanMetrics inc.
1) Start Inventory for 2006 based on CBRE Q4 2005 data.
urbanMetrics inc.
market, economic and strategic advisors
36
Calgary Office Market Forecast, 2006-2025
Key observations regarding the short-term demand analysis contained in the figure above, suggest that:
1. Downtown Calgary will continue to act as a magnet for office based employment demand in the short-term. The delivery of new office
space, beginning in 2007 should see absorption levels spike in excess of 930,000 square feet, moderating in 2008 and 2009 and,
finally settling back to 440,000 square feet in 2010. By the end of the forecast period the downtown is estimated to have some 33.7
million square feet of occupied space. Over the next five years, the downtown will see its total share of the inventory increase by a
total of 1%, moving from 68% to 69% of the total market.
2. The Beltline will see a number of new office projects added, such as: IBM Buildings B and C, and Genco Place. These projects will
markedly increase both inventory and absorption levels in 2006 and 2007. Beyond 2006, however, demand for space in the Beltline
will return to the 80,000 square feet per year level to the end of the 2010 forecast period. Based on our assessment, the Beltline will
continue to represent between 8% and 9% of Calgary’s overall office market.
3. The suburbs are anticipated to see an extremely strong year in 2006, with an estimated demand for space falling just short of 900,000
square feet. This expected bump is a function of limited space availability within the Downtown and Beltline markets, as well as
tenants leaving the downtown in search of less costly options in suburban buildings. It is anticipated that 2007 will see a dramatic
reversal of activity as a number of new downtown projects begin to enter the market, and tenants begin to back-fill the space that is
temporary returned to the market. Over the 2008 to 2010 period absorption levels are expected to edge back to the 250,000 to
460,000 square foot levels.
3.5
Geographical Allocation of New Office Supply, 2006-2010
Given the complexity of delivering an office project greater than 20,000 square feet, we have assumed that any new proposals at this stage
would not be able to receive municipal approvals, financing (pre-lease commitments), construction tendering and completion within a five-year
development horizon. The exception to this, of course, would be a new a design-build facility catering specifically to the needs of a single enduser, such as a major corporate headquarter relocation.
urbanMetrics inc.
market, economic and strategic advisors
37
Calgary Office Market Forecast, 2006-2025
Assuming that all projects can proceed as planned
before 2010, the development community is
preparing to deliver an estimated 12.3 million
square feet to the market. This volume of space
represents a 27% increase to the existing total
inventory base of 45.1 million square feet.
Figure 3.9 below summarizes the geographic
distribution of new space presently under
construction, or in the pre-leasing stage of
development20.
20
Figure 3.9 Calgary Cumulative New Office Supply 2006-2010
12
SF Millions
The inventory of new supply is well documented
by The City of Calgary’s Planning Department and
through regularly published quarterly office market
reports issued by the leading real estate
brokerage firms in Calgary. For the purposes of
our study, we have assumed that all known office
projects presently in the development pipeline
encompasses the absolute maximum amount of
space that could be delivered to the market before
the end of 2010. The projects are summarized in
Appendix V at the end of this report.
10
8
6
4
2
0
2006
2007
Downtown
Beltline
New Supply (Proportion of Total)
Market
Sector
Downtown
Beltline
Suburban Northeast
Northwest
South
Suburban Total
Source: urbanMetrics inc.
2006
0%
5%
30%
0%
65%
95%
2008
2009
Northeast
2007
57%
20%
0%
4%
19%
23%
2008
14%
20%
22%
0%
45%
67%
Northwest
2009
90%
0%
10%
0%
0%
10%
2010
South
2010 Grand Total
84%
47%
0%
14%
0%
10%
0%
1%
16%
28%
39%
16%
The reader should note that this also includes the new EnCana Centre, which was announced at the end of 2005, but has not yet received a development permit.
urbanMetrics inc.
market, economic and strategic advisors
38
Calgary Office Market Forecast, 2006-2025
Our short-term supply assessment provides the following market observations:
1. Downtown Calgary constitutes nearly half (47%) of all new space under consideration in the city. The dominance of the downtown is
strongly reinforced toward the end of the forecast period, as new buildings such as the 1.7 million square feet Penny Lane project and
the 1.8 million square feet the EnCana Centre are delivered to the market. In total, there are 13 active office developments in the
downtown, representing an estimate 8.4 million square feet of new office in the market.
2. The delivery of new office space in the Beltline will occur in the first three years of the forecast period. We do not anticipate that any
new product will come on stream in 2009 or 2010. Overall, the Beltline represents approximately 15% of total amount of new space
under consideration in Calgary. In total, there are 6 active office buildings under consideration in the Beltline ranging in size from
approximately 25,000 square feet to 450,000 square feet. The median (typical) size project is approximately 140,000 square feet.
3. The suburban market is poised for significant development activity over the next five years. In total the suburbs represent
approximately 40% of all space under development or in consideration. The south-end of Calgary represents the most attractive
suburban area for development, with approximately 3.5 million square feet of new space presently under construction or in preleasing. There are presently 19 active office buildings in suburban Calgary ranging in size from 20,000 square feet to 480,000 square
feet. The median size of suburban building is 150,000 square feet. In total, eight buildings under construction are larger than 150,000
square feet.
urbanMetrics inc.
market, economic and strategic advisors
39
Calgary Office Market Forecast, 2006-2025
3.6
Reconciliation of Short-term Office Supply and Demand
Having reviewed the economic context shaping Calgary’s office market, and having prepared reasonable estimates for future demand for
office product by sub-market, Figure 3.10 below summarizes our short-term market analysis for the city by 2010.
Figure 3.10 2010 Short-Term Office Demand and Supply Reconciliation
(in thousand square feet)
2010 New Demand (1)
2010 New Supply
Downtown
3,150
8,368
Beltline
434
1,021
Suburbs
1,822
2,871
S
783
2,038
NW
273
97
NE
765
737
Calgary
5,406
12,260
Source: urbanMetrics inc.
Notes:
1) Demand scenario based on 250 square feet of office space per employee
urbanMetrics inc.
market, economic and strategic advisors
Difference
5,218
587
1,049
1,255
-176
-28
6,854
40
Calgary Office Market Forecast, 2006-2025
3.7
Conclusion
Our analysis indicates that economic growth in Calgary between 2006 and 2010 will reasonably dictate a need for approximately 5.4 million
square feet of new space. The development community has responded with formal intentions to deliver approximately 12.3 million square feet
of new space to the market, which is approximately 2 times the amount of space actually warranted by projected growth. Should all projects
move forward as planned, Calgary would likely find itself in an over supply situation by 2010, with excess office capacity of approximately 7.0
million square feet. While this level of construction may appear to over shoot demand, present conditions (i.e. lack of available, high quality
space) need to be alleviated in order to support growth and investment in Calgary. Over the short-term, we believe that the amount of new
construction, both underway and planned, is more than adequate in scale to restore the market to a more balanced level, one that will ensure
appropriate opportunities for landlords, tenants and prospective new companies alike.
urbanMetrics inc.
market, economic and strategic advisors
41
Calgary Office Market Forecast, 2006-2025
4
Long-term Office Demand Forecast, 2006-2025
This section of the report presents our long-term office demand projections for Calgary, and its various submarkets, for the next 20 years. Our
analysis is based on the following assumptions.
1. Office Employment: urbanMetrics utilized Alberta Human Resources & Employment (AHRE) employment forecasts (2006-2010) to
determine the number of office workers and uses Calgary Corporate Economics’ employment growth for the long-term projections. Based
on the underlying assumption of an increasing share of office employment relative to total employment, a conservative 0.5% increase
annually was added to the total employment growth projected21. This increase boosts the share of office jobs in Calgary from 32% in 2005,
to 35% in 2025, which we believe is a conservative estimate of the long-range growth in office employment.
2. Office Workers: Due to the fact that not all of the workers considered above will need office space (i.e. telecommuting), we excluded a
portion from the total, considering only employees working in office buildings larger than 20,000 square feet. As an increasing number of
people are opting to work from home, we have estimated that the ratio of office workers requiring office space will decline modestly over
time22.
3. Space Allocation per Employee: According to our estimates there was approximately 250 square feet of occupied space per office
worker in Calgary in 2005. We consider two scenarios regarding future trends:
i.
Enhanced Space Utilization: The amount of office space allocated to each worker will gradually decline to 225 square feet by 2025.
As discussed in section 3.3, there is currently a strong market orientation toward more efficient use of office floor plates in the
Canadian market. Over the next 20 years new office technologies should continue to drive space efficiency in much the same way
21
This growth adjustment reflects changes in the composition of the workforce (e.g. a greater share of office employment in proportion to the total employment). In Calgary,
AHRE forecasts above average growth rates for the following groups: FIRE, Professional, Technical and Management and Trade.
22
Based on past trends in the number of employees “working at home” from Statistics Canada.
urbanMetrics inc.
market, economic and strategic advisors
42
Calgary Office Market Forecast, 2006-2025
they have over the previous 2 decades. Under this assumption, we estimate that future space commitments will be dictated by
enhanced space utilization patterns, consistent with national market trends.
ii. Constant Space Utilization: Office space allocation per worker will remain stable at 250 square feet per employee over the
forecasted period. Under this assumption, Calgary companies will continue to utilize space less efficiently than in other Canadian
markets. As previously discussed, Calgary’s tenancy-base is comprised largely of corporate head offices, with minimal representation
of space intensive users such as call centres. The “constant” scenario acknowledges that Calgary will continue to be oriented toward
“corporate” rather than “routine” or administrative functions.
Figure 4.1 below summarizes the results of our two forecast scenarios. Market share assumptions have been applied in order to determine the
specific demand requirements for Calgary and its various sub-markets to the year 2025. A more detailed assessment, including the periodic
variations is included in Appendix III at the end of this report.
Figure 4.1 Total Office Demand Forecast for Calgary Sub-Markets, 2006-2025
(in Thousand Square Feet)
Occupied
(1)
Space 2005
Scenario
Base
Share
Regional
2005
Office Space Demand Share Regional Actual Change 2005- Percent Change
2025
2025
2025
2005-2025
Low
(2)
High
(3)
Low
(2)
High
(3)
Low
(2)
High
(3)
Downtown
30,559
70%
39,007
43,411
65%
8,311
12,498
27%
41%
Beltline
3,475
8%
5,410
6,011
9%
1,843
2,427
53%
70%
Suburbs
9,414
22%
15,628
17,364
26%
5,375
7,060
57%
75%
S
4,048
9%
6,720
7,467
11%
2,311
3,036
57%
75%
NW
1,412
3%
2,344
2,605
4%
806
1,059
57%
75%
NE
3,954
9%
5,564
7,293
11%
2,257
2,965
57%
75%
Calgary
43,448
100%
60,045
66,786
100%
15,529
21,985
48%
51%
Source: urbanMetrics inc.
(1) CBRE Q4 2005
(2) Enhanced demand scenario based on a declining utilization rate from 250 sf/employee in 2006 to 225 sf/employee by 2025
(3) Constant demand scenario based on a utilization rate of 250 sf/employee over the forecast period
urbanMetrics inc.
market, economic and strategic advisors
Share of
Region
Change
2005-2025
54%
12%
35%
15%
5%
15%
100%
43
Calgary Office Market Forecast, 2006-2025
The results of our long-term forecast for office demand in Calgary suggest that:
1. Calgary would experience a significant increase in the demand for office space by 2025. Our estimate suggests that in 2025 the
market would demand a total of 60.1 to 66.8 million square feet, an increase of 15.5 to 22.0 million square (or 34 to 49%) over current
levels.
2. Although employment growth in Calgary is anticipated to be moderate after 2015, demand for office space will continue to show a
marginal increase due to a increasing share of office jobs relative to total employment.
3. Our long-term office demand forecasts appear to be in-line with previous studies regarding the long range outlook for Calgary’s office
market. The differences between the findings partially lie in the methodology used, and to some extent, the distinctly less favourable
economic conditions prevailing at the time that those reports were produced. A comparison of analyst’s reports is provided in
Appendix IV at the end of this report.
The following sections below highlight the distribution of long-range demand by Calgary’s sub-market.
4.1
Downtown Long-Term Demand, 2006-2025
1. We estimate that the forecast demand in 2025 would total 39.1 to 43.4 million square feet, an increase of 8.3 to 12.5 million square
feet (or 27 to 40%) over 2005.
