CBRE’s Calgary Cap Rate Report

 In News

Recently, CB Richard Ellis (CBRE) published their quarterly “Canadian Cap Rates & Investment Insights” report for the second quarter of 2018. The full report can be accessed here. After analysing this report, Top Commercial Listings has broken down the most important factors that pertain to you as an investor in Calgary.

Q2 2018 TC

The Canadian economy affected Calgary specifically by national factors such as Bank of Canada’s increase in interest rates as well as concerns with potential global trade crisis.

However, with this in mind, investment activity in Calgary continues to increase with the capital spotlight focused primarily around the industrial and multi-family markets. This represents no change in cap rate in both industries from Q1 to Q2 of 2018. However, from a more historical outlook, both industries have experienced a steady decline in cap rates over the last decade.

The office sector still seems to be recovering from the recession, however, the industry remains active as well with the majority of trades include opportunistic players “who are pricing the transaction on a discount to replacement cost basis”.

Overall, cap rates remain unchanged as improvements in leasing fundamentals have been offset by ambiguity in future economic growth. This report states that downward pressure is expected to build as Calgary’s commodity sector advances and concerns with economic uncertainties are resolved.

To read the full report with additional information on investment trends in other Canadian cities, click here.

If you have any questions or concerns on the cap rates in Calgary and what it means for you and your business, feel free to contact Aaron Gunn at aaron@topcommerciallistings.com

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