Spring: A Red Hot Commercial/Industrial Market

Aaron predicts a RED HOT commercial/industrial market!

With the snow almost gone, warming and melting temperatures are trending toward a RED HOT commercial/industrial market. 🌶️

Let’s discuss some of the drivers that have spurned our recent industrial/commercial demand surge.

End of Covid Restrictions

Once Alberta lifted the mask mandate, more people got on with business, leading to increased activity in our marketplace.

The Rise of Oil Prices

The European situation has driven oil prices back over $100 a barrel despite the hardship of Russia and Ukraine citizens. Alberta’s economy, which still depends on oil production, will benefit. 

Shipping Disruption

Shipping Disruption is still a consideration. The cost of building materials, partly driven by inflation, has raised the cost of building or replacing commercial buildings. This has also increased the selling price of existing buildings which, in turn, raises the leasing rates of commercial/industrial products as Cap Rates are adjusted.   

Also, keep in mind that the American industrial sector is also on fire which puts more strain on available materials, from metal studs and lumber to drywall. Materials are in high demand. 

Out-of-Town Interest 

 Owner/Users and Investors are flocking to our city. These buyers are flush with cash and ready to purchase. Buyers have been coming to Calgary as our prices are still reasonable. 

With the prices of real estate in Vancouver, Toronto and now Montreal financially out of reach for many companies, they are looking to Alberta to secure real estate. This effect has been part of the lower product and higher resale prices.  

Amazon Effect

With two massive Amazon locations being built in Dufferin/Point Trotter (respectively 1.2m and 2.8m SqFt each), a quiet developer has purchased the remaining land acre parcels the city had for sale. This, in turn, will spur the City of Calgary to think about releasing new developable lands which, at today’s inflation, costs are much higher than the previous price per Acre. 

Higher land costs + higher construction costs = a new level of prices not seen before in Calgary’s real estate market. 

Renewed Optimism

With renewed optimism, and a strong dollar and oil backup, Alberta-based companies are getting back to business. We are experiencing higher than previously seen prices of resale of industrial properties with renewed optimism that Alberta’s fortunes have turned. Yet again!

With all that said, our team is ready for this red hot commercial/industrial market, and we look forward to helping you navigate what’s ahead!

Feel free to reach out to chat. I welcome it! 

Let’s talk about your next investment! Call/text me @ 403-200-4026.