2. In the short-term (2005-2010) the downtown share of the entire office market should stay fairly high (70%).
3. Over the long-term (2011-2025), the increasing desirability of suburban locations will gradually reduce the downtown share of demand
to an estimated 65%. It is important to bear in mind that this ratio remains well-above the office concentration currently found in other
major office-oriented cities such as Toronto, Ottawa and Edmonton.
urbanMetrics inc.
market, economic and strategic advisors
44
Calgary Office Market Forecast, 2006-2025
4.2
Beltline Long-Term Demand, 2006-2025
1. We estimate that office demand in the Beltline in 2025 would total 5.4 to 6.0 million square feet, an increase of 1.8 to 2.4 million
square feet (50-66%) over current inventories.
2. We believe the Beltline will benefit from the spill-over demand in the downtown core, although we acknowledge that the share of total
market demand should remain relatively stable at 8 to 9% over the long-term. Our market outlook for the Beltline suggest that this
market will continue to remain a distinct office node, rather than a physical extension of the downtown office core.
3. Over the long-term, competitive demand for office space in the Beltline will be dictated by the integration of new LRT services as
proposed. Currently, the Beltline is not well-served by public transit.
4.3
Suburban Long-Term Demand, 2006-2025
1. We estimate that the forecast demand for 2025 would total 15.6 to 17.4 million square feet, an increase of 5.4 to 7.1 million square
feet (or 52 to 69%) over current levels.
2. As Calgary continues to expand in size, the ratio of employment outside the core is anticipated to increase. The proportion of occupied
space in the suburbs as a component of the entire market should increase from 22% in 2005 to about 26% in 2025. Indeed, our
demand forecast is projecting substantial growth (in percentage terms) for office space in the suburban markets. Nevertheless, in
absolute terms, this growth would be lower than the amount forecasted for Downtown.
Our forecasts by sub-market are based on current 2005 shares as follows: Northwest 15%; Northeast 42% and South 43%. We have
assumed that these shares will remain constant over the 2006-2025 forecast period. Applying these shares to our two forecast scenarios,
the Suburban submarkets, are summarized below.
•
Northwest – We estimate that the forecast demand in 2025 would total 2.3 to 2.6 million square feet, an increase of 0.8 to 1.1
million square feet over current levels. Marginal demand for sites exists along Crowchild Trail and lands adjacent to the University
of Calgary. Office development in the Calgary’s Northwest market will be strongly influenced by the presence of public institutions
(e.g. SAIT Polytechnic, University of Calgary, Alberta Children Hospital) and will remain focused on local services and
urbanMetrics inc.
market, economic and strategic advisors
45
Calgary Office Market Forecast, 2006-2025
professional office space. Our forecasts have imbedded in them the opportunity for additional office-based research facilities
within the UofC business/research park.
4.4
•
Northeast - We estimate that the forecast demand in 2025 would total 6.6 to 7.3 million square feet, an increase of 2.3 to 3.0
million square feet over current levels. Demand for space within this sub-market will gravitate toward greenfield and
redevelopment opportunities along Deerfoot Trail, Barlow Trail and within the numerous business parks around the airport,
particularly those well served by existing LRT stations. The airport is expected to play a strong anchor role in attracting and
retaining office users to the area.
•
South - We estimate that the forecast demand in 2025 would total 6.7 to 7.5 million square feet, an increase of 2.3 to 3.0 million
square feet over current levels. The South end of Calgary is anticipated to attract firms seeking access to major thoroughfares
(e.g. Macleod and Deerfoot Trail) and good public transit access (LRT). Demand is anticipated to follow in the footsteps of several
large space users, such as Agrium and Fluor that have recently established a presence in this market. Demand, as we will see in
Section 5, is well served by a range of real estate options, including numerous high profile/high exposure greenfield and
redevelopment sites that are well-served by public transit.
Conclusions
The following conclusions are drawn for our analysis of long term office demand in Calgary:
1. Overall, the city of Calgary will experience market demand patterns consistent with those over the past decade. Between 2006 and
2025 annual office demand is forecasted between 800,000 and 1.3 million square feet.
2. Downtown Calgary will continue to be the most sought after market representing about 50% to 65% of total demand. Between 2006
and 2025, downtown is anticipated to achieve annual demand patterns ranging between 400,000 to 650,000 square feet per year.
3. The Beltline is anticipated to continue to grow at a rate consistent with its 10 year historic average. Between 2006 and 2025 the
Beltline is anticipated to represent about 10% of long range demand. On an annual basis the Beltline is anticipated to see average
annual demand patterns ranging between 90,000 to 140,000 square feet per year.
urbanMetrics inc.
market, economic and strategic advisors
46
Calgary Office Market Forecast, 2006-2025
4. The suburban market is poised to see significant growth over the long-term. On average, our forecasts suggest that suburban Calgary
will account for 30% to 40% of annual growth. On an absolute basis, we are forecasting that the suburbs will track at (or near) current
patterns over the next decade, ranging between 270,000 to 330,000 square feet per year. Beyond 2016 we anticipate to see this level
edge upward to an estimated 350,000 to 460,000 square feet per year as a result of diminished development opportunities in the
downtown and beltine areas, and on-going opportunities to capitalize on future suburban infrastructure improvements such as LRT,
highway and roadway capacity expansion.
Figure 4.2 Office Space Net Absorption per Year
(in thousand square feet)
Downtown
Beltline
Suburban
Total
628
115
388
1131
Low (2)
444
90
268
802
High (3)
628
113
332
1073
407
103
353
863
High
657
140
Source: urbanMetrics inc.
(1) Historic data is based on information provided by CBRE
463
1260
Historic
(1)
5 Yr Trend: 2001-2005
Forecast
2006-2015
2016-2025
Low
(2)
(3)
(2) Enhanced demand scenario based on a declining utilization rate from 250 sf/employee in
2006 to 225 sf/employee by 2025
(3) Constant demand scenario based on a utilization rate of 250 sf/employee over the
forecast period
urbanMetrics inc.
market, economic and strategic advisors
47
Calgary Office Market Forecast, 2006-2025
5
Long-term Office Supply Analysis, 2011-2025
In light of our market demand calculations contained in the previous section, which estimate a total need for between 15 to 22 million square
feet of additional office space over the next 20 years, the supply analysis undertaken and discussed in this section is intended to “test”
whether Calgary’s existing commercial land base has the physical capacity to support the anticipated volume of employment growth.
The reconciliation of long-term supply and demand at the end of this section is intended to help inform future policy decisions regarding the
adequacy of the City’s existing land base, and should provide some level of guidance to the development community regarding long-term
market potential.
5.1
Methodology
The following discussion describes the process for preparing our assessment of potential development sites in Calgary (Steps 1 to 3), and the
conversion of these sites into measurements of leasable office space (Step 4 and 5).
STEP 1: In the short-term analysis we compiled a list of all office developments either under construction or in pre-leasing stages. These
project, which comprise a total 12.3 million square feet, are assumed to have a 2010 delivery date23.
STEP 2: Based on the market overview findings of previous sections we have identified areas where office construction is likely to occur in
the next twenty years. A total of 26 office nodes were identified for a total of 157 sites (See Appendix VI for full details).
STEP 3: In each of the areas we examined, sites with long-range office development potential were identified. The following site
characteristics were required in order to meet the basic definition of a site with long-range office development potential:
23
See Appendix V for details.
urbanMetrics inc.
market, economic and strategic advisors
48
Calgary Office Market Forecast, 2006-2025
¾
The existing uses allow immediate potential development (i.e. vacant sites) OR re-development of the site would eventually
be economically feasible in conjunction with the demolition of “underdeveloped” or “underutilized” uses.24
¾
Appropriate land use designations are in-place to support office development; or confidence that the land-use may be
modified to allow development of office structures in the future;
¾
The area of the site and its immediate context would permit the construction of an office building of at least 20,000 square
feet;
¾
No other projects are proposed or underway on the site; and
¾
Reasonable assurance on the marketability of an office development on the subject land.25
STEP 4: Similarly to the demand analysis, we consider two scenarios to determine the Gross Floor Area (GFA) on the selected sites:
¾
Low Scenario: Site area is not maximized. Assumes developer will build at 80% of maximum permitted Floor Area Ratio
(FAR) on the site.
¾
High Scenario: Site area is maximized. Assumes developer achieves 100% of the permitted FAR applicable to the site.
STEP 5: By leveraging The City’s 2006 Property Assessment database we determined the acreage and the applicable land use designation
of the sites. FARs for downtown and the beltline were evaluated based on existing zoning by-laws and in conjunction with proposed Area
Redevelopment Plans (ARPs), when applicable. In the suburbs, FARs were calculated based on information provided by The City26,
assessment data and building data provided by BOMA Calgary. The Gross Leaseable Area (GLA) was calculated as 80% of estimated GFA.
24
Underdeveloped or underutilized properties include commercial properties with 1 or 2 storeys buildings such as strip plaza, auto service stations. This process involved some
degree of professional judgement, and is based on what a reasonable investor might consider when acquiring a site for redevelopment purposes.
25
Sites which were not supported immediately by either public transit or high-capacity road infrastructures were not considered suitable for our purposes.
26
“Calgary Suburban Office Supply & Demand: Executive Summary”, City of Calgary and CARMA Developers Ltd., March 2001
urbanMetrics inc.
market, economic and strategic advisors
49
Calgary Office Market Forecast, 2006-2025
Figure 5.1 and Figure 5.2 summarize of the number of sites and the potential scale of buildings that could be realized.
Figure 5.1 GLA Potential for Calgary Sub-Markets, 2011-2025
(in Thousand Square Feet)
Number of Sites
SF GLA 1)
Downtown
Beltline
Suburbs
> 2,000
1
1,000-1,999
2
2
500-999
5
5
3
250-499
10
8
3
150-249
5
7
6
100-149
8
11
7
50-99
6
7
18
< 50
10
2
31
TOTAL
47
40
70
Source: urbanMetrics inc.
1) Based on the Low Scenario (80% of maximum permitted FAR)
TOTAL
1
4
13
21
18
26
31
43
157
Figure 5.2 GLA Potential for Calgary Sub-Markets, 2011-2025
(in Thousand Square Feet)
GLA
Low Scenario
High Scenario
1)
2)
Downtown
% of
Total
Beltline
% of
Total
Suburbs
% of Total
TOTAL
14,044
41%
10,429
30%
9,943
29%
34,416
21,658
46%
13,036
28%
12,630
27%
47,325
Source: urbanMetrics inc.
1) 80% of maximum permitted FAR on the site
2) 100% of maximum permitted FAR on the site
urbanMetrics inc.
market, economic and strategic advisors
50
Calgary Office Market Forecast, 2006-2025
5.2
Long Term Supply Potential, 2011-2025
The results our land supply analysis suggest that:
1. Calgary possesses an ample supply of land for office developments over the 2011 to 2025 period. A total of 34 to 47 million square
feet of office space could theoretically be built in the city of Calgary. This includes at least 4 million sq. ft. of potential future supply in
planned employment nodes. In effect, the city of Calgary could physically double its existing office space inventory on sites within the
existing urban envelope.
2. Vacant sites and surface parking lots throughout the city of Calgary represent an opportunity for the development of between 23 and
31 million square feet of new office space. These sites represent approximately two-thirds of the city build-out potential. We would
point out that the upper end of the range is consistent with the amount of office space presently found in Downtown Calgary’s core.
3. Redevelopment on underdeveloped or underutilized sites accounts for between 11 and 16 million square feet of office space.
4. Most of the potential development sites in the Downtown and the Beltline allow for office buildings in excess of 100,000 square feet.
5. Potential sites identified in the suburbs provide for a lower office development potential, generally below 100,000 square feet.
6. Each of Calgary’s sub-markets allows for a good range of development to be completed during the forecast period.
7. The typical office development sites in Calgary exhibits the following characteristics:
Downtown: It is currently used as a surface parking lot
-
The median site area is 0.5 acres
-
The office development will be 250,000 square feet (GLA)
Beltline: It is currently used as a 1-2 storey retail building
-
The median site area is 0.7 acres
urbanMetrics inc.
market, economic and strategic advisors
51
Calgary Office Market Forecast, 2006-2025
-
The office development will be 180,000 square feet (GLA)
Suburbs: The site is currently vacant
5.3
-
The median site area is 2.75 acres
-
The office development will be 65,000 square feet (GLA)
Downtown Supply Potential, 2011-2025
Downtown Calgary has the potential to add between 14 and 22 million square feet of office space between 2011 and 2025. This
volume represents approximately one-half to two thirds of the space presently found in the Downtown. Potential development opportunities
were found within each downtown sub-market. For the purpose of our analysis the Downtown sub-markets have been defined as followed:
•
West End; from 8th to 10th Street SW
•
Midwest; from 5th to 8th Street SW
•
Central Core; from Centre Street S to 5th Street SW
•
East End; From 3rd Street SE to Centre Street S
Figure 5.3 summarizes the Potential office space that could be accommodated on underutilized sites in the downtown core.
