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Inflation, construction costs, along with swaths of office and retail vacancies in Edmonton’s Downtown core are not insurmountable problems, industry leaders heard at a Wednesday commercial real estate forum.
Hosted by NAIOP Edmonton, the 2023 Broker Panel heard from representatives from office, retail, industrial, investment and multifamily spaces.
Mark Anderson, vice-president of CBRE Edmonton, said it’s an opportunity to share what the private sector is experiencing but it is not distinct to Edmonton.
“I think it’s really important that we recognize that this is not a uniquely Edmonton problem. This is something that’s been experienced in Vancouver, in Toronto,” he told reporters. “Us Edmontonians, sometimes we’re just so good about being self-deprecating. It’s easy for us to get into that echo chamber thinking that this is just our problem. So it’s not deeply alarming.”
Anderson said the office vacancy rate in Edmonton is reaching 23 per cent, which has been a lasting impact from the pandemic as offices retool their workplace strategies and employee concerns over flexibility to work from home.
Retailers are also facing a difficult challenge. Recently, Sport Chek announced it would be leaving Edmonton City Centre mall. Anderson said retailers need people in the core in order to have a viable business model.
“It’s really critical, once again, to bring people back Downtown, and then the business case is for these retailers to stay and grow and open up new businesses is going be a heck of a lot stronger.”
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One of the concerns has been safety and security in Edmonton’s Downtown, but Anderson said some promising moves have been made by the city and the Alberta government to address houselessness, mental health issues and overall social disorder.
Anand Pye, executive director of NAIOP, said the organization has been advocating for policies that would bring opportunities for capital and investment to the city.
“Make sure that taxes are competitive with other jurisdictions, make sure that we’re positioning ourselves in a way that attracts a lot of investment and capital from other markets to come here to build things and to start new businesses,” he said. “Then we also work on how quickly we can translate a business need into a new building or repurpose old buildings.”
During the panel, Anderson said the market has been in a state where it takes two steps forward and one step back. But there are promising signs. He alluded to an upcoming announcement by a company that has chosen to relocate its head office to Edmonton and will occupy 42,000 square feet.
He noted it will take time to bring people back to the city’s centre, but the private sector is leading the way.
“This is still a really important conversation to have, and we need to start shining some light on these conversations so we can actually have some meaningful progress towards bringing people Downtown,” he said.
Coun. Anne Stevenson, whose ward includes Downtown, attended the panel Wednesday and said she is pleased with the optimism and is looking forward to a positive 2023.
“The success of our Downtown really becomes a self-fulfilling prophecy, focusing on the positives, encouraging people to come down, while not shying away from the challenges and the difficult conversations we need to have,” she said.
“It’s really looking holistically at that positive momentum that the Downtown is gaining.”