Outlook 2021: Calgary

December 22, 2020 2 Minute Read

Outlook 2021: Calgary

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.

Greg Kwong, CBRE Calgary’s Regional Managing Director, sees further challenges ahead for the office and retail sectors, but notes that opportunities abound for investors looking for real estate bargains.


Virtually every major retailer is here or looking to have a location here to set up a distribution warehouse, from Amazon, to Canadian Tire and Home Depot. The main reason is that Calgary is centrally located and can service all of Western Canada and the Northwest U.S., as well. So I expect more demand from users in that regard. And these are large-bay users, 100,000 sq. ft. or more. There’s been a lot of this kind of ecommerce related activity for a while now, but the trend was definitely accelerated by COVID-19.


It’s a tale of two markets: the downtown central business district and the suburban market. The downtown office market is where the pain is being felt. We’ve got a fourth quarter vacancy rate of 29.5%, which equates to about 13 million vacant square feet. With more consolidation expected in the energy sector the trend is for vacancy to breach the 30% vacancy level.

The suburban market is seeing higher vacancy but leasing activity is happening. Companies that occupy offices in the suburbs generally aren’t energy sector-related for the most part, so there seems to be a bit of demand there.


There’s the restaurant business and then everybody else. Sadly, we expect anywhere from 25% to 35% of the local restaurants to be gone by next spring. Even though a vaccine is in play now, it’s looking like it won’t be until fall that things begin to return to “normal.” So it will be a tough time for restaurants and many won’t survive. For all the other retail, the second half of next year will show more growth as there is much pent-up demand for goods and services. In addition, the travel industry will pick up as well.

See this related article MORE OUTLOOK 2021:   Calgary  |  Edmonton  |  Halifax  |  Toronto  |  Waterloo   |  Vancouver


On the investment side, multifamily has been one of the more attractive tickets. A lot of pension funds and high net worth investors are looking at this asset class. It will be more of the same in 2021, with strong demand for those assets. We anticipate a bit of a price reduction given that rents have come off a bit, but in general multifamily has probably been the least hit asset class.

Hidden opportunities

Calgary and Edmonton, we go through booms and busts each decade. This is the fifth recession I’ve lived through in my career. And Alberta always bounces back. If you believe in the adage buy low sell high, there are some pretty good discounts in office and some of the other asset classes. Some say we’re never going back to oil and gas. Well, look at facts: until there’s a replacement energy source we’re going back to oil and gas. So we’re optimistic there is going to be a lot of foreclosure real estate coming onto the market and we’ll see a lot of trading volume because of that sentiment that the energy market will rebound.

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