Figure 5.3 GLA Potential for Downtown, 2011-2025
(GLA in Thousand Square Feet)
West End
GLA Low Scenario
1)
2)
3,240
GLA High Scenario
4,786
# of Sites
15
Source: urbanMetrics inc.
1) 80% of maximum permitted FAR
2) 100% of maximum permitted FAR
% of
Total
Midwest
% of
Total
Central
Core
% of
Total
East End
% of
Total
TOTAL
23%
5,479
39%
4,436
32%
2,056
15%
14,044
22%
32%
6,886
11
32%
23%
5,545
13
26%
28%
4,499
8
21%
17%
21,658
47
urbanMetrics inc.
market, economic and strategic advisors
52
Calgary Office Market Forecast, 2006-2025
5.4
¾
If fully built out, Downtown Calgary has the potential of containing over 60 million square feet of office space27.
¾
The concentration of office space is expected to remain strongest within the central core sub-market. We anticipate that this submarket will be the first to achieve build-out. It is also where most of the office projects currently in the development pipeline are
located.
¾
Surface parking lots comprise the vast majority of potential sites in the downtown Calgary. In total, 31 out of 47 sites are currently
utilized for surface parking. While most of the large privately owned surface parking lots in the north part of Downtown are intended
for high-density residential use, several large parking south of 5th Avenue SW are anticipated to be better utilized in the future, and
could include a significant amount of new office development.
Beltline Supply Potential, 2011-2025
The Beltline has physical potential to accommodate about 3 times the amount of office space that presently exists in the area. The
majority of sites that demonstrate long-term office potential are currently underutilized retail and auto-oriented commercial buildings such as
car washes and vehicle repair centres. Figure 5.4 summarizes our potential office build-out scenario in 2025, which provides for 10 to 13
million square feet of potential new office space over the 2011 to 2025 period.
Figure 5.4 GLA Potential for the Beltline, 2011-2025
(in Thousand Square Feet)
Current Uses
Vacant
1)
GLA Low Scenario
861,368
2)
GLA High Scenario
1,076,710
1
Number of Sites
Source: urbanMetrics inc.
1) 80% of maximum permitted FAR
2) 100% of maximum permitted FAR
27
Underutilized
Surface Parking Lots
6,804,327
8,505,409
25
2,763,221
3,454,026
14
TOTAL
10,428,916
13,036,146
40
This represents existing, pipeline and potential space.
urbanMetrics inc.
market, economic and strategic advisors
53
Calgary Office Market Forecast, 2006-2025
¾
Most of the potential for office development is situated along 10th & 11th Avenues SW. Although some sites on 8th Street SW
and Macleod Trail were also identified as potential candidate sites, future office projects will generally be concentrated in the north
part of the Beltline, maximizing its physical connection to the downtown core.
¾
The scale of the projects in the Beltline will be more modest than in Downtown. Due to its proximity to residential areas,
proposed land use by-law amendments for the Beltline will limit commercial development to a maximum FAR of 8 (compared to 20 in
some cases Downtown).
5.5
Suburban Supply Potential, 2011-2025
Our assessment of suburban sites that demonstrate long-term office development potential suggests the following:
28
¾
The suburbs have the potential to accommodate approximately twice the amount of space that presently exists in the market.
Between 2011 and 2025, the 70 suburban sites identified could accommodate between 10 and 13 million square feet of additional
space28.
¾
In recent years, limited demand for suburban office space has generally slowed the pace of new office building construction in
Calgary’s suburbs. We anticipate that this trend will be reversed as downtown rent premiums push tenants to lower cost space
options, and as new corporate offices are established in Calgary to serve its burgeoning economy.
¾
Overall, we anticipate that property developers in Calgary are likely to maintain their clear preference for office projects in the east part
of the city, despite The City’s employment objectives that target a greater share of jobs in the west portion of the city.29
Appendix VII provides more details regarding the areas that allow long-range office development potential.
29
The City of Calgary’s Employment Centre Strategy, 1999 addressed a policy intent to see a more evenly distributed employment base across the city. Implementation of this
policy has proven to be exceedingly difficult, as demand from retail interests currently exceeds demand from office-based interests within Calgary’s planned commercial nodes.
Regrettably many sites that are well served by rapid-transit already have been absorbed by space extensive retail uses. It is unlikely that any of these sites will be re-developed
for more intensive office uses within the next 20 years.
urbanMetrics inc.
market, economic and strategic advisors
54
Calgary Office Market Forecast, 2006-2025
Figure 5.5 below and the following subsections summarize the scale and geographic distribution of potential office supply in the suburbs over
the 2011 and 2025 forecast period.
Figure 5.5 GLA Potential for Calgary Suburban Sub-Markets, 2011-2025
(in Thousand Square Feet)
Potential Supply 2011-2025
Inventory
2005 1)
4,466
South
1,464
Northwest
4,265
Northeast
TOTAL
10,195
Sources: urbanMetrics inc.
1) CBRE Q4 2005
2) 80% of maximum permitted FAR
3) 100% of maximum permitted FAR
Sub-Market
Sites
37
5
28
70
% of
Total
53%
7%
40%
100%
GLA
Low 2)
5,627
1,321
2,995
9,943
% of
Total
57%
13%
30%
100%
GLA
High 3)
6,993
1,810
3,887
12,690
% of
Total
55%
14%
31%
100%
5.5.1 South Quadrant
¾
In the South end of Calgary, office development will mostly occur in development nodes and corridors along major thoroughfares such
as Macleod Trail, Glenmore Trail, Deerfoot Trail, Blackfoot Trail and Highway 22X.
¾
Based on our assessment of sites, a total of 5.6 to 7.0 million square feet of additional office space could be built on vacant and
underutilized sites over the 2011 to 2025, if warranted by market demand. With nearly 40 sites, the South End of Calgary has the
greatest potential to play a significant part of the city’s future office market.
¾
We anticipate increasing development in proximity to LRT stations and major intersections along Macleod Trail. Although LRT related
projects have been slow to develop, The City of Calgary intends to encourage further intensification of development around key
urbanMetrics inc.
market, economic and strategic advisors
55
Calgary Office Market Forecast, 2006-2025
stations. The areas that we believe should receive most of the attention include: 39th Avenue, Anderson, Canyon Meadows, Chinook,
Shawnessy, Heritage and Southland. It must also be acknowledged that the Macleod Trail corridor, although already heavily
congested, offers unique, city-wide access supported and strengthened by the retail and service commercial amenities found in and
around the Chinook Centre.
¾
New corporate office campuses will provide significant supply to the suburban south market; these areas will combine other land uses
(i.e. residential and recreational) and are anticipated to account for approximately 20% of the total supply in the sub-market.
¾
The City’s Policy Development Areas (PDAs) should generate interest and attract future office construction. These areas, which are
intended to alleviate a portion of the vehicle traffic on the major roads, are generally located at the edges of Calgary adjacent to
evolving residential communities. Considered by municipal planners as, ‘future employment areas to accommodate the city growth’,
the land in these areas is, in fact, mostly owned by The City of Calgary. As the city’s land supply diminishes the market will eventually
respond through property acquisitions to build additional office buildings. For instance, in the Southeast Employment Centre (located
at Deerfoot Trail and Highway 22X) land availability could support up to 1 million square feet of new office space. Other notable policy
areas such as the Southwest Community “A” Employment Centre, however, have not been considered in our analysis because
development is not anticipated within our forecast period.
5.5.2 Northwest Quadrant
¾
The Northwest quadrant is anticipated to increase its share of the city’s office market, although we do not expect that this will
represent a significant portion of total space on a city-wide basis.
¾
In total, we estimate that the 5 potential office development sites in the northwest quadrant of Calgary could accommodate 1.3 to 1.8
million sq. ft. of additional office space.
urbanMetrics inc.
market, economic and strategic advisors
56
Calgary Office Market Forecast, 2006-2025
¾
The Aurora Business Park (located west of Deerfoot Trail and north of Beddington Trail) is anticipated to become a major suburban
employment centre that could physically accommodate over 1 million square feet of office space. The future business park is being
positioned by The City as one of the “last large undeveloped parcels suitable for business near Calgary International Airport”30.
¾
The University of Calgary Research District will likely provide more opportunities for development in the future. We estimate that
approximately 500,000 square feet of additional Research and Development-oriented office space could be accommodated in this
business park over the 2011-2025 period.
5.5.3 Northeast Quadrant
30
¾
The Northeast area of Calgary will continue to be a strong market, supporting demand for future office space in close proximity to the
airport and Deerfoot Trail.
¾
In total, we estimate the Northeast Calgary has the potential to add some 3.0-3.9 million square feet of office space over the long-term
forecast period.
¾
We anticipate that Franklin, Sunridge, McCall and Horizon business parks exhibit the strongest market potential, and will likely see
office buildings replace a number of underutilized industrial and service-commercial sites. Unlike other areas, these business parks
have developed with limited retail encroachment. Overall, we estimate that these established areas have the physical capacity to see
at least 700,000 square feet of new office space added.
¾
Over the long term we anticipate future expansion of office activities along Barlow Trail and McKnight Avenue. These corridors could
accommodate an additional 300,000 square feet of office space.
¾
Stoney Industrial Area could physically accommodate about 1 million square feet of office space in the next twenty years. This area is
anticipated to become a major suburban employment centre that has excellent access to Deerfoot Trail and Calgary International
Airport.
City of Calgary, Corporate Properties & Buildings
urbanMetrics inc.
market, economic and strategic advisors
57
Calgary Office Market Forecast, 2006-2025
¾
Combined, the Barlow/Max Bell and Whitehorn LRT nodes could see their office capacity increase by at least 800,000 square feet.
The proximity of rapid transit facilities are anticipated to potentially yield above average density developments, offering excellent
access to both Memorial Road and Deerfoot Trail.
¾
The future LRT Station located on 36 Street and 64 Ave NE has the potential to support an estimated 300,000 square feet of new
office space.
urbanMetrics inc.
market, economic and strategic advisors
58
Calgary Office Market Forecast, 2006-2025
5.6
Reconciliation of Long-Term Office Supply and Demand
Figure 5.6 summarizes the short and long-term supply and demand findings. Based on our assessment of sites of potential office
development, we found that between 34 and 47 million square feet of office space could be added to Calgary’s office market in the long-term
forecast period. When combined to the existing inventory and the short-term pipeline supply, the total supply that could physically be found by
2025 is estimated at 54 to 61 million square feet in the Downtown, 15 to 18 million square feet in the Beltline and 23 to 26 million square feet
in the suburbs. These numbers, albeit theoretical, illustrate the potential for Calgary to accommodate the forecast office space demand in the
next 20 years. We would note that in each of the sub-markets, the supply potential exceeds the demand until at least the end of the forecast
period. Thus, we can affirm that Calgary’s existing commercial land base has the physical capacity to support the anticipated growth in the
Calgary employment market.
Figure 5.6 2025 Long-Term Office Demand and Supply Reconciliation
(in Thousand Square Feet)
Current
Inventory(1)
Office
Development
Pipeline
(2006-2010)
(2)
Scenario
Downtown
Beltline
Suburbs
S
NW
NE
Total
Long-Term
Potential "New"
Supply
(2011-2025)
31,204
3,749
10,195
4,466
1,464
4,265
45,148
8,368
1,021
2,871
2,038
97
737
12,260
Low
14,044
10,429
9,943
5,627
1,321
2,995
34,416
(3)
High
21,658
13,036
12,690
6,993
1,810
3,887
47,384
Total Potential
Office Supply
2025
(2)
(3)
Low
High
53,616 61,230
15,199 17,806
23,009 25,756
12,131 13,497
2,882
3,371
7,997
8,889
91,824 104,792
Total Office
Demand 2025
(4)
Low
39,007
5,410
15,628
6,720
2,344
5,564
60,045
(5)
High
43,411
6,011
17,364
7,467
2,605
7,293
66,786
Long Range Office
Space Surplus
(6)
Low
10,205
9,188
5,645
4,664
277
704
25,038
(7)
High
22,223
12,396
10,128
6,777
1,027
3,325
44,747
Source: urbanMetrics inc.
