Here’s some reasons it’s good for Edmonton during this recession.
Depending on who you talk to, Edmonton’s stadium district is either here right when it’s needed or couldn’t come at a worse time. The revitalization project is coming as Alberta’s economy continues to shrink, but the excitement and investment into the area has boosted the overall stats of commercial real estate in the city, leaving the city with some positive notes as other cities in the West continue to spiral downward.
In particular, Edmonton’s land sales, down thirty percent year-to-year, are a classic sign of a slowing economy. But even with these big problems, Edmonton’s Ice District is giving the downtown core some stats we can celebrate. Coun. Mike Nickel, in speaking with the Edmonton Sun, “said the downtown community revitalization levy numbers have been looking good but that's only a snapshot of the city's real estate health.”
Nickel is of course referring to the 90’s “overbuild:” the city’s stimulus package that saw lower tax revenue and increased building, which caused the city to dip into its fiscal stabilization reserve to make up for lost revenue. The plan worked, in a sense, giving Edmonton plenty of commercial space. Now, some twenty years later, that space is facing problems as the city continues through its economic hardships.
Such changes means that Edmonton could be seeing more focus downtown, and maybe even a curbing to its near-notorious sprawl.
Despite the bad news for places outside the Ice District, Edmonton has yet another stat to feel comfortable about: the commercial vacancy rate. Empty office buildings have been plaguing the entire country, from Ottawa to Vancouver, and much of the West’s downsizing from oil prices has only compounded the issue. But in Edmonton, vacancy rates were stable up until mid-year, the most recent available data. Of course, new development downtown and elsewhere could lead to vacancy rates increasing next year, as new buildings have a harder time finding renters.
Rising vacancy rates aren’t ideal for real estate investors, but they are great for renters. New buildings, and older ones with leftover space, have to get creative and competitive with their advertising and offers, which puts startups and prospective renters in a good position. So if you’re looking for office space, this next year could be very good for you indeed.