Investment in multi-family, purpose-built rentals is also strong.
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A strong economy growing at a pace unseen in more than a decade has spurred investment in Calgary’s commercial real estate sector, including multi-family residential.
Re/Max Commercial Real Estate recently released its Real Estate Report for Canada 2022, finding investment in commercial real estate in the city reached almost $1 billion in the first three months of the year, building on a strong 2021 that saw more than $2.4 billion for the entire year.
The performance last year was also up 26 per cent from 2020 when Calgary saw $1.9 billion of investment into commercial real estate.
Demand for industrial and flex-space buildings have been among the hottest market segments, in short supply since the start of the pandemic.
Investment has also been strong in multi-family purpose-built rentals, the report noted. Recent activity in includes three downtown office building conversions, adding 400,000 square feet to the residential rental market in Calgary.
The conversion trend is driven by “tepid” activity among downtown office space with vacancy for that long-suffering segment reaching nearly 27 per cent in the first quarter, up from about 25 per cent for the same period last year. Still, the report noted two office properties sold downtown in the first three months of this year, valued at $25 million combined.
Away from downtown, retail commercial real estate fared exceptionally well, the report noted, reflecting the province’s improving economy.
With the economy expected to grow by nearly six per cent this year amid falling unemployment, the report forecasted an increasingly favourable climate for residential from purpose-built multi-family rentals to new single-family detached home starts.