CALGARY LEASING FORUM EDMONTON 2007 MARKET REVIEW OCTOBER 24, 2007
Downtown Office Edmonton
Downtown Vacancy Rate (All Classes) 16.0% 14.0% 13.8% 13.2% 12.0% 11.4% 11.8% Vacancy Rate 10.0% 8.0% 6.0% 8.6% 7.1% 7.4% 5.1% 4.9% 4.0% 4.0% 2.0% 0.0% 2000 2001 2002 2003 2004 2005 2006 2007 YTD 10 Year Average - 11.5% 2007 F 2008 F
Downtown Absorption (All Classes) 350 300 308.7 257.6 297.3 329.9 Absorption in SF (000's) 250 200 150 100 165.7 199.8 192.5 91.3 207.0 50 0 8.9 2000 2001 2002 2003 2004 2005 2006 2007 YTD 2007 F 2008 F
Downtown Net Asking Rents $40.00 $35.00 Rent per Square Foot $30.00 $25.00 $20.00 $15.00 $10.00 $5.00 $0.00 2000 2001 2002 2003 2004 2005 2006 2007 YTD 2007 F 2008 F Class 'AA' $11.00 $11.00 $9.83 $9.25 $9.20 $14.80 $23.00 $30.60 $32.00 $34.00 Class 'A' $7.23 $7.41 $8.45 $8.57 $8.33 $11.53 $15.00 $19.62 $23.00 $28.00 Class 'B' $5.36 $5.83 $5.67 $6.40 $6.93 $8.83 $13.48 $17.16 $18.00 $22.00 Cla ss 'AA' Cla ss 'A' Cla ss 'B'
Downtown Large Blocks of Contiguous Space (> 50,000 SF) 11150 Jasper Ave 177,300 SF Beaver House 71,129 SF Professional Building 210,587 SF
Top Lease Transactions Downtown Office Property Name ING Building Revillon Building Address Tenant Size(SF) Lease Type 10130 103 Street 10320 102 Ave Enbridge Pipelines Legal Aid Society of Alberta 68,350 Expansion/ Renewal 17,518 Expansion Churchill Building 10015 103 Avenue City of Edmonton 12,220 New Boardwalk/ Revillon Building 10320 102 Ave New West Enterprise Property Group 8,500 New
Downtown Office Summary 2007 YTD Vacancy decreased by 2.1% from 7.6% at third quarter of 2006 to 5.1% at third quarter of 2007. Year-to-date absorption in 2007 is 297,301 square feet. This is roughly 200,000 square feet higher than at the same time last year. The sublease market accounted for only 74,028 (10.5%) square feet of vacant space, compared to 633,606 (89.5%) square feet of direct vacant space at third quarter of 2007. The economic boom in Edmonton has lead to a drop in vacancy rates and significant increases in rental rates in almost every office class.
Suburban Office Edmonton
Suburban Vacancy Rate (All Classes) Vacancy Rate 12.0% 10.0% 8.0% 6.0% 4.0% 10.8% 9.5% 9.3% 10.1% 9.0% 8.2% 7.0% 4.3% 3.9% 5.2% 2.0% 0.0% 2000 2001 2002 2003 2004 2005 2006 2007 YTD 10 Year Average - 10.1% 2007 F 2008 F
Suburban Absorption (All Classes) 400 364.0 350 317.4 Absorption in SF (000's) 300 250 200 150 100 235.8 269.4 240.9 81.4 183.5 191.0 50 46.9 48.9 0 200 2001 2002 2003 2004 2005 2006 2007 YTD 2007 F 2008 F
Suburban Lease Rate Ranges $40 $35 $35.00 Rent per Square Foot $30 $25 $20 $15 $10 $5 $10.00 $20.00 $10.00 $20.00 $11.00 $20.00 $8.00 $18.00 $8.49 $25.00 $10.00 $23.00 $10.00 $0 Whyte Ave. Southside Eastgate 149 Str. West End 124 Str. Kingsway
Suburban Large Blocks of Contiguous Space New Developments (> 50,000 SF) 51st Avenue Business Centre 80,000 SF Commerce South Office Park (Building D) 74,000 SF (Building E) 68,000 SF The Steppes 73,250 SF 91 st Street & Ellwood Drive 50,000 SF
Top Lease Transactions Suburban Office Property Name Address Tenant Size(SF) Lease Type Commerce South Office Park Coronation Plaza 8615 51 Ave 14310-111 Avenue YottaYotta 6020 104 Street Colt Engineering Capital Health 74,000 New 35,000 New YottaYotta 28,520 Renewal Coronet Building 8403 - Coronet Road Flint Energy 16,280 Expansion
Suburban Office Summary 2007 YTD Vacancy decreased by 3.6% from 7.9% at third quarter of 2006 to 4.3%% at third quater of 2007. Absorption in 2007 YTD is 190,950 square feet. At third quarter of 2007, the sublease market increased in size to 31,278 square feet from 22,240 square feet at third quarter of 2006. Rental rates have increased dramatically in the last year from an average of $11.54 at third quarter of 2006 to $14.47 at third quarter of 2007.
Industrial Edmonton
Industrial Availability Rate 8.0% 7.5% 7.4% 7.0% 6.4% 6.4% 6.6% 6.0% 5.8% Availability Rate 5.0% 4.0% 3.0% 2.0% 4.0% 1.9% 1.7% 1.7% 1.0% 0.0% 2000 2001 2002 2003 2004 2005 2006 2007 YTD 10 yr. Average = 3.9% 2007 F 2008 F
Industrial Absorption Graph Absorption in SF (000's) 4,500 4,000 3,500 3,000 2,500 2,000 1,500 1,000 500 0 3,116.6 1,863.1 1,369.8 529.5 95.1 1,211.0 4,190.0 3,633.3 2000 2001 2002 2003 2004 2005 2006 2007 YTD 4,115.7 3,412.7 2007 F 2008 F
Average Net Lease Rates $9.00 $8.77 $8.80 $8.90 $8.00 $7.40 $7.00 Rent per Square Foot $6.00 $5.00 $4.00 $3.00 $2.00 $4.25 $4.50 $4.60 $4.70 $4.85 $5.00 $1.00 $0.00 2000 2001 2002 2003 2004 2005 2006 2007 YTD 2007 F 2008 F
Top Lease Transactions Industrial Address Tenant Tenant Industry 12810 170 Street 67 Avenue & 67 Street 15423 131 Avenue 50 Street & Whitemud 4108 84 Avenue Kuehne & Nagel Logistics Alberta Oil Tool Size(SF) Transportation 400,000 Manufacturing 121,000 XS Cargo Warehouse 108,000 SS Inc. Distribution 90,529 CoLinx Distribution 66,000
Industrial Summary 2007 YTD The Edmonton industrial market absorbed 905,724 SF in the third quarter of 2007 causing YTD absorption to reach 3,633,324 SF. Average asking net lease rates have increased in the third quarter and now sits at $8.77 PSF. The highest rents are once again in Nisku/Leduc, with the lowest rents being found in the Northeast. Overall availability rates have dropped significantly from 3.0% at third quarter of 2006 to 1.9% at third quarter of 2007. The industrial construction in Edmonton is at record levels. 737,273 SF was added this quarter, with another 3.2 million SF under construction. A further 3.7 million SF of industrial space is currently proposed.
Retail Edmonton
Overall Retail Vacancy Rate 16% 14% 12% 12.3% Vacancy Rate 10% 8% 6% 4% 8.2% 6.1% 4.9% 4.1% 3.7% 3.5% 3.2% 2% 0% 2000 2001 2002 2003 2004 2005 2006 YTD 2007
Edmonton Retail Trade Areas: 2Q 2007 There is 1.5 million SF of retail space in this trade area, representing 5.6% of the total retail space inventory. There is 2.1 million SF of retail space in this trade area, representing 7.6% of the total retail space inventory. Vacanc y 4.1% There is 5.4 million SF of retail space in this trade area, representing 19.7% of the total retail space inventory. Vacanc y 12.5% Vacanc y 2.6% There is 2.5 million SF of retail space in this trade area, representing 9.3% of the total retail space inventory. There is 7.1 million SF of retail space in this trade area, representing 25.9% of the total retail space inventory. Vacanc y 1.5% Vacancy 5.4% Vacanc y 1.2% Vacanc y 3.6% Vacanc y 4.4% Vacanc y 1.5% There is 1.2 million SF of retail space in this trade area, representing 4.3% of the total retail space inventory. There is 5.1 million SF of retail space in this trade area, representing 18.7% of the total retail space inventory. Edmonton Market There is 2.4 million SF of retail space in this trade area, representing 8.8% of the total retail space inventory. Vacancy: 3.2%
Edmonton Retail Market New Developments: -Windermere: 1,200,000 SF, anchored by major supermarkets, home renovation centres, banks. -Riocan: 524,000 SF, anchored by Home Depot, Superstore, and Staples. -Namao Centre South: 299,807 SF, anchored by Rona and Sobey s. -Hopewell: 120,000 SF, anchored by Safeway. Rental rates: -Edmonton power centers range between $25.00 psf and $40.00 psf. -Regional shopping centres such as West Edmonton Mall and Kingsway Garden Mall are seeing rates for certain transactions over $100,00 psf.
Top Lease Transactions Retail Property Name Address Tenant Size (SF) South Edmonton Common Westmount Shopping Centre Capilano Northtown Mall South Edmonton Common Calgary Trail & 23 Avenue Wal-Mart 214,000 St. Albert Trail & 111 Avenue Home Depot 91,000 Terrace Road & 50th Street Canadian Tire 75,000 137 Avenue & 97 Street T & T Food Market 50,000 Calgary Trail & 23 Avenue Ashley 41,000
Retail Summary 2007 YTD Vacancy decreased by 0.3% from 3.5% at mid-year 2006 to 3.2% at mid-year 2007. This is the lowest recorded retail vacancy rate since the survey commenced in 1991. The lowest vacancy rate was in the Southwest at 1.2% The highest vacancy rate was in the Northwest at 12.5% Inventory has grown over the last year by roughly 600,000 SF and currently sits at 27.3 million SF
For more information, please contact: Dave Young, Senior Vice President, Managing Director CB Richard Ellis Alberta Limited 1220, 10180 101 st Street T5J 3S4 T 780 424 5475 F 780 426 1995 dave.young@cbre.com