Downtown's office vacancy challenge
Downtown Calgary office space: Larger and more occupied
Downtown and Beltline office vacancy currently sits at 28.4%. Calgary couldn’t keep up with the demand for space when the city’s economy was stronger, so large-scale office developments were approved to keep up. These large projects took years to complete, while the economy contracted in the interim and demand dropped significantly since 2014.
The result of this build-up is that Calgary has not only the highest levels of downtown office supply, but also the highest occupied downtown office space per capita when viewed against comparable North American cities. As of January 2020, Calgary has 42 square feet (sf) of office space, per capita, more than double the amount of Toronto (21 sf per capita), the next highest of any comparable North American city.
Note: when we refer to downtown, we are including the downtown commercial core and the Beltline.
While Calgary has the largest amount of downtown office space, per capita, it also has more occupied downtown office space than any comparable city. Calgary currently has 31 sf per capita, more than one and half times the occupied downtown office space of Toronto (20) and more than double Denver (13), a city Calgary is often benchmarked against.
Downtown Calgary office space - competitive compared to other cities
Calgary is the best bargain for office space rentals compared with other Canadian cities. Average “class A” downtown lease rates are roughly three times higher in Vancouver than here in Calgary.
Calgary has an abundance of high quality, move-in ready, and economical office space downtown. The current rental rates should be attractive to businesses. The issue facing Calgary is not just how it sizes up against other cities. It’s how The City, and its partners, address the problems that our downtown is facing and develop strategies to tackle that problem.
The Downtown Strategy - reshaping downtown for Calgary in the New Econmony
These challenges facing downtown led to the creation of The Downtown Strategy in 2019. This plan focuses on the economic and cultural opportunities in the downtown to drive a thriving local economy. It brings together The City, Calgary Economic Development, Calgary Municipal Land Corporation, Calgary Downtown Association, the University of Calgary’s School of Architecture, Planning and Landscape, and all other downtown Business Improvement Areas in a coordinated and collaborative effort to make life better every day for citizens, customers, residents and businesses.
The Downtown Strategy supports Calgary in the New Economy, which focuses on four key areas – talent, innovation, place and business environment. It’s focused on creating the environment and ingredients for attracting talent, supporting an ecosystem of innovation and encouraging private investment. Ultimately, it’s about reshaping downtown Calgary for the new economy and new ways of working.
The Downtown Strategy partners work hand-in-hand with The City’s Business and Local Economy team. The team is helping our existing businesses and working to retain and grow jobs, while also attracting new companies over the next five years, using a variety of metrics to measure success.
The year 2019 was a balance of successes and challenges. Highlights include:
- Calgary Economic Development attracting and retaining 28 companies in our downtown and created 2,300 direct and indirect jobs.
- The Opportunity Calgary Investment Fund (OCIF) was leveraged to secure high potential organizations, with four companies making direct and positive impacts on our downtown.
- Of the seven Opportunity Calgary Investment Fund (OCIF) announcements made in 2019, over half (57%) are impacting the downtown.
- New office absorption space across those OCIF investments (NPower Canada, Lighthouse Labs, Parkland Fuels, and Finger Food Advanced Technology Group) totals over 128,000 sf of office space.
- Expansion of the Centre City Enterprise Area, which waives the requirement of a development permit for changes of use, exterior alterations and small additions to businesses in the downtown and Beltline
- SAIT, with the support of Calgary Economic Development and OCIF, announced the creation of the Digital Transformation (DX) Hub in the historic Odd Fellow’s Building. They expect to produce 1,500 graduates within five years.
Ultimately, the Downtown Strategy focuses on building a vibrant and business-friendly downtown. It can only work to create an environment that is conducive to filling downtown office space. The current economic situation may take an extensive amount of time to recover and filling downtown office space is based on private sector business decisions. Building a vibrant and resilient downtown is a task that is ongoing and never ends. The Downtown Strategy team will keep working to ensure downtown Calgary continues to evolve as a livable, thriving place for people, business, innovation and creativity.