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As an unforgettable 2020 draws to a close, most of us will be happy to move forward to better days. With that in mind, we’re speaking with CBRE’s market leaders to find out what commercial real estate trends they’ll be watching for in their cities in 2021.
Dave Young, CBRE Edmonton’s managing director, sees an abundance of hidden opportunities across the city’s commercial real estate landscape.
Like every other office market, businesses in Edmonton are trying to figure out their work-from-home strategy and how it looks pre-vaccine and post-vaccine. I’m of the belief that there’ll be a shift in demand but it’s not binary—take space or not take space. A flexible work environment is going to be crucial moving forward.
This is the most active property type from a leasing perspective. Amazon has taken four facilities in Edmonton and national groups like U-Line Shipping Supplies and Fountain Tire are expanding into the market now. It’s all about supply chain and logistics.
There’s also growing demand for industrial space to support the agricultural sector in Northern Alberta. We’ve got some of the most fertile land in North America running from Grand Prairie to Southeastern Saskatchewan. So there’s going to be a big push there from a local food supply point of view.
There are opportunities to be had here as multifamily pricing adjusts to an increase in the supply of apartment buildings for purchase. In markets like Toronto, Montreal and Vancouver, there are assumptions of near-term rental rate growth, so investors are paying significant amounts because they can see those near-term rental increases. In Alberta, not so much. That might be good news for renters and investors alike.
Food– and drug-anchored retail will continue to dominate during and after the pandemic. But unanchored infill retail sites will be targeted by prospective buyers pursuing redevelopment and new uses. If there’s density on these retail sites they’ll be sought after from the investment community. From a tenancy perspective, there’ll be unbelievable opportunities for users to take advantage of the tenancies that go dark in some of the best centres in the city. There will be opportunities that haven’t existed for years for some retailers.
I think the X factor in Edmonton’s retail resurgence will be the innovative drive of Albertans. There are some smart people running locally supplied and sourced retail outlets. I think you’ll see an emergence of this entrepreneurial spirit. And the fact they’ll be able to find space now, it could be neat for some local or regional businesses to step into the place where a national or international tenant has disappeared. It won’t happen right away, but already people are pivoting their businesses to take advantage of these opportunities.