There’s a chunk of character space for lease downtown with historical roots going back to the second oil boom.
The period of growth that started with Leduc No. 1 oil discovery in 1947 turned Calgary into a modern city with modern buildings.
The Barron Building, at 610 8th Ave. S.W., was Calgary’s first skyscraper when it was built in 1951.
It was a milestone on the road from Cowtown to Energy Capital of Canada.
Jack Barron built it on spec and drew oil company offices to Calgary, despite Edmonton’s closer proximity to the new oilfields, says Blake O’Brien, president of Newel Post Developments Ltd., owner of the building since 1993.
Shell and Mobil were among its earliest tenants.
It is truly a character space, with feature brick walls and exposed concrete. The tan brick, Art Deco 11-storey building harkens back to the kind of business structures found earlier in the 20th century.
“It could be a standard office space if a tenant wanted, but we just spent a considerable amount and exposed the board-formed concrete,” says O’Brien.
Fortunately, he adds, the concrete pattern is very trendy and expensive to duplicate.
After buying the building, O’Brien increased tenancy through the 1990s and renovated to upgrade the structure to Class B from Class C office property.
About 15,000 sq. ft. are leased now and efforts are focused from the third floor upwards. A major tenant taking 30,000 or 40,000 sq. ft. of space would have naming rights.
Peter Merchant, of Avison Young Commercial Real Estate, notes that from the fifth floor up, the windows open. “You can’t get any better air than fresh air,” he adds. “If tenants are looking for character space, there are feature brick interior walls and historical items such as terrazzo floors in the lobby.”
Newel Post is seeking a gross rent of $15 to $19 per square foot, with improvements at the tenant’s cost.
The space would be ideal for engineering or design companies, or any industry in which open-plan offices are popular, says Merchant.
He also points out the advantages of nearby downtown amenities, including shopping, entertainment and the LRT.
The economic downturn hit the suburban office market in Calgary in the second half of last year, says J.J. Barnicke Calgary Ltd.
Suburban office vacancies rose to 10.6 per cent from 9.2 per cent and vacancies in the Beltline rose to nine per cent from 8.6 per cent, the firm said in its fourth-quarter outlook.
For the first quarter this year, the company sees a rise in total vacancies and an increase in sublease space and packages of less than 30,000 sq. ft. Barnicke also forecasts a demand for suburban space in the second half of the year as the economy recovers.
Leasing in 2001 involved a wide range of companies, where high-tech companies had driven the suburban market in 2000.
In the high-tech northeast sector, companies strove to cut costs with measures including subleasing extra space. The year-end 14.2-per-cent vacancy rate was 35 per cent sublease space. At the end of the third quarter, Barnicke figures show vacancies at 12.2 per cent in the northeast.
Vacancies declined to 6.8 per cent from 7.4 per cent in the southeast. In the southwest, vacancies rose to 10.2 per cent from 6.7 per cent. A number of older buildings suffered tenant losses.
Meanwhile, Barnicke reports the downtown office vacancy rate at 9.76 per cent, up from 9.25 per cent at the end of the third quarter.
Headlease vacancy is up by less than 100,000 sq. ft., but sublease space is up 200,000 sq. ft. since the first quarter of last year.
A shopping centre and a distribution warehouse have changed hands in purchases by a real estate investment trust.
H&R Real Estate Investment Trust announced that it acquired the Revy Home Improvement Centre at 2665 32nd St. N.E. and the Purolator Distribution Warehouse. H&R also announced purchases in Ontario.
H&R REIT also sold the Shawnessy Town Centre for $48.1 million. H&R REIT units are listed on the Toronto Stock Exchange.
The south Calgary shopping centre has been bought by a joint venture – RioCan Real Estate Investment Trust and Kimco Realty Corp.
The partners have also agreed to buy four more shopping centres – three in British Columbia and one in Quebec. The joint venture will have nine centres totalling two million sq. ft. and costing about $300 million.
RioCan units are listed on the TSE. Kimco is listed on the New York Stock Exchange.
