We’ve finally got some numbers from Colliers to verify what we’ve been seeing on the street – industrial construction has caught up with current demand, and we have some increased vacancy rates across the city.
The Northwest – where most of our industrial activity has been taking place – experienced the biggest jump from 2.13% to 4.54%. Over 390,000 square feet of product was added to this quadrant in Q4 . . . of which 88% remains available. It is worth noting that much of the new product has been designed as multi-tenant use, with bay sizes available in multiples of 15,000 square feet. This is the type of product we have seen the least demand for in our office.
If we take a step back, city-wide vacancy rates only rose 0.84% to end up at 3.17% – nothing to complain about there, given the amount of new construction we’ve seen added. Better yet, overall vacancy rates have dropped for the surrounding counties – which makes perfect sense as we’ve been seeing people look outward for more affordable rates. Here’s the snapshot:
- City-wide: up to 3.17%
- Surrounding Counties: down to 1.31%
- Northwest: up to 4.54%
- Southeast: up to 2.85%
- Northeast: up to 0.43%
- Central: up to 2.10%
- St. Albert: up to 1.24%
- Sherwood Park: up to 1.62%
- Leduc/Nisku: down to 1.16%
- Acheson: down to 1.45%
While there are predictions all over the map, through my glasses we’re seeing a healthy balance creep in. In general, I expect to see further adjustments through 2009; stabilizing lease rates and a temporary softening in selling prices. Real estate remains a local game, and some industrial neighborhoods around the city will fare drastically different than others. I predict neighborhoods such as St. Albert, Sherwood Park, & Leduc/Nisku will remain stable, and see continued growth sooner than other areas.
After a few kinks are worked through, we should see a return to numbers normally associated with strong growth . . . until the next wave of “kinks”! You can download the full Colliers report here.
[...] future of Edmonton’s industrial property values, see my previous posts on Edmonton industrial vacancy rates by area, and the 2009 real estate [...]