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Calgary's commercial real estate market is on the upswing again after a disappointing 2015 and 2016, according to investment results from Altus Group. The final quarter of 2017 registered 162 transactions totalling nearly $1.1 billion, bringing the total for the calendar year to $3.3 billion.
Total investment volumes jumped five percent and deal counts increased 30 percent from 2016. A five-property transaction from Dream Office REIT to Slate Asset Management represented 26 percent of all sales in the office sector, which at $830.8 million, is the largest contribution by asset class.
A surge in the industrial market put the sector at its fourth strongest standing on record, registering $667.3 million in total transactions, just $20 million short of the annual record set in 2008. York Realty, Hungerford Properties and Mountain Properties were the most active purchasers of the year, investing between $17 million and $25 million apiece.
Calgary's industrial availability rate currently sits at 7.2 percent, the lowest since early 2016. Altus Group says the measure is mainly a product of high demand in the distribution logistics sector, evidenced by the new 600,000-square-foot Amazon distribution centre under construction in Balzac's Nose Creek Business Park.
Significant transactions by prominent developers like Minto, Hines and Capexco catapulted the residential land market 39 percent to $490 million. The ICI land sector also posted significant gains, recording its third strongest year to date, and only 45 percent shy of the 2008 record.
"With overall deal velocity on such an uptick, not only from developers and institutional investors, but from the owner/user and local markets, confidence in the Calgary commercial real estate market appears to be building, setting the stage for a strong start in 2018," said Paul Richter, Director, Data Solutions at Altus Group.
