Over the last decade, there has been a lot of talk about the Alberta Advantage (aka the Alberta Miracle). Alberta boosters would puff with pride because Calgary had more head offices than Vancouver and other Western cities. It wasn’t just because of the oil patch, they assured us; it was because of prudent diversification and sound economic policy. If only BC and other places were more like Alberta, then our problems would be solved. Or maybe not:
What oil sands giveth, oil sands taketh away
Globe and Mail Update
March 31, 2009 at 6:00 AM EDT
A few months ago, Calgary leasing executive Sean McCullough didn’t fret if a deal didn’t come together. At the time, office vacancy rates were low, rents were high and real estate transactions, especially in the fast-growing suburbs, were easy to come by.
“If we didn’t do a deal today, we knew we’d get one tomorrow,” says Mr. McCullough, vice-president of leasing for Strategic Group, which owns and manages six million square feet of suburban and downtown office and retail buildings in Calgary and Edmonton.
But in a few short months, the global economic meltdown and attendant drop in commodity prices have turned Calgary’s white-hot suburban office market on its heel.
Insiders say the cancellation, delay or cutback of oil sands projects has caused many tenants, particularly the large-scale engineering and oil sands servicing firms that have driven growth in the suburbs, to cut costs, and that has put large swaths of office space back on the market.
Calgary’s suburban office vacancy rate is now higher than that of other major cities, including Toronto and Vancouver, experts say. It has also risen faster than in some other places, the pros note….