(1) CBRE Q4 2005
(2) 80% of maximum permitted FAR
(3) 100% of maximum permitted FAR
(4) Enhanced demand scenario based on a declining utilization rate from 250 sf/employee in 2006 to 225 sf/employee by 2025
(5) Constant demand scenario based on a utilization rate of 250 sf/employee over the forecast period
(6) Based on a demand allocation of 250 square feet per employee and long-term potential supply estimated at 80% of maximum permitted FAR
(7) Based on a demand allocation of 225 square feet per employee by 2025 and long-term potential supply estimated at 100% of maximum permitted FAR
urbanMetrics inc.
market, economic and strategic advisors
59
Calgary Office Market Forecast, 2006-2025
6
Implications of Office Forecasts
While Calgary continues to be one of the fastest growing cities in Canada, its policy and decision makers will likely find it increasingly more
difficult to manage land resources and maintain infrastructure and service capacity level at or above the level that Calgarians currently enjoy.
Based on the 20-year office demand forecasts prepared in the previous sections of the report that suggests a market need for an addition 15
to 20 million square feet of office space (which is roughly 30% to 40% more than presently found in the market), it is clear that this amount of
space will have important implications for the City Calgary and its residents and businesses. The following discussion addresses some of
these implications.
6.1
Built Form
Over the next 20 years it is safe to suggest that the amount of new space, and the number of projects delivered to the market will have a major
visual impact on the character of the city. New architecture and new landmarks are sure to transform the city’s already iconic skyline. From a
height and density perspective, however, we do not anticipate any significant deviations from the development patterns that have already
become well-entrenched. By and large, land economics will dictate intensive use of lands in the central area (ie. High-rise towers) and less
intensive uses of land in the suburbs (i.e. low to mid rise buildings supported by surface parking lots).
The supply forecasts prepared in Section 5 suggest that planning policy controls with respect to height and density (i.e. Floor Area Ratio, or
“FAR”) are adequately in-line with market demand and do not, in our opinion, provide undo restrictions or constraints on the build-out of office
in areas of the City that support development.
In terms of built form, we provide the following observations:
1. Downtown Calgary is primed for infill and intensification. Over the next 20-years we anticipate on-going build-out of surface parking
lots and underutilized sites. New office buildings in downtown Calgary will be Class A (or better), and will generally fall within the
400,000 to 800,000 square foot range.
urbanMetrics inc.
market, economic and strategic advisors
60
Calgary Office Market Forecast, 2006-2025
2. Major office projects that are presently in the planning stages, namely the EnCana Centre, Penny Lane and Centennial Place, which
are all well in excess of 1 million square feet, will likely have a limiting and controlling impact on future downtown office projects that
follow. While only a handful of remaining downtown sites could support projects in excess of 1 million square feet, we believe that
developers will likely take a more cautious and risk averse approach in order to avoid over-building the market.
3. The Beltine will maintain a strong, yet distinct character. The Beltline will continue to play an important role in the City’s office market,
providing a distinct alternative to the downtown core. The profile of tenants attracted to this area, will to some extent have an influence
on the physical form of construction. In particular, we see the Beltline becoming a more attractive location for small business,
particularly those in the creative industries, as well as professional services firms that depend on young talent to serve their client
base. From a built form perspective, we do not anticipate any major high rise office construction. Instead we anticipate low-rise office
projects with up to 10 stories, falling generally within the range of 100,000 to 400,000 square feet.
4. The suburban office park will begin to play an important role Calgary’s office market. While Calgary has generally bucked the North
American trend of suburban business parks, we believe that this product will capture a stronger foothold in the market over the 2011 –
2025 period. Generally speaking, we anticipate the construction of office buildings ranging from 100,000 square feet stand alone
buildings, to 1+ million square foot “master planned” office projects meeting the needs of a select number of large corporate users.
Developments similar in-kind to the new Agrium, Fluor and Stantec facilities should be expected to punctuate the suburban landscape
to a greater extent over the next twenty years.
6.2
Urban Structure
Downtown Calgary will continue to be the dominant market for office development and business activity. Over the long-term, however, we
envision that the formation of suburban business parks will begin to alter the urban structure of Calgary somewhat.
Currently, about 70% of the City’s office space is situated in the downtown. On-going population growth in the City - particularly at the outer
edges – will dictate greater market demand for office space more proximate to residential areas. Over the forecast period, we anticipate that
the total share of suburban office demand will edge upward, from its current level of 22% to an estimated 26% by 2025. In absolute terms this
represents approximately 5 to 7 million square feet of additional suburban office space, which translates into 25,000 to 30,000 new office jobs
created in the suburbs.
urbanMetrics inc.
market, economic and strategic advisors
61
Calgary Office Market Forecast, 2006-2025
Based on our review of vacant land supply, residential growth patterns, and planned transportation/transit infrastructure investment, we
believe that the south-end of Calgary will likely capture a significant portion of suburban growth, and will have significant impacts on the city in
terms of planning future transportation expansions, and achieving greater road and transit ‘counter-flow’ during peak commuter hours.
6.3
Calgary’s Urban Boundary
Like most cities, expansions of the urban boundary are a highly contentious issue. Many detractors suggest that successive outward
expansions ultimately lead to unsustainable patterns of urban development. While we understand and appreciate the tremendous growth
pressures that will be faced by Calgary, particularly on the residential side, our market demand and supply forecasts for office space suggests
that the city has the physical land capacity within its existing urban boundary to fully accommodate the amount of space warranted over the
next 20 years. Therefore, we do not believe it is necessary to expand the City’s boundary expressly for the purpose of opening the market to
suburban office park development.
6.4
Transportation Infrastructure
The City of Calgary report, entitled: Accommodating Growth: A Framework for Coordinating Municipal Capital Investment 2005-2025, lists all
of the capital projects scheduled to be completed during our forecast period. Although these investments are not geared specifically toward
accommodating office development, they do provide a general overview of the scope of projects which will be leveraged for managing urban
growth and supporting the needs of business in Calgary.
6.4.1 Roads & Highways
Road and highway capacity plays an important role in shaping the locational decision of firms and industries. In terms of Calgary’s central
area office market, the established road network serving the Beltline and the Downtown is essentially “fixed” asset. On a go-forward basis,
there is little that The City could actually do to expand capacity other than making minor modifications to traffic flow system such as improved
signalization, directional changes to streets and potentially adding new turning lanes. In any event, the opportunity of expanded vehicular
capacity in and out of downtown is extremely limited. Commuters to the central area will simply need to adjust their driving patterns
accordingly.
In the suburbs, office development is going to be concentrated, to a large extent, within a handful of auto-oriented business parks. The
Province of Alberta is leading the development of a “Ring Road” around Calgary. Construction on this facility has already started in the
urbanMetrics inc.
market, economic and strategic advisors
62
Calgary Office Market Forecast, 2006-2025
Southwest and Southeast quadrants. These investments will enhance the flow of traffic through Calgary, and will also help to shape the
formation of new office facilities in the city’s south-end. In addition, recently completed road improvements (such as the Anderson and
Shawnessy interchanges) and planned investments (such as Heritage Drive and 162 Avenue interchanges) should help to improve traffic flow
on Macleod Trail. These modifications will reduce the impacts of more traffic generated by new office developments in the south end.
Elsewhere in Calgary, a number of significant road projects are also planned, including: along Glenmore Trail, Beddington Trail, Country Hills
Blvd and Deerfoot Trail, all of which have strong opportunities to promote new office development.
6.4.2 Public Transit
The Calgary Transportation Plan (1995) (also known as the “GoPlan”) identifies a need for a 15% increase in service capacity in order to
accommodate a population target of 1.25 million. Achieving this target has required Calgary to increase existing service levels on its routes
and provide new transit options in order to serve the needs of transit riders. In it’s recently approved 20-Year Capital Plan, Calgary Transit has
formally committed to on-going LRT expansions of the Northwest and Northeast lines. In addition, the City is now planning new LRT lines
serving the City’s west-end (from downtown to 69th Street SW), and for the Southeast (from downtown to 114th Avenue SE). We concur that
these projects will be necessary given the importance that transit plays in promoting healthy urban growth. These lines will play an important
role in alleviating congestion in the central area and provide new options and alternatives for commuters, thus providing on-going market
strength to the city’s downtown office market. As new suburban LRT stations are planned and added to the system, decision makers need to
maintain a long-range development perspective – especially on lands that fall within 400 metres (a reasonable walking distance) from the
stations. Policies need to be in place to ensure that these lands develop with higher-order employment uses (i.e. those activities capable of
supporting investment in infrastructure and sustaining regular ridership patterns). To this end, we recommend that retail and other space
extensive uses should be avoided around selected stations, except were population dictates no other suitable options and alternatives.
In the Downtown, the Calgary Transportation Plan targets a 50% modal split for transit by 2025. This represents a full 25% increase over
today’s usage patterns. To be able to achieve this objective, the physical capacity of the public transit network will have to be vastly improved.
Today, current CTrain and bus services are already operating at or near full-capacity during peak-times. Plans have been approved to
o
expand the length of station platforms to accommodate longer trains,
o
expand the bus fleet,
urbanMetrics inc.
market, economic and strategic advisors
63
Calgary Office Market Forecast, 2006-2025
o
extend CTrain lines, and
o
increase the supply of suburban “Park and Ride” stalls around key transit nodes.
The net effect of these changes will result in an overall increase in transit capacity to the Downtown by about 30%, which is considered
sufficient to keep pace with employment growth for at least 5 to 10 years31. The implications of these investments over a longer-term horizon,
particularly in light of the on-going development of office space downtown will require some further investigation by the City. Alternatively, the
office demand forecasts that have been prepared in this study suggest that there are strong opportunities for future construction adjacent to
existing and future stations, particularly in the suburbs. In our opinion, this scale of development can and should provide a strong impetus for
additional investments that can help stimulate “counter-flow” ridership, and provide greater peak-hour balance the City’s on trains and buses.
6.5
Downtown Parking
The City of Calgary is presently engaged in the development of a comprehensive parking strategy that seeks to better utilize existing parking
infrastructure, and to minimize the amount of “reserved” parking spaces in the downtown (i.e. stalls that are not available for public use during
peak hours or on the weekend). In effect, The City’s proposed parking strategy is seeking to reduce the number of private/reserved spaces in
office buildings and to expand the number of “public” spaces situated in more strategically located municipally operated parking structures,
which can be utilized by a number of over lapping downtown users.
The parking strategy is intended to be an integral component of the City’s transportation demand management strategy, because it allows The
City to more effectively locate parking structures where road capacity permits. More importantly, the strategy also provides a greater degree of
flexibility and control with respect to managing pricing options for both parking and public transit. The strategy is intended to provide The City
with a stable source of revenue that can be used to finance successive investments in parking on a timely basis as market forces dictate.
The issue of parking of course is intrinsically linked with transit and roads capacity issues. More roads or fewer transit options will ultimately
increase the demand for parking. From a marketing perspective, parking has always played an important role in adding value to a proposed
office building and attracting prospective tenants. In the case of downtown, parking provides additional revenues to landlords. The new
31
The City of Calgary, Briefing Note ” Downtown Transit Capacity”, February 2006
urbanMetrics inc.
market, economic and strategic advisors
64
Calgary Office Market Forecast, 2006-2025
parking by-law (as proposed), may ultimately lead to some future reductions in market interest in downtown construction, and may push some
developments into the suburbs. On the other hand, the new parking strategy should help to increase transit ridership as commuters begin to
recognize the time and cost savings it provides32. From our perspective, we do not believe that the proposed parking by-law would materially
diminish the primary function that downtown Calgary presently serves; nor do we believe that it will have any measurable impacts in terms of
the vibrancy of the core during evening hours or on weekends. Having a well managed parking system will, in our opinion, provide greater
strength to the City’s downtown because it seeks to reduce congestion and provides more opportunities for flexible approaches to future road
and transit planning initiatives. Moreover, we would also recognise that Calgary’s Parking Authority has demonstrated strong leadership, in
terms of delivering innovative and thoughtful parking options. The City’s Centennial parking structure at 9th Avenue is an extremely welldesigned facility which has greatly enhanced the physical character of one of Calgary’s least attractive streets.
