Avison Young releases new market highlights
In what has been described as “an asymmetrical and articulated recovery” path, the Edmonton office market is seeing greater attention towards its higher-end spaces, according to a new report by Avison Young.
During the third quarter, the market was characterized by a “gradual flight to quality benefitting Trophy and Class A properties, spikes in foot traffic on the collectively agreed upon ‘return-to-office’ days, and space downsizing or remodelling that may move tenants into the periphery or even suburban market,” the report noted.
The Q3 office vacancy rates were 18.2% for the downtown area and 16.7% for the suburban region, while average rent rates were $17.90 per square foot (downtown) and $16.60 psf (suburban).
However, “the heavy-handed interest rate hikes meant to combat inflation, arguably later than they should have been, have abruptly cooled investment activity across all asset classes,” Avison Young said.
“This should not deter savvy, long-term investors who can see opportunity in capital investment projects. Office towers such as Bell Tower and Baker Centre, for instance, have seen an increase in touring and leasing activity following the completion of their upgrades.”
As of the end of Q3, total inventory stood at 18.1 million square feet in downtown Edmonton and 15.7 msf in the suburban region.