Up to 600,000 sq. ft. of new suburban office space will hit Calgary markets this year, and some companies might think twice about the expense of downtown offices.
There won’t be an exodus from downtown, says Matt Binfet of J.J. Barnicke Calgary Ltd. real estate, but some companies are looking at the cost of downtown offices.
If they aren’t in the oil and gas business or another industry that requires being downtown, and don’t have oilpatch clients, leaving the core could be on the table.
Jim Rea, a principal at J.J. Barnicke, says Class A office space is $6 a sq. ft. cheaper to rent in the suburbs than downtown. Parking is still a bargain outside the core.
Binfet points out that other amenities besides parking have improved in suburban office markets. Various services have been attracted to clusters of offices, warehouses and factories, creating new employment centres.
Binfet sees a stable vacancy rate as leasing activity catches up to recent developments.
Peter Mayerchak, also with J.J. Barnicke, says that 500,000 to 600,000 sq. ft. of new office construction will be on the market in the suburbs. With rents up to $16 a sq. ft., tenants can have a design-build project for the same money.
Other commercial real estate firms estimate similar amounts of suburban office construction. Colliers International projected more than 500,000 sq. ft. of new construction in its outlook for 2001, released earlier this month. CB Richard Ellis earlier anticipated at least 500,000 sq. ft., all in the suburbs.
Rea says downtown will still remain a strong market for offices. OPEC has kept oil prices high and new pipeline capacity allows Alberta companies to sell natural gas to the United States at record high prices.
The supply of office space will diminish as companies grow. A decline in the office vacancy rate will put pressure on marginal rents until vacancies hit five per cent.
As it is, three new towers added 2.5 million sq. ft. to the downtown office market in two years. No developer has announced another tower.
Developers need a major tenant to start a building, and the process takes 24 to 30 months. Thus a new downtown office tower wouldn’t enter the leasing market until late 2003, says Rea.
J.J. Barnicke’s figures for Dec. 31 show downtown office availability at 10.7 per cent, up from 10.2 per cent at the end of the third quarter. Barnicke attributes that to the TCPL tower’s adding just over 900,000 sq. ft. to the market. Barnicke expects availability to decline to 9.17 per cent this quarter.
A Calgary telecom company has licensed software that will let phone calls track the people they’re intended for.
Shift Networks Inc. has signed a three-year licence deal with Voice Mobility International Inc. to sell Voice Mobility’s Unified Communications software suite. Voice Mobility has its headquarters in Richmond, B.C.
The software will put office and home phones, pagers, fax machines and voice mail on one number assigned to the user. Calls can be programmed to cascade from one device to the next in a sequence chosen by the user, says Shift Networks president Keith Young.
Shift Networks serves small to medium-sized businesses in multi-tenant buildings as a building local exchange carrier, or BLEC, providing voice and data services to tenants.
It installed its first network node in November and plans to serve 50 buildings in Calgary this year, expanding to other cities later.
Voice Mobility will install a server with a 10,000-customer capacity at Shift’s network centre in Calgary.
Voice Mobility trades as VMII on the Nasdaq OTC and as VMY on the Frankfurt Stock Exchange. It closed Friday unchanged at $2.812 on the Nasdaq OTC.
Online real estate company 411HomeNet Inc. last week announced a partnership with an American loan company, LoansDirect Inc.
411HomeNet said in a release that the move would add mortgage products and services for U.S. homebuyers to its site in addition to what’s already there for Canadians. The link is from the buyer services directory on the 411HomeNet Web site.
LoansDirect is licensed in 47 states. It lets borrowers manage all of their mortgage transactions online. Loans can close online in as little as four days.
HomeNet lets homebuyers check their mortgage options from several lenders at once on its site. It has home profiles and virtual tours on its Web site and real estate professionals in local offices across North America.
Web Watch:
www.jjb.com
www.voicemobility.com
www.shiftnetworks.com
www.411home.net
