Located in the Alberta Foothills, Calgary is known for its entrepreneurial spirit and serves as Canada's energy capital. World-leading oil and gas exploration, production and service companies are based here and, due to its central location between BC and other Prairie provinces, the city provides a regional transportation link to Asia and the U.S. while fostering national and international trade. Calgary's strong economic fundamentals include a diverse, highly-educated, and rapidly-expanding population of 1.2 million, which exceeds national averages in income, employment and several other categories. In addition to energy, major industries include tourism, transportation and - thanks to the presence of internationally-recognized universities and colleges - high-technology. Consequently, Calgary has a robust commercial real estate market. Over the past decade, the office, retail, industrial and investment sectors have all displayed strength while facing a number of global economic challenges. Thanks to the city's wide-open landscape, real estate market expansion is not hindered by geographic barriers like it might be in other locales.
Due to the strong presence of the energy industry, Calgary has more head offices than any other Canadian city except Toronto. The downtown office market caters mainly to large users who operate globally and typically require more than 100,000 square feet of space. As a result, cycles tend to be short, with demand for new development coming on strong in upswings while down cycles are met with great resiliency.
Due to the city's high employment and income levels, the retail sector has expanded steadily over the past five to 10 years. In addition to encouraging large national chains to establish more locations, Calgary has attracted increasing numbers of American retailers. A lack of good-quality space, particularly in the northwest and southwest, has kept vacancy levels low and enabled rental rates to improve steadily.
Calgary's industrial real estate sector benefits from the presence of steadily-growing local, national and international oilfield service, warehouse-and-distribution, and transportation firms. Unlike a number of other cities, Calgary is not limited by a lack of industrial land. A strong leasing market keeps vacancy levels low while the availability of large parcels of developable land ensures a steady source of new supply.
Institutional investors - notable pension funds, REITS and public companies - are attracted to Calgary in increasingly-large numbers, along with private players who favour Alberta's low corporate tax rates and the absence of a provincial sales tax. While institutional investors dominate the office sector, they have also invested billions in the retail, industrial and multi-family markets. Private investors tend to have stronger footholds in the retail, industrial and multi-family sectors.
Avison Young's roots in Calgary date to the formation of the company itself in the late 1970s. In recent years, Calgary brokers have negotiated several large transactions in all asset categories while partnering on major projects with other Avison Young offices in Canada and the United States. Avison Young's Calgary office is particularly well-suited for energy-related partnerships with the company's Houston brokerage, and collaborates frequently with the Edmonton, Vancouver and Toronto locations on a variety of office, retail, and industrial leases, acquisitions and dispositions.