All our forecast scenarios recognize that existing surface lots play an important role in the future potential build-out of the central area. Our
forecasts indicate that the downtown, for example, has the physical potential to add more than 20 million square feet of space. This is well
above the level of total space demanded and therefore suggests that Calgary will unlikely experience a deficit of spaces as a direct result of
downtown build-out. It is our opinion that that well-located, structured parking facilities can and should play a greater role in the City
development. Ultimately a centrally managed network of structured parking lots will help to promote and enhance the physical character of the
City - making it more attractive to investors.
32
The success of the proposed parking strategy is incumbent on additional service capacity and improvements to the City’s public transit system.
urbanMetrics inc.
market, economic and strategic advisors
65
Calgary Office Market Forecast, 2006-2025
7
Study Conclusions
Based on the analytical approach undertaken in this report, the following key conclusions are drawn:
1. As the administrative and corporate centre of Alberta’s energy and business services sector, Calgary will maintain a strong “white
collar” work-force that will, over the short and long-term, continue to drive demand for new office product, both downtown and in
the suburbs.
2. Office employment in 2005 in the city of Calgary is currently estimated at 212,500 workers. Between 2005 and 2010 the total
number of office jobs is forecasted to increase by approximately 25,000 new positions. We estimate that the proportion of office
jobs in the Calgary economy will likely remain stable, representing approximately one-third of the total employment base. Over the
longer term we estimate that office employment will however play an increasingly more important role in the labour force. By 2025,
we forecast that total office employment will approach 320,000 representing approximately 1 out of every 3 jobs.
3. The allocation of office space on an employee per square foot basis has a major impact on the total demand forecasted. In the
short-term forecast, we compared scenarios with 225, 250 and 275 square feet of occupied space per employee. The findings
from the comparative analysis suggest that the industry standard of 250 square feet is the most “reasonable” to forecast Calgary’s
office market. In the long-term, we anticipated that this number is likely to see some compression, declining to 225 square feet in
2025, in order to account for enhanced office efficiency patterns in the market.
4. Our short-term analysis indicates that economic growth in Calgary between 2006 and 2010 will reasonably dictate a need for
approximately 4.2 to 5.5 million square feet of new space. The market has responded with intentions of delivering 2.5 to 3 times
the amount actually warranted. Should all the projects move forward as planned, Calgary would likely find itself in an over-supply
situation by 2010. Current market conditions however suggest that this new space will result in a more balanced market, returning
vacancy levels in the order of 15%.
5. Moving forward, the city of Calgary will experience market demand patterns consistent with those of the past decade. Between
2006 and 2025 annual demand (absorption) for additional space is forecasted between 800,000 and 1.3 million square feet.
urbanMetrics inc.
market, economic and strategic advisors
66
Calgary Office Market Forecast, 2006-2025
6. The suburban market is poised to see significant market growth over the long-term. On average, our forecasts suggest that
suburban Calgary will account for 30% to 40% of annual growth. On an absolute basis we are forecasting that the suburban
market will track at (or near) current patterns over the next decade, ranging between 270,000 to 460,000 square feet per year.
7. The Downtown will continue to act as the dominant location for office employment growth in the short and long-term. The delivery
of new office space, beginning in 2007 should see absorption levels spike in excess of 930,000 square feet, moderating in 2008
and 2009 and, finally settling back to 440,000 square feet in 2010. In the long-term, Downtown Calgary will maintain a healthy
share of the market representing about 50-60% of total demand and 65% of the total inventory by 2025.
8. Calgary will have sufficient land to respond to market demand for at least 20 years. Based on our highest demand scenario and
our lowest supply forecasts, there will be adequate opportunities to serve the needs for an additional 25 million square feet of
office space after 2025. Theoretically, Calgary’s market could accommodate an estimated 105 million square feet of office space.
This is more than twice its current size. If only vacant sites were included in the potential supply, Calgary would still be able to fully
support the required office demand until 2025. To put our long range potential office space supply forecasts in perspective,
Calgary would need to achieve an average annual absorption rate of 2.3 million square feet per year - approximately the same
level as the record-breaking amount in 2005 - to exhaust the development opportunities that exist on vacant and underutilized
sites throughout the city.
9. Policy and decision-makers in Calgary will need to give increasing levels of attention to office development. In particular, a
growing share of office based employment, coupled with an increasing level of suburban business park development will place
new challenges on the city’s transportation network. Fortunately the city has a healthy supply of land that can be leveraged to
support office formation around key transit nodes and corridors. Our forecasts suggest that lands within the existing urban
boundary, if adequately managed, are more than sufficient to accommodate office demand over the long-term. In our opinion,
future decisions related to urban boundary expansion should be made in isolation of issues pertaining to the city’s supply of office
space.
urbanMetrics inc.
market, economic and strategic advisors
67
Calgary Office Market Forecast, 2006-2025
APPENDICES
APPENDIX I: Econometrics Method: Additional Comments
APPENDIX II: Short-Term Forecast of Office Oriented Employment (Occupations) in Calgary Economic Region
APPENDIX III: Calgary Economic Region Office Space Demand Forecast
APPENDIX IV: Summary of Demand Results by Other Analysts
APPENDIX V: New Office Supply 2006-2010
APPENDIX VI: Assessment of Potential Office Developments 2011-2025
APPENDIX VII: Suburban Supply Potential
urbanMetrics inc.
market, economic and strategic advisors
68
Calgary Office Market Forecast, 2006-2025
Appendix I: Econometrics Method Additional Comments
Due to data limitations a stand alone analysis could not be undertaken for the suburban market. We would note, however, that the impacts
can be inferred as the difference between the total market and the downtown market.
Since economic indicators and occupied space are typically characterized as smooth upward trends over time, we have focused our attention
on the incremental, year-over-year changes and fluctuations within each of the economic indicators measured in order to determine the ways
and means that these changes actually impact the demand for office space in the city. Through the course of our analysis we measured and
analyzed the statistical correlation between variables both in absolute and incremental terms. Based on our literature review of office
forecasting techniques, we advanced our analysis based on incremental trends rather than those using absolute values.
In order to substantiate the strength of our independent variables as “predictors” of variation in occupied space, we employed a multiple
regression analysis. The regression analysis is useful to find and measure statistical relationships between variables for the purpose of
adequately predicting future values based on the “best” indicators. In our analysis we tested all the indicators to determine the extent to which
each of the independent variables explained changes within the Calgary office market in terms of occupied space.
urbanMetrics inc.
market, economic and strategic advisors
69
Calgary Office Market Forecast, 2006-2025
Appendix II: Short-Term Forecast of Office Oriented Employment
(Occupations) in Calgary Economic Region (1)
Office-Oriented Occupations
Code
Allocation to
Office Forecast (2)
Administrative and regulatory occupations
1.3
100%
Administrative services managers
1.1
100%
Administrative support clerks
1.3
80%
Architects, urban planners and land surveyors
2.2
100%
Auditors, accountants and investment professionals
1.2
100%
2.2
100%
Civil, mechanical, electrical and chemical engineers
1.3
90%
Clerical occupations, general office skills
Clerical supervisors
1.3
90%
2.2
80%
Computer and information systems professionals
Doctors
3.1
10%
5.1
100%
Facility operation and maintenance managers
Finance and insurance administrative occupations
1.3
100%
Finance and insurance clerks
1.3
100%
Human resources and business service professionals
1.2
95%
Insurance and real estate sales occupations and buyers
4.2
100%
Judges, lawyers and Quebec notaries
4.3
50%
Legislators and senior management
1.1
50%
Life science professionals
2.2
90%
Managers in art, culture, recreation and sport
5.2
10%
Managers in communication (except broadcasting)
1.1
100%
Managers in construction and transportation
5.2
50%
Managers in engineering, architecture, science and information
2.1
100%
Managers in financial and business services
1.1
100%
Managers in manufacturing and utilities
5.2
50%
Managers in primary production (except agriculture)
5.2
50%
5.1
25%
Managers in public administration
Mathematicicans, statisticians and actuaries
2.2
100%
Medical Technicians
3.3
10%
Nurses
3.2
10%
Office equipment operators
1.3
100%
2.2
50%
Other engineers
2.2
90%
Physical science professionals
Policy and program officers, researchers and consultants
4.4
100%
Recording, scheduling and distributing occupations
1.3
50%
Sales, marketing and advertising managers
4.1
100%
Secretaries, recorders and transcriptionists
1.3
100%
Technical occupations in architecture, drafting and surveying
2.3
100%
Technical occupations in civil, mechanical and industrial engineering
2.3
80%
Technical occupations in computer and information systems
2.3
100%
Technical occupations in electronics and electrical engineering
2.3
80%
Technical occupations in life sciences
2.3
80%
Technical occupations in physical sciences
2.3
80%
Transportation officers and controllers
2.3
80%
Writing, translating and public relations professionals
4.1
50%
TOTAL
Source: urbanMetrics Inc.
Notes
(1) Forecast based on Alberta Human Resources & Employment Alberta Regional Occupation Outlook: 2005-2010 , Sept. 2005
(2) urbanMetrics Inc. estimate for jobs situated in office buildings greater than 20,000 sf.
urbanMetrics inc.
