British Columbia real estate developers are betting big on a Calgary recovery, spearheading the biggest speculative plays in Alberta’s biggest city.
The gambles are taking place while nearly a fifth of Calgary’s downtown office towers have gone dark, condo starts have fallen 60% in the past year and residential foreclosures have soared 30% from two years ago. Analysts contend Calgary real estate values could fall further unless oil prices rally from their current eight-year lows.
Spec leaders include Vancouver-based Qualex-Landmark, which just completed the fourth-largest concrete pour in Calgary history when it started its 34-storey, $110 million Park Point condo tower in the Beltline area.
Approximately 1,200 cubic metres of concrete was poured continuously, spanning 14.5 hours on November 19. There were approximately 130 concrete deliveries made to the Park Point site with 25 trucks running in rotation.
Blocks away, Vancouver-based Embassy Bosa has broken ground on a 500-unit twin-tower condominium project, a joint venture with RioCan Real Estate Investment Trust that will complete in 2018.
Meanwhile, Hungerford Properties and Beedie Development Group, both based in Vancouver, have started work on speculative industrial and office developments.
Hungerford’s Fairmore Business Park is one of three recent commercial condo developments by Hungerford, and the only new office and warehouse project started in south central Calgary this year.
Beedie Development Group has three industrial condo developments under construction in the Calgary region, including its Highland Common Business Centre in suburban Airdrie, approximately 15 minutes from Calgary’s downtown.
With pricing starting at $165 per square foot, Jorden Dawson, Beedie’s director of industrial development in Calgary, said they are seeing a lot of interest and activity. “A lot of [Calgary] businesses see the value in owning their own facility,” he said.
Other investors are apparently circling Calgary’s commercial real estate market. Total sales of commercial property in the third quarter of 2016 reached $671 million, a 46% increase compared with the same period in 2015, according to Altus Group.
Check out BIV’s podcast for the week of November 23, 2016: