The province of Alberta's commercial real estate is phenomenal for the first quarter of 2022 as the province’s strong economic forecast, at 5.8 percent, is seen to lead the country in terms of GDP.

Alberta’s strong outlook on the economy has attracted investors both on the local and national stage. The province is seeing expansion from industrial and multi-unit developers and investors.

According to RBC Economics’ Provincial Outlook reported March 2022, Western Canada is set to benefit from the improvements on commodity prices this year due to recent geopolitical events.

Experts said “huge amounts of money are going into Alberta” attributing it to the “new methods to tap into northern Alberta's oil supply allowing it to compete with the global petroleum industry.”

Edmonton

From January to April this year, the city has attracted $832M investments in commercial real estate. The Network reports that multi-family properties were number one on investors’ lists this year.

While year-to-date investments were at a four-year low, they are not far out of line from the same quarter over the last years. The multi-family sector is ranked first on the investors’ list, followed by the industrial sector.

The multi-family industry totalled $212 million worth of assets sold in the first quarter of the year, while industrial properties drew $131 million.

The slight slowdown in investments is nothing to worry about as the commercial real estate in the city continues to see growth this year.

One of the major industrial activities in the city is the 2.9M sqft Amazon facility. This speaks volumes about the booming industrial constructions in the province.

Experts' forecast shows that as the country recovers from the effects of the COVID-19 pandemic, it is expected that increased traffic and return to the office will bring in more growth to the commercial real estate industry throughout the rest of the year.

Edmonton’s affordability is its edge over other major business cities in the whole of Canada. The city’s cost per acre is only a fraction compared to properties located in neighbouring provinces like British Columbia.

This is among the factors that local and national developers are drawn to the city.

Looking back, in 2021, as Edmonton Region Real Estate Investment Sales Summary reported, about 250 industrial properties with a total value of $892 million have been sold. This covers multibay, single-tenant, owner-user and condominium properties.

Calgary

Commercial real estate activities in Calgary topped $1.6-billion. This positive trend shows that the economy in Alberta is making a comeback.

While this is largely attributed to the $1.2-billion sale of downtown’s iconic Bow skyscraper, Justin Mayerchak, executive vice-president and partner at Colliers’s Calgary office said there has been a significant increase in leasing activity for commercial property in Calgary.

According to RBC Economics' Provincial Outlook released on March 10 this year, the booming commercial real estate activity in Calgary is attributed to the strongest economic expansion underway in Alberta since 2011.

Similarly, Colliers reports that the “10-year high in oil pricing is sparking optimism in the energy sector and, by extension, Calgary’s downtown office market.”

Mayerchak reported that after seven years, Calgary has seen two consecutive quarters of positive absorption of office space.

According to Avison Young, this positive trend in absorption is attributed to the Class AA buildings in the downtown core. The soaring commodity prices have strengthened the level of comfort needed to make longer-term lease commitments in the downtown core.

Industrial property, on the other hand, is seen with outstanding growth. Mayerchak reported that the vacancy rate has dropped 50 percent in the past year – the lowest since 2014.

Major key players include Amazon, Lowe’s, Home Depot, Canadian Tire, and Walmart which expanded their industrial spaces in the province. Calgary serves as the logistics and distribution hub for western Canada.

The multi-family sector is also reaping benefits from the strong economic growth in the province. Statistics Canada reported 16,690 newcomers in the third quarter of 2021, a seven-year high record.

In the coming years, the city is expected to have an increased residential density in the downtown core.

Experts and researchers noted that Alberta’s largest province is in the midst of an industrial real estate boom.

Red Deer

Smaller cities in Alberta are likewise reaping the economic growth in the province.

In 2021, the value of major projects in Red Deer was $1.1 billion.

The City of Red Deer is expected to have more development and expansion in the petrochemical industry. Leasing activities are booming in the city with new businesses and expansions.

According to the government website of the province of Alberta, the value of major projects in Red Deer greatly increased 153.8% year-over-year and increased 423.8% in the last five years.

Affordability is also an attractive factor in this part of the province. According to the latest national rent report, Red Deer ranked 34th in June in the list of 35 cities, from the most expensive to most affordable, at Rentals.ca and Bullpen Research & Consulting.

The average monthly rent for a one-bedroom was $988 and the average monthly rent for a two-bedroom was $1,447.

As of current, the City of Red Deer is developing a capstone project that is projected to add more foot traffic to the historic core of the city.

The city’s manager of land and economic development, John Sennema, “envisions a thriving Capstone, with plenty of new businesses and recreational opportunities to serve a high-density neighbourhood.”