market, economic and strategic advisors
2005
2006
17.8
5.2
12.6
1.7
18.1
10.1
8.9
3.5
12.5
0.5
1.6
11.3
18.3
7.6
7.2
2.2
1.9
0.6
0.1
0.6
1.0
2.9
2.3
1.6
0.8
0.2
0.2
1.5
0.9
4.7
3.9
4.8
3.1
6.8
6.1
7.9
5.5
1.8
3.3
5.9
0.7
2.2
0.4
1.9
212.5
18.2
5.4
12.6
1.7
18.6
10.3
9.4
3.6
12.8
0.5
1.6
11.6
18.7
7.7
7.4
2.2
2.1
0.6
0.1
0.6
1.1
3.0
2.5
1.6
0.8
0.2
0.2
1.5
0.9
4.8
3.9
4.9
3.3
6.9
6.3
8.2
5.6
1.9
3.4
6.0
0.7
2.2
0.4
1.9
217.8
2007
2008
(Thousand of Employees)
18.6
19.0
5.5
5.7
12.7
12.8
1.8
1.9
19.1
19.6
10.6
10.8
9.7
10.2
3.6
3.7
13.0
13.4
0.5
0.5
1.7
1.8
11.7
11.9
19.0
19.3
7.8
8.0
7.6
7.6
2.3
2.3
2.2
2.4
0.6
0.6
0.1
0.1
0.6
0.7
1.1
1.1
3.3
3.2
2.6
2.7
1.7
1.7
0.9
0.9
0.2
0.2
0.2
0.3
1.5
1.6
0.9
1.0
4.8
4.9
4.0
4.1
5.0
5.0
3.5
3.6
7.0
7.1
6.4
6.6
8.5
8.8
5.7
5.8
1.9
2.0
3.6
3.7
6.1
6.2
0.8
0.8
2.3
2.4
0.5
0.5
1.9
2.0
222.9
228.0
2009
2010
19.3
5.9
12.9
1.9
20.0
11.0
10.6
3.8
13.6
0.5
1.8
12.1
19.6
8.1
7.8
2.4
2.5
0.6
0.1
0.7
1.1
3.3
2.9
1.8
0.9
0.2
0.3
1.6
1.0
5.0
4.2
5.1
3.8
7.2
6.7
9.1
5.9
2.1
3.8
6.2
0.8
2.5
0.5
2.0
232.8
19.7
6.0
13.0
2.0
20.5
11.2
11.1
3.8
13.9
0.5
1.9
12.3
19.9
8.2
7.9
2.4
2.7
0.7
0.1
0.7
1.2
3.4
3.0
1.8
0.9
0.2
0.3
1.6
1.0
5.1
4.2
5.2
3.9
7.2
6.9
9.3
6.0
2.1
3.9
6.3
0.8
2.6
0.5
2.0
237.5
70
Calgary Office Market Forecast, 2006-2025
Appendix III: Calgary Economic Region Office Space Demand Forecast
2000
2001
2002
Historic
2003
2004
Current
2005
Employment
Employment Incremental Growth
Office Employment
Office Employment Incremental Growth
Worked at Home
577,575
4.4%
185,527
599,875
3.9%
192,978
611,225
1.9%
196,700
625,175
2.3%
201,294
643,350
2.9%
207,321
659,118
2.5%
212,530
40,673
42,591
43,423
44,440
45,758
Office Workers
% share of total employment
152,989
26.5%
158,905
26.5%
161,962
26.5%
165,742
26.5%
170,715
26.5%
38,367,827
251
38,902,008
245
38,057,541
235
38,737,676
234
40,693,284
238
Office Space Total Demand
Occupied Space
Office Space per Employee Ratio
@ 250 sq.ft./employee
@ Declining to 225 sq.ft./employee
Office Space Demand Downtown
Occupied Space
@ 250 sq.ft./employee
@ Declining to 225 sq.ft./employee
Share Regional
Office Space Demand Suburbs
Occupied Space
@ 250 sq.ft./employee
@ Declining to 225 sq.ft./employee
Share Regional
Office Space Demand Beltline
Occupied Space
@ 250 sq.ft./employee
@ Declining to 225 sq.ft./employee
Share Regional
Office Space Total Supply
Office Space Total Inventory
Vacancy Rate
27,420,364
27,651,668
26,846,777
27,325,825
28,566,538
71%
71%
71%
71%
70%
8,046,412
8,271,337
8,277,870
8,446,677
8,889,453
21%
21%
22%
22%
22%
2,901,051
2,979,003
2,932,895
2,965,174
3,237,293
8%
42,475,325
9.7%
8%
44,728,280
13.0%
8%
44,864,182
8%
45,060,626
15.2%
14.0%
8%
45,112,676
9.8%
2006
Short-Term Forecast
2007
2008
2009
2010
Long-Term Forecast
2015
2020
Periodic Variation
2025
2005-2010
2010-2015
Notes
2015-2020
2020-2025
(2005-2025)
695,722
2.6%
222,935
2.3%
49,570
711,211
2.2%
228,045
2.3%
50,703
724,610
1.9%
232,813
2.1%
51,689
736,898
1.7%
237,490
2.0%
52,597
793,714
1.5%
262,164
2.0%
56,819
857,335
1.5%
290,218
2.0%
61,555
923,348
1.5%
320,340
2.0%
66,491
77,780
56,816
63,621
66,014
245,000
1)
24,960
24,674
28,054
30,122
102,000
2)
46,907
678,250
2.9%
217,845
2.5%
48,297
5,689
4,223
4,736
4,936
18,000
3)
175,004
26.6%
179,207
26.4%
183,279
26.3%
187,482
26.4%
191,462
26.4%
195,413
26.5%
216,708
27.3%
240,974
28.1%
267,147
28.9%
20,409
21,296
24,265
26,173
88,000
4)
44,801,873
44,577,863
45,819,745
45,361,547
46,870,580
46,167,522
47,865,448
46,908,139
48,853,197
47,631,867
54,177,107
51,468,252
60,243,462
55,725,202
66,786,708
60,108,037
5,420,858
4,199,528
5,323,910
3,836,385
6,066,355
4,256,951
6,543,246
4,382,834
21,985,000
15,530,000
30,913,292
30,758,726
69%
31,844,723
31,526,275
70%
32,575,053
32,086,428
70%
33,266,486
32,601,156
70%
33,708,706
32,865,988
69%
36,840,433
34,998,411
68%
40,061,902
37,057,260
67%
43,411,360
39,070,224
65%
3,149,589
2,306,871
3,131,727
2,132,423
3,221,469
2,058,848
3,349,458
2,012,964
12,498,000
8,311,000
10,304,431
10,252,909
23%
10,309,443
10,206,348
23%
10,545,881
10,387,692
23%
10,769,726
10,554,331
23%
11,236,235
10,955,329
23%
12,731,620
12,095,039
24%
14,759,648
13,652,675
25%
17,364,544
15,628,090
26%
1,822,225
1,541,319
1,495,385
1,139,710
2,028,028
1,557,635
2,604,896
1,975,415
7,060,000
5,375,000
3,584,150
3,566,229
8%
3,665,580
3,628,924
8%
3,749,646
3,693,402
8%
3,829,236
3,752,651
8%
3,908,256
3,810,549
8%
4,605,054
4,374,801
9%
5,421,912
5,015,268
9%
6,010,804
5,409,723
9%
433,581
335,874
696,798
564,252
816,857
640,467
588,892
394,455
2,427,000
1,843,000
45,666,758
48,379,267
52,136,317
54,658,233
57,408,233
na
na
na
7)
1.9%
5.3%
10.1%
12.4%
14.9%
na
na
na
8)
43,432,339
250
5)
6)
30,559,117
5)
70%
9,414,010
5)
22%
3,474,675
5)
8%
45,147,962
3.8%
urbanMetrics inc.
Notes
1)
Estimates for Calgary Economic Region employment are based on City of Calgary Corporate Economics Forecasts
2)
Office Employment is based on estimates from office oriented employment (occupations) projections from urbanMetrics and Alberta Human Resources & Employment, Alberta Regional Occupation Outlook: 2005-2010 , Sept.05. The estimates for the period before 2005 are calculated based on average annual employment
growth in Calgary Economic Region. The estimates for the long-term forecast period (2010-2025) are based on the assumption of an increase in the share of office employment from total employment. We used a conservative increase of 0.5% annually added to the total employment growth .
3)
Statistics Canada defined people “working at home” as: “Persons whose job is located in the same building as their place of residence, persons who live and work on the same farm, building superintendents and teleworkers who spend most of their work week working at home”. In the 2001 Census, 38,600 people from the
Calgary CMA were included into this category. The number of people working at home before and after 2001 were estimated based on average annual employment growth (Worked at Home ) between the results from Census 1996 and Census 2001 in Calgary CMA. Between 1996 and 2001 "Work at Home" proportion of total
employment growth from 6.8% to 7.1%. Thus, the share of "Work at Home" employees is expected to grow at an annual rate of 0.06%.
4)
The number of office workers is calculated as the office employment minus 80% of the estimated number of individuals that are included in the category "Worked at Home". These individuals working at home are assumed not to need office space.
5)
Net Absorption and New Supply derived from CBRE and Colliers International
6)
Calculation. Based on the total occupied space divided by the number of office workers
7)
The office space inventory is based on the observed net new supply from 1995 to 2005 and the projected new supply (pipeline) anticipated during from 2006 to 2010.
8)
Vacant supply is calculated using the amount of office space demanded divided by the designated office space supply (Inventory).
urbanMetrics inc.
market, economic and strategic advisors
71
Calgary Office Market Forecast, 2006-2025
Appendix IV: Summary of Demand Results by Other Analysts
Variable
(per year)
Forecast Period
Employee Demand
Total Space Demand (sq.ft.)
(1)
(2)
(3)
(4)
(5)
urbanMetrics
InSite
PwC
S.O.S.G
Brown & As.
2006-2025
4,400
2006-2010
4,000-6,000
2000-2020
NA
2001-2021
4,500
1997-2046
2,666
780k-1,100k
NA
670k-940k
700k-900k
290-320k
Notes:
1. urbanMetrics Inc,"Calgary Office Market Forecast", April 2006
2. InSite, "Calgary Office Market Outlook:2013", February 2006
3. PriceWaterhouseCoopers, "South Macleod Trail Employment Centre Study", October 2001
4. Suburban Office Study Group, "Calgary Suburban Office Supply & Demand A Citywide 20 Year Forecast" , March 2001
5. "Calgary Industrial Land Requirement: 1997-2046", prepared for Brown & Associates Planning Group by Clayton Research Associates Ltd. (1999)
urbanMetrics inc.
market, economic and strategic advisors
72
Calgary Office Market Forecast, 2006-2025
Appendix V: New Office Supply 2006-2010
Address
Project Name
Developer/Owner
2 St. & 3 Ave. SW
Livingstone Place Phase 1
Bentall Real Estate Services / BCIMC
Office Area
420,000
Completion Year (est.)
2007
Market
Downtown
Suburban Sector
Status
2 St. & 3 Ave. SW
Livingstone Place Phase 2
Bentall Real Estate Services / BCIMC
420,000
2007
Downtown
Under Construction
607 8th Avenue SW
Opus Building Corporation
Opus Building Corporation / Redcliff Realty
256,600
2007
Downtown
Under Construction
10201 Southport Road SW
Southland Park IV
Morguard Investments
240,000
2007
Suburban
9th Ave. & 1st St. SW
Homburg Harris Centre Phase 1
Homburg-Centron Teamworks
230,000
2007
Downtown
6 Ave. & 3 St. SW
Centrium Place
Tonko Realty Advisors
225,000
2007
Downtown
1924 18th Ave NE
Medallion Business Centre
Medallion Development Corp (Building A)
156,200
2006
Suburban
396 11th Avenue SW
Genco Place
Genco Development Corp
147,600
2007
Beltline
Under Construction
South
Under Construction
Under Construction
Under Construction
Northeast
Under Construction
Under Construction
211 11 Avenue SW
IBM Building B
SITQ/Bentall
137,000
2007
Beltline
Crowfoot Crescent NW
Crowfoot West Business Centre
Melcor Developments
96,500
2007
Suburban
Northwest
Under Construction
Under Construction
4838 Richard Rd SW
Westmount Corporate Campus Phase 1
GWL Realty Advisors
80,000
2006
Suburban
South
Under Construction
4129 8th St SE
Ronmor Business Centre Phase III
Ronmor Developers
31,300
2006
Suburban
South
Under Construction
808 – 42 Avenue S.E
Highfield Phase III
Ronmor Developers
30,000
2006
Suburban
South
Under Construction
444 58th Avenue SE
The Battery
Project 58 inc.
29,400
2006
Suburban
South
Under Construction
815 17th Avenue SW
Mount Royal Block
Tonko Realty Advisors
24,000
2006
Beltline
260 Midpark Way SE
Midpark Professional Centre
Opus Building Corporation
20,800
2006
Suburban
South
Under Construction
South
Under Construction
Under Construction
5799 3rd St. SE
D3 Strategies Inc.
D3 Strategies Inc.
20,000
2006
Suburban
5th Ave. SW & Centre St.
EnCana
EnCana
1,800,000
2010
Downtown
535 8 Av SW
Penny Lane Towers
Matco Investments
1,735,000
2009
Downtown
Pre-Leasing
3 Ave & 4 St SW
Centennial Place
Oxford Properties
1,450,000
2008
Downtown
Pre-Leasing
Recently Announced
8306 Horton Road S.W.
Horton Road S.W.
Opus Building Corporation
482,000
2008
Suburban
1st Street SW & 13th Avenue SE
Stampede Station Phase II
Opus Building Corporation / WAM Development Group
450,000
2008
Beltline
Pre-Leasing
Centre St. & 9th Ave. SW
Pallier Square
Aspen Properties
400,000
2010
Downtown
Pre-Leasing
Centre St. & 9th Ave. SW
Pallier Square
Aspen Properties
400,000
2010
Downtown
Pre-Leasing
9th Ave. & 1st St. SW
Homburg Harris Centre Phase 2
Homburg-Centron Teamworks
400,000
2009
Downtown
18 ST SE & 106 AV SE
Quarry Park
Remington Developments
350,000
2008
Suburban
9 Ave. & 2st SW
Bankers Court
Brookfield
319,500
2008
Downtown
339 2 Ave SW
City Centre Phase 1
Cadillac Fairview/ Aspen Properties
312,000
2009
Downtown
2535 3rd Ave SE
Opus II
Opus Building Corporation / WAM Development Group
253,300
2008
Suburban
Northeast
2652 2nd Ave SE
Opus III
Opus Building Corporation / WAM Development Group
252,200
2008
Suburban
Northeast
Pre-Leasing
4838 Richard Rd SW
Westmount Corporate Campus Phase 2
GWL Realty Advisors
200,000
2008
Suburban
South
Pre-Leasing
South
Pre-Leasing
South
Pre-Leasing
Pre-Leasing
South
Pre-Leasing
Pre-Leasing
Pre-Leasing
Pre-Leasing
211 13 Avenue SE
Stampede Station Phase I
Opus Building Corporation / WAM Development Group
153,300
2007
Beltline
13131 Lake Fraser Dr. S.E.
Canyon Meadows
Opus Building Corporation
150,000
2010
Suburban
1201 66th Avenue SW
Glenmore Professional Centre
North West Value Partners
140,000
2007
Suburban
South
Pre-Leasing
Glenmore Trail & Railway Street SE
Railway Street Corporate Centre
Remington Developments
137,100
2007
Suburban
South
Pre-Leasing
7 Sunpark Plaza SE
7 Sunpark Plaza SE
Sundance Place Ltd.
