With one-quarter of its downtown buildings empty, Calgary is seeing the value of office and retail space on 8th Avenue Southwest heading into a price decline.
The legendary street, also known as Stephen Avenue, is now the sixth most expensive street in the country for office space, according to a report by commercial real estate firm JLL. It was second most expensive such street in 2014 before Alberta was hit by a severe economic downturn. JLL said average gross rent for Calgary’s 8th Avenue is $41.21 per square foot.
Last week, Strategic, a major property holder in Calgary, filed for creditor protection on 50 properties, citing the impact of the poor vacancy rate.
Edmonton is faring a little better; its 101st Street was listed as the fourth most expensive street in the country with average gross rent of $48.89 per square feet.
“Distressed oil prices continue to impact many tenants in Calgary, putting downward pressure on building rents,” JLL reported. “The average gross rent on 8th Avenue S.W. has dropped 1.5 per cent from our last report and 31.7 per cent since 2014,” it said.
Edmonton’s 101st Street has been helped by downtown development.
“Despite rising vacancy, 101 Street not only held its position as the most expensive office street in Edmonton, but it also held its 4th place position on the Most Expensive Streets list this year. The new towers along 101 Street and the growing ICE District continues to attract people seeking a live-work-play lifestyle,” said the JLL report.
Bay Street in Toronto is the country’s most expensive street with an average gross rent of $77.96 per square feet.
“Often referred to as the centre of Canada’s financial industry, Toronto’s Bay Street commands the highest gross rents in the country. Bay Street rents have increased by 11.1 per cent since 2017 as tenants continue to compete for the limited amount of prime real estate available. Trophy towers on Bay Street are rapidly approaching $100.00 per square foot in asking gross rent, setting new record highs for the entire Canadian market with every increase,” said the JLL report.
The second most expensive street in the country was Burrard Street in Vancouver with an average gross rent of $66.25 per square feet followed by Avenue des Canadiens-de-Montréal in Montreal at $55.38.
Others in the top 10 were: 5. Albert Street, Ottawa, $44.85; 7. Main Street, Winnipeg, $39.42; 8. Upper Water Street, Halifax, $35.95; 9. King Street West (Downtown Kitchener), $31.56; and 10. Laurier Boulevard, Quebec City, $29.65.
Mario Toneguzzi is a business reporter in Calgary.
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