Edmonton office market remains resilient

Edmonton's office market continues to show strength and stability, says an Avison Young report.
Office vacancy in the Alberta capital has risen to 8.2% compared to 5.8% at the end of 2008, says the firms Fourth Quarter 2009 Office Summary.
As a result of the recession, many companies changed their office space utilization in a bid to become more efficient, but the market is still considered healthy entering 2010. Vacancy in many other Canadian markets will reach double figures, if it hasn't already.
These are some of the key trends noted in Avison Young’s Fourth Quarter 2009 Edmonton Office Summary, released today.
“Despite a higher vacancy rate, the Edmonton office market is still considered to be in reasonably good health,” Avison Young principal Cory Wosnack in a news release. “The past six months have seen a continued rise in the amount of available space, mostly due to the injection of numerous sublease opportunities, and we expect this trend to continue until mid-year 2010. With these new opportunities comes a more competitive marketplace amongst landlords; as a result, tenants will benefit from more creative financial incentives to lease space. This situation will cause modest downward pressure on rental rates and higher inducement packages for tenants by way of free rent and improvement allowances."
A vacancy rate of approximately 8% is considered to represent a balanced market. Downtown Edmonton overall office vacancy, which includes head lease and sublease space, increased to 6.9% from 5.2% a year ago. Absorption was negative-184,485 square feet (sf), up from 37,097 sf at this time in 2008.
Suburban office vacancy rose to 10.7% from 7.1% in the fourth quarter of 2008. Absorption was negative-21,895 sf, compared to positive absorption of 267,734 sf at the end of 2008.