127,100
2006
Suburban
South
222 12 Avenue SW
IBM Building C
SITQ/Bentall
109,400
2007
Beltline
Barlow Tr. & 32 Ave. NE
Meridian Development
GWL Realty Advisors
74,900
2009
Suburban
TOTAL
Pre-Leasing
Pre-Leasing
Pre-Leasing
Northeast
Pre-Leasing
12,260,200
Source: urbanMetrics inc. based on information from City of Calgary, CBRE and InSite.
urbanMetrics inc.
market, economic and strategic advisors
73
Calgary Office Market Forecast, 2006-2025
Appendix VI: Assessment of Potential Office Developments 2011-2025
Downtown Market:
Address
903-935 8 AVE SW
940 8 AV SW
1001-1031 8 AVE SW
1034 8 AVE SW
820 10 ST SW
1020-1032 9 AVE
1001 7 AVE SW
935 4 AV SW & 925 4 AVE SW
1009A-1009C 9 AV SW
735-749 6 AVE SW
503 7 ST
813-825 5 ave SW
724-736 4 Ave SW
633 3 AVE SW
312-314 6 St & 634-636 4 AVE SW
600 3 AV SW
603-609 3 AVE SW, 311 5 ST SW
725 9 AV SW
507 4 ST SW, 505-527 5 AVE SW
500 1/2 6 AVE SW
730 5 ST SW
304 6 AV SW
110 2 Ave SW
108-118 9 AVE SW & 819-823 CENTRE ST S
208-212 9 AVE SW
307 1 ST SE
107-128 6 AVE SE
127-149 5 AVE SE & 515 1 ST SE
7 Ave and 9 Ave and 3 St SE
363-407 9 AVE SW
221 9 Ave SW
116-134 3 AVE SW & 117-129 2 AVE SW
830-838 4 Ave
526-528 4 AVE SW
933 5 AVE SW
1036 9 AVE SW
1000-1016 9 AVE SW
303 9 AVE SW
700 8 ST SW
907-919 9 AV SW
700 8 ST SW
522 6 AVE SW
301 AVE SW
212-220 7 AVE SW
309 2 AVE SW
308-312 CENTRE SE & 103-123 3 AVE SE
1009D-1111 9 AV SW
Sub-Total
GLA Low
(1)
GLA High (2)
774,400
155,021
250,580
43,734
41,328
121,551
99,971
280,474
0
124,941
405,504
92,928
121,984
354,381
210,688
613,340
0
3,303,744
650,099
489,779
79,078
447,744
26,836
363,866
293,875
62,198
555,418
183,936
423,360
0
700,237
134,438
145,587
275,136
62,490
36,449
968,000
193,776
313,225
54,667
51,660
151,939
124,963
350,592
621,274
156,176
506,880
116,160
152,480
442,976
263,360
766,675
36,989
4,129,680
812,624
612,224
98,848
559,680
33,546
454,832
367,344
77,747
694,272
229,920
529,200
1,594,138
875,296
168,048
181,984
343,920
78,112
45,562
96,660
0
110,426
0
105,818
80,115
247,616
198,222
1,148,928
131,218
0
14,044,098
120,826
434,086
138,032
520,819
132,272
100,144
309,520
247,778
1,436,160
164,022
896,000
21,658,428
Existing Use
Market
Sector
Surface Parking Lot
Surface Parking Lot
Surface Parking Lot
Surface Parking Lot
Surface Parking Lot
Surface Parking Lot
Surface Parking Lot
Surface Parking Lot
Surface Parking Lot
Surface Parking Lot
Surface Parking Lot
Surface Parking Lot
Surface Parking Lot
Surface Parking Lot
Surface Parking Lot
Surface Parking Lot
Surface Parking Lot
Surface Parking Lot
Surface Parking Lot
Surface Parking Lot
Surface Parking Lot
Surface Parking Lot
Surface Parking Lot
Surface Parking Lot
Surface Parking Lot
Surface Parking Lot
Surface Parking Lot
Surface Parking Lot
Surface Parking Lot
Surface Parking Lot
Surface Parking Lot
Surface Parking Lot and Underutilized Residential
Surface Parking Lot and Underutilized Retail
U nderutilized Retail
Underutiized Residential
Underutiized Retail
Underutiized Retail
Underutilized Office
Underutilized Retail
Underutilized Retail
Underutilized Retail
Underutilized Retail
Underutilized Retail
Underutilized Retail
Underutilized Retail
Underutilized Retail
Vehicle Sales Lot
Downtown
Downtown
Downtown
Downtown
Downtown
Downtown
Downtown
Downtown
Downtown
Downtown
Downtown
Downtown
Downtown
Downtown
Downtown
Downtown
Downtown
Downtown
Downtown
Downtown
Downtown
Downtown
Downtown
Downtown
Downtown
Downtown
Downtown
Downtown
Downtown
Downtown
Downtown
Downtown
Downtown
Downtown
Downtown
Downtown
Downtown
Downtown
Downtown
Downtown
Downtown
Downtown
Downtown
Downtown
Downtown
Downtown
Downtown
West End
West End
West End
West End
West End
West End
West End
West End
West End
Mid West
Mid West
Mid West
Mid West
Mid West
Mid West
Mid West
Mid West
Mid West
Central Core
Central Core
Central Core
Central Core
Central Core
Central Core
Central Core
East End
East End
East End
East End
East End
East End
Central Core
Mid West
Central Core
West End
West End
West End
East End
West End
West End
Mid West
Central Core
Central Core
Central Core
Central Core
East End
West End
urbanMetrics inc.
market, economic and strategic advisors
Estimated Site
Area (Acres)
Zoning
1.39
0.28
1.28
0.22
0.21
0.62
0.30
0.50
1.11
0.22
0.73
0.17
0.55
0.64
0.38
1.83
0.35
5.93
1.17
0.88
0.14
0.80
0.24
0.65
0.53
0.56
1.00
0.33
2.17
2.86
1.26
1.21
0.65
0.49
0.11
0.19
CM-2
CM-2
DC 48Z92
DC 48Z92
DC 48Z92
DC 48Z92
DC 80Z89
CM-2
DC 53Z95
CM-2
CM-2
CM-2
DC 20Z95 SITE 1
CM-2
CM-2
DC 22Z95 AREA C
DC 4Z99
CM-2
CM-2
CM-2
CM-2
CM-2
DC 70Z84
CM-2
CM-2
DC 70Z84
CM-2
CM-2
DC 94Z2005 SITE C
DC 53Z95
DC 55Z95
DC 70Z84
DC 20Z95 SITE 2
CM-2
CM-2
DC 48Z92
0.50
0.78
0.20
0.93
0.19
0.14
0.44
0.33
2.58
1.18
1.61
40.82
DC 48Z92
DC 53Z95
CM-2
DC 53Z95
CM-2
CM-2
CM-2
DC 245Z82
DC 22Z95 AREA C
DC 70Z84
DC 53Z95
74
Calgary Office Market Forecast, 2006-2025
Beltline Market:
Existing Use
Market
Sector
Estimated Site
Area (Acres)
Zoning
31,217
1 storey strip plaza
Beltline
Beltline
0.30
C-3
56,074
1 storey strip plaza
Beltline
Beltline
0.54
C-3
195,840
244,800
1 Storey Multi-Tenants Strip Plaza
Beltline
Beltline
0.88
DC 72Z84
66,621
83,277
1 Storey Retail
Beltline
Beltline
0.30
DC 53Z95
107,213
134,016
1 Storey Retail
Beltline
Beltline
0.48
DC 53Z95
1402-1420 11 AVE SW
88,556
110,694
1 Storey Retail
Beltline
Beltline
0.40
DC 53Z95
1331 11 AVE SW
105,062
131,328
1 Storey Retail + Surface Parking Lot
Beltline
Beltline
0.47
DC 39Z83
1231 10 AVE SW
116,582
145,728
1 Storey Retail/Industrial
Beltline
Beltline
0.52
DC 53Z95
104-140 11 AVE SW
380,022
475,027
1 Storey Strip Plaza + Seeds Ministry
Beltline
Beltline
1.70
DC 72Z84
614-730 10 AVE SW
854,892
1,068,614
1 Storey Strip Plaza + Surface Parking Lot
Beltline
Beltline
3.83
DC 8Z94 and DC 95Z2000 and DC 82Z2001
517 10 AVE SW
238,336
297,920
2 Storey Multi-Tenants Retail
Beltline
Beltline
1.07
DC 10Z94
1239 11 AVE SW
121,856
152,320
2 Storey Retail
Beltline
Beltline
0.55
DC 53Z95
555-559 11 AVE SW
140,314
175,392
2 Storey Retail + 1 Storey Strip Plaza
Beltline
Beltline
0.63
DC 13Z93
1003-1005 11 AVE SW
133,105
166,381
2 Storey Retail + 1 Storey Strip Plaza
Beltline
Beltline
0.60
DC 53Z95
105 10 AVE SE
1040 11 AVE SW
94,449
233,318
118,061
291,648
3 Storey Strip Plaza
Atco Gas 2 Storey retail
Beltline
Beltline
Beltline
Beltline
0.42
1.05
DC 53Z95
DC 53Z95
1030-1104 10 AVE SW
320,430
400,538
Car Wash + 1 Storey Retail
Beltline
Beltline
1.44
DC 53Z95
925,184
120,970
270,746
145,920
133,509
183,081
87,788
89,590
413,573
100,132
413,942
92,974
301,942
133,007
338,765
58,253
202,291
166,564
806,282
861,368
767,288
220,334
328,986
10,428,916
1,156,480
151,213
338,432
182,400
166,886
228,851
109,734
111,987
516,966
125,165
517,427
116,218
377,427
166,259
423,456
72,817
252,864
208,205
1,007,853
1,076,710
959,110
275,418
411,232
13,036,146
Coop Gas Station + Multi-Tenants Retail
small profesionnal offices and surface parking lot
Surface Parking Lot
Surface Parking Lot
Surface Parking Lot
Surface Parking Lot
Surface Parking Lot
Surface Parking Lot
Surface Parking Lot
Surface Parking Lot
Surface Parking Lot
Surface Parking Lot
Surface Parking Lot
Surface Parking Lot
Surface Parking Lot
Surface Parking Lot
Surface Parking Lot + 2 Storey Retail
Surface Parking Lot and 2 Storey Retail
underutlized office block
Vacant
Various Retail B.
Various Retail B.
Various Retail B.
