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Calgary has been hit hard by the oil and gas downturn. This is largely due to market saturation by energy-industry tenants, which make up 75 percent of downtown office inventory.
Class A office rental rates are down 41.7 percent year to date. And while subsequent transactions seem to test the floor, rates are expected to continue dropping as 3.8 million square feet of new construction comes to market.
So what is happening with Calgary offices? Subleasing. Since Q3 2014, the downtown sublease market has grown 181.0 percent, and we estimate that an additional 1 to 2 million square feet of office space is currently leased, but vacant.
What does this mean for both tenants and landlords in the local energy sector? Download Calgary's 2015 Energy Outlook to learn more.
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