Beltline
Beltline
Beltline
Beltline
Beltline
Beltline
Beltline
Beltline
Beltline
Beltline
Beltline
Beltline
Beltline
Beltline
Beltline
Beltline
Beltline
Beltline
Beltline
Beltline
Beltline
Beltline
Beltline
Beltline
Beltline
Beltline
Beltline
Beltline
Beltline
Beltline
Beltline
Beltline
Beltline
Beltline
Beltline
Beltline
Beltline
Beltline
Beltline
Beltline
Beltline
Beltline
Beltline
Beltline
Beltline
Beltline
4.15
0.54
1.21
0.65
0.60
0.82
0.39
0.40
1.85
0.45
1.86
0.42
1.35
0.60
1.52
0.30
0.91
0.75
3.62
3.86
3.44
0.99
1.48
47.32
DC 72Z84
C-3
DC 72Z84
DC 72Z84
DC 72Z84
DC 72Z84
DC 15Z93
DC 60Z87
DC 25Z99
DC 110Z2005
DC 9Z24 SITE 4 and DC 9Z24 SITE 3
DC 72Z84
DC 53Z95
DC 72Z84
DC 53Z95
DC 53Z95
DC 72Z84
DC 53Z95
DC 72Z84 and DC 609 and DC 205Z81 and RM 7 and C-3
DC 72Z84 and DC 84Z94 and DC 585 and RM 7
DC 68Z2004 and DC 53Z95
DC 53Z95
DC 53Z95
(1)
GLA High (2)
1403 8 ST SW
24,973
1216 8 ST SW
44,859
223-233 1 AVE SW & 1117 MACLEOD TRAIL
1121-1127 11 AVE SW
1002 14 ST SW
Address
11AVE SE & 12 AVE SE & CENTRE ST & 1 ST SE
1501-1597 MACLEOD TRAIL SE
206-220 11 AVE SE & 211-215 10 AVE SE
118 11 AVE SE
214-218 11 AVE SW
330 11 AVE SW
1101 4 ST SW & 505-513 11 ST SW
1102 9 ST SW & 927-931 11 AVE SW
999 8 ST SW
929-933 10 AVE SW
524 10 AVE SW
301 10 AVE SW
224 10 AVE SW
201 10 AVE SE
204-218 10 AVE SE
313 10 AVE SE
1108 4ST SW & 335-337 11 AVE SW
221 10 AVE SW
12 AVE SE & 13 AVE SE & MACLEOD TRAIL & 1 St SE
11 AVE SE & 12 AVE SE & 3 SE & MACLEOD TRAIL
1248-1400 10 AVE SW
1313 10 AVE SW
1302-1340 11 AVE SW
Sub-Total
GLA Low
urbanMetrics inc.
market, economic and strategic advisors
75
Calgary Office Market Forecast, 2006-2025
Suburban Market:
Address
GLA Low
(1)
GLA High
(2)
9615 HORTON RD SW
8503 MACLEOD TRAIL SW
8610 HORTON RD SW
8710 HORTON RD SW
5908 MACLEOD TRAIL SW
104 61 AV SE
6101-6119 CENTRE ST S
6230 CENTRE ST SE
6221-6229 CENTRE ST S
630 SOUTHLAND DR SW
325 25 ST SE
3915 34 ST NE
2033-2431 2 AVE SE
315 19 ST SE
405 18 ST SE
570 SOUTHLAND DR SW
9835 MACLEOD TRAIL SW
9827 HORTON RD SW
9815 HORTON RD SW
119 62 AVE SE
224 61 AVE SE
203 58 AVE SE
6224 2 ST SE
6560 2 ST SE
1930 MAYNARD RD SE & 411 19 ST SE
3525 39 AV NE
3515 39 AV NE
3920 34 ST NE
3510 37 AVE NE
3530 37 AVE NE
102 58 AVE SW
13131 LAKE FRASER DR SE
13131 LAKE FRASER DR SE
3510 35 ST NE
3505 35 ST NE
4400 MACLEOD TRAIL SW
15 CENTURY GA SE
707 BARLOW TRAIL SE
707 BARLOW TRAIL SE
8201 MACLEOD TRAIL SW
8835 MACLEOD TRAIL S
209 60 AV SW
211 60 AV SW
213 59 AV SW
211 59 AV SW
120 62 AVE SE
3111 34 AVE NW
3500 RESEARCH RD NW
3303 33 ST NW
3512 33 ST NW
19901 SOUTHPORT RD SW
19901 SOUTHPORT RD SW
Richard Rd SW & 50 Ave SW
Deerfoot Trail and Marquis Trail
Deerfoot Trail and Country Hills BLV NE
Quarry Park
Deerfoot Trail and Canyon Meadows
3810 & 3840 12 ST NE
1243 48 AVE NE
2618 HOPEWELL PL NE
2808-2850 HOPEWELL PL NE
2721-2777 HOPEWELL PL NE
3699 63 AVE NE
3687 63 AVE NE
2929 Sunridge WY NE
21\825-2883 Sunridge WY NE
2716-2752 Sunridge WY NE
2255 32 ST NE
12 Shalom Way NE
95 AVE NE & Deerfoot Trail
Sub-Total
60,847
23,380
19,324
48,466
26,166
54,912
145,108
88,971
122,036
152,038
34,813
21,976
95,680
50,967
15,309
59,427
31,140
52,852
49,269
35,543
162,822
295,943
142,473
85,355
167,964
20,598
21,287
22,700
30,432
43,392
39,484
21,132
150,000
31,824
31,824
26,076
58,041
172,480
85,344
30,209
30,951
45,369
28,470
17,784
19,711
72,550
37,446
129,920
116,760
73,472
107,852
113,561
420,000
750,000
1,182,953
1,150,000
875,000
40,582
27,189
51,219
74,314
50,400
155,157
48,369
73,017
35,070
28,986
72,698
30,192
63,360
167,432
102,659
140,810
182,445
52,219
32,964
143,520
76,451
22,963
71,313
37,368
63,422
59,123
41,011
187,872
341,473
164,392
98,486
251,946
30,898
31,931
34,049
45,648
65,088
45,558
35,221
150,000
47,736
47,736
39,114
87,061
258,720
128,016
45,313
46,426
52,349
32,850
20,520
22,744
83,712
48,145
167,040
150,120
94,464
161,778
170,342
420,000
1,000,000
1,182,953
1,650,000
875,000
52,177
34,957
76,828
111,471
75,600
232,736
72,553
282,110
423,165
83,345
55,815
39,198
72,778
963,266
9,943,145
125,017
83,723
58,797
121,296
1,350,289
12,630,334
TOTAL
34,416,159
47,324,907
Existing Use
Market
Sector
Automotive
Automotive
Automotive
Automotive
Automotive
Automotive
Automotive
Automotive
Automotive & Industrial
City of Calgary Maintenance Yards
Devry Parking Lot
Industrial
Industrial
Industrial
Industrial
Industrial
Industrial
Industrial
Industrial
Industrial
Industrial
Industrial
Industrial
Industrial
Industrial (Synsorb)
Parking Lot
Parking Lot
Parking Lot
Parking Lot
Parking Lot
Parking Lot
Vacant
Vacant
Vacant
Vacant
Vacant
Vacant
Vacant
Vacant
Vacant
Vacant
Vacant
Vacant
Vacant
Vacant
Vacant
Vacant
Vacant
Vacant
Vacant
Vacant
Vacant
Vacant
Vacant
Vacant
Vacant
Vacant
Vacant
Vacant
Vacant
Vacant
Vacant
Vacant
Vacant
Vacant
Vacant
Vacant
Vacant
Vacant
Vacant
Suburbs
Suburbs
Suburbs
Suburbs
Suburbs
Suburbs
Suburbs
Suburbs
Suburbs
Suburbs
Suburbs
Suburbs
Suburbs
Suburbs
Suburbs
Suburbs
Suburbs
Suburbs
Suburbs
Suburbs
Suburbs
Suburbs
Suburbs
Suburbs
Suburbs
Suburbs
Suburbs
Suburbs
Suburbs
Suburbs
Suburbs
Suburbs
Suburbs
Suburbs
Suburbs
Suburbs
Suburbs
Suburbs
Suburbs
Suburbs
Suburbs
Suburbs
Suburbs
Suburbs
Suburbs
Suburbs
Suburbs
Suburbs
Suburbs
Suburbs
Suburbs
Suburbs
Suburbs
Suburbs
Suburbs
Suburbs
Suburbs
Suburbs
Suburbs
Suburbs
Suburbs
Suburbs
Suburbs
Suburbs
Suburbs
Suburbs
Suburbs
Suburbs
Suburbs
Suburbs
Southland
Heritage
Heritage
Heritage
Chinook
Chinook
Chinook
Chinook
Chinook
Southland
Franklin
Whitehorn
Barlow/Max Bell
Barlow/Max Bell
Barlow/Max Bell
Southland
Southland
Southland
Southland
Chinook
Chinook
Chinook
Chinook
Chinook
Barlow/Max Bell
Whitehorn
Whitehorn
Whitehorn
Whitehorn
Whitehorn
Chinook
Canyon Meadows
Canyon Meadows
Whitehorn
Whitehorn
39 Avenue
Barlow/Max Bell
Barlow/Max Bell
Barlow/Max Bell
Heritage
Heritage
Chinook
Chinook
Chinook
Chinook
Chinook
Brentwood
Brentwood
Brentwood
Brentwood
Anderson
Anderson
Westmount Corporate Campus
South East Employment Area
Stoney Industrial Area
Quarry Park
South Bend
McCall
McCall
Horizon
Horizon
Horizon
Westwinds
Westwinds
Sunridge
Sunridge
Sunridge
Sunridge
Shawnessy
Aurora Business Park
Estimated Site
Area (Acres)
Zoning
1.75
1.68
1.39
3.48
0.58
1.21
3.20
1.96
2.69
4.36
2.50
1.58
6.86
3.66
1.10
1.71
0.89
1.52
1.41
0.78
3.59
6.53
3.14
1.88
12.05
1.48
1.53
1.63
2.18
3.11
0.87
2.02
5.32
2.28
2.28
1.87
4.16
12.37
6.12
2.17
2.22
1.00
0.63
0.39
0.44
1.60
1.54
5.33
4.79
3.01
7.74
8.15
57.96
60.00
1,853.73
314.02
321.40
1.66
1.11
3.67
5.33
3.62
11.13
3.47
GENERAL LIGHT INDUSTRIAL
DC 100Z80
GENERAL LIGHT INDUSTRIAL
DC
C-6
I-2
I-2
I-2
I-2
RESIDENTIAL
Commercial
GENERAL LIGHT INDUSTRIAL
I-2
GENERAL LIGHT INDUSTRIAL
GENERAL LIGHT INDUSTRIAL
I-2
C-6
I-2
I-2
I-2
I-2
I-2
I-2
I-2
GENERAL LIGHT INDUSTRIAL
GENERAL LIGHT INDUSTRIAL
GENERAL LIGHT INDUSTRIAL
GENERAL LIGHT INDUSTRIAL
GENERAL LIGHT INDUSTRIAL
NA
GENERAL LIGHT INDUSTRIAL
DC
DC
GENERAL LIGHT INDUSTRIAL
GENERAL LIGHT INDUSTRIAL
GENERAL COMMERCIAL
DC
DC 47Z96 SITE 2
DC 47Z96 SITE 1 & 2
HIGHWAY COMMERCIAL
Retail
GENERAL LIGHT INDUSTRIAL
GENERAL LIGHT INDUSTRIAL
DC 92
DC 92
I-2
DC 172001
University Research District
University Research District
University Research District
Public Service
Public Service
Office
Employment Area
Business/Industrial Area
Office
NA
GENERAL LIGHT INDUSTRIAL
GENERAL LIGHT INDUSTRIAL
GENERAL LIGHT INDUSTRIAL
DC
GENERAL LIGHT INDUSTRIAL
DC
DC
20.24
DC
5.98
4.00
2.81
6.96
263.02
3,097.86
DC
DC
DC
DC
NA
3,186
urbanMetrics inc.
market, economic and strategic advisors
76
Calgary Office Market Forecast, 2006-2025
Appendix VII: Suburban Supply Potential
Northeast Nodes:
Stoney
Industrial
Area
Northeast Net Potential Supply 2010-2025 (est.)
Nodes
Barlow/Max Bell
Franklin
Horizon
McCall
Stoney Industrial Area
Sunridge
Westwinds
Whitehorn
TOTAL
GLA (Low)
GLA (High)
(in thousand square feet)
646
969
35
52
176
264
68
87
1,183
1,183
460
691
204
305
224
336
2,995
3,887
Westwinds
Whitehorn
Horizon
McCall
Sunridge
Barlow/Max Bell
Franklin
urbanMetrics inc.
market, economic and strategic advisors
77
Calgary Office Market Forecast, 2006-2025
South Nodes:
39 Avenue
Westmount
Corporate
Campus
Heritage
South Net Potential Supply 2010-2025 (est.)
Nodes
39 Avenue
Anderson
Canyon Meadows
Chinook
Heritage
Quarry Park
Shawnessy
South Bend
South East Employment Area
Southland
Westmount Corporate Campus
TOTAL
Chinook
GLA (Low) GLA (High)
(in thousand square feet)
39
26
332
221
185
171
1,595
1,383
152
228
1,150
1,650
73
121
875
875
750
1,000
406
487
420
420
5,627
6,932
Southland
Quarry
Park
Anderson
South Bend
Canyon
Meadows
Shawnessy
urbanMetrics inc.
market, economic and strategic advisors
SE Employment
Area
78
Calgary Office Market Forecast, 2006-2025
Northwest Nodes:
Auro ra Business
Park
Northwest Net Potential Supply 2010-2025 (est.)
Nodes
Aurora Business Park
Brentwood
TOTAL
GLA (Low)
GLA (High)
(in thousand square feet)
963
1,350
358
460
1,321
1,810
Bren t w o o d
urbanMetrics inc.
market, economic and strategic advisors
79