CALGARY LEASING FORUM EDMONTON 2007 MARKET REVIEW OCTOBER 24, 2007 - - PowerPoint PPT Presentation

CALGARY LEASING FORUM

EDMONTON 2007 MARKET REVIEW

OCTOBER 24, 2007

Downtown Office Downtown Office Edmonton Edmonton

13.8% 11.4% 13.2% 8.6% 7.1% 7.4% 5.1% 4.9% 4.0% 11.8%

0.0% 2.0% 4.0% 6.0% 8.0% 10.0% 12.0% 14.0% 16.0% 2000 2001 2002 2003 2004 2005 2006 2007 YTD 2007 F 2008 F Vacancy Rate 10 Year Average - 11.5%

Downtown Vacancy Rate (All Classes) Downtown Vacancy Rate (All Classes)

8.9 165.7 308.7 199.8 192.5 297.3 329.9 207.0 91.3 257.6

50 100 150 200 250 300 350 2000 2001 2002 2003 2004 2005 2006 2007 YTD 2007 F 2008 F Absorption in SF (000's)

Downtown Absorption (All Classes) Downtown Absorption (All Classes)

Downtown Net Asking Rents Downtown Net Asking Rents Downtown Net Asking Rents

$0.00 $5.00 $10.00 $15.00 $20.00 $25.00 $30.00 $35.00 $40.00

R ent per Square Foot

Class 'AA' Class 'A' Class 'B'

Class 'AA' $11.00 $11.00 $9.83 $9.25 $9.20 $14.80 $23.00 $30.60 $32.00 $34.00 Class 'A' $7.23 $7.41 $8.45 $8.57 $8.33 $11.53 $15.00 $19.62 $23.00 $28.00 Class 'B' $5.36 $5.83 $5.67 $6.40 $6.93 $8.83 $13.48 $17.16 $18.00 $22.00 2000 2001 2002 2003 2004 2005 2006 2007 YTD 2007 F 2008 F

Professional Building – 210,587 SF Beaver House – 71,129 SF

Downtown Large Blocks of Contiguous Space (> 50,000 SF) Downtown Large Blocks of Contiguous Space (> 50,000 SF)

11150 Jasper Ave – 177,300 SF

Top Lease Transactions Top Lease Transactions – – Downtown Office Downtown Office

Property Name Address Tenant Size(SF) Lease Type ING Building 10130 – 103 Street Enbridge Pipelines 68,350 Expansion/ Renewal Revillon Building 10320 – 102 Ave Legal Aid Society of Alberta 17,518 Expansion Churchill Building 10015 – 103 Avenue City of Edmonton 12,220 New Boardwalk/ Revillon Building 10320 – 102 Ave New West Enterprise Property Group 8,500 New

Downtown Office Summary Downtown Office Summary – – 2007 YTD 2007 YTD

• Vacancy decreased by 2.1% from 7.6% at third quarter of 2006 to

5.1% at third quarter of 2007.

• Year-to-date absorption in 2007 is 297,301 square feet. This is

roughly 200,000 square feet higher than at the same time last year.

• The sublease market accounted for only 74,028 (10.5%) square

feet of vacant space, compared to 633,606 (89.5%) square feet of direct vacant space at third quarter of 2007.

• The economic boom in Edmonton has lead to a drop in vacancy

rates and significant increases in rental rates in almost every office class.

• Vacancy decreased by 2.1% from 7.6% at third quarter of 2006 to

5.1% at third quarter of 2007.

• Year-to-date absorption in 2007 is 297,301 square feet. This is

roughly 200,000 square feet higher than at the same time last year.

• The sublease market accounted for only 74,028 (10.5%) square

feet of vacant space, compared to 633,606 (89.5%) square feet of direct vacant space at third quarter of 2007.

• The economic boom in Edmonton has lead to a drop in vacancy

rates and significant increases in rental rates in almost every office class.

Suburban Office Suburban Office Edmonton Edmonton

10.8% 9.0% 7.0% 4.3% 3.9% 5.2% 9.3% 9.5% 8.2% 10.1%

0.0% 2.0% 4.0% 6.0% 8.0% 10.0% 12.0% 2000 2001 2002 2003 2004 2005 2006 2007 YTD 2007 F 2008 F

Vacancy Rate

10 Year Average - 10.1%

Suburban Vacancy Rate (All Classes) Suburban Vacancy Rate (All Classes)

235.8 269.4 240.9 46.9 48.9 191.0 317.4 364.0 81.4 183.5

50 100 150 200 250 300 350 400

200 2001 2002 2003 2004 2005 2006 2007 YTD 2007 F 2008 F

Absorption in SF (000's)

Suburban Absorption (All Classes) Suburban Absorption (All Classes)

Suburban Lease Rate Ranges Suburban Lease Rate Ranges

$10.00 $10.00 $8.49 $8.00 $11.00 $10.00 $10.00 $23.00 $25.00 $18.00 $20.00 $20.00 $20.00 $35.00

$0 $5 $10 $15 $20 $25 $30 $35 $40 Whyte Ave. Southside Eastgate 149 Str. West End 124 Str. Kingsway R ent per Square Foot

91st Street & Ellwood Drive – 50,000 SF

Suburban Large Blocks of Contiguous Space Suburban Large Blocks of Contiguous Space – – New Developments (> 50,000 SF) New Developments (> 50,000 SF)

The Steppes – 73,250 SF Commerce South Office Park (Building D) – 74,000 SF (Building E) – 68,000 SF 51st Avenue Business Centre – 80,000 SF

Top Lease Transactions Top Lease Transactions – – Suburban Office Suburban Office

Property Name

Address Tenant Size(SF) Lease Type

Commerce South Office Park 8615 – 51 Ave Colt Engineering 74,000 New Coronation Plaza 14310 - 111 Avenue Capital Health 35,000 New YottaYotta 6020 – 104 Street YottaYotta 28,520 Renewal Coronet Building 8403 - Coronet Road Flint Energy 16,280 Expansion

Suburban Office Summary Suburban Office Summary – – 2007 YTD 2007 YTD

• Vacancy decreased by 3.6% from 7.9% at third quarter of 2006

to 4.3%% at third quater of 2007.

• Absorption in 2007 YTD is 190,950 square feet.
• At third quarter of 2007, the sublease market increased in size

to 31,278 square feet from 22,240 square feet at third quarter

• f 2006.
• Rental rates have increased dramatically in the last year from

an average of $11.54 at third quarter of 2006 to $14.47 at third quarter of 2007.

• Vacancy decreased by 3.6% from 7.9% at third quarter of 2006

to 4.3%% at third quater of 2007.

• Absorption in 2007 YTD is 190,950 square feet.
• At third quarter of 2007, the sublease market increased in size

to 31,278 square feet from 22,240 square feet at third quarter

• f 2006.
• Rental rates have increased dramatically in the last year from

an average of $11.54 at third quarter of 2006 to $14.47 at third quarter of 2007.

Industrial Industrial Edmonton Edmonton

7.5% 6.4% 5.8% 7.4% 6.6% 4.0% 1.9% 1.7% 1.7% 6.4%

0.0% 1.0% 2.0% 3.0% 4.0% 5.0% 6.0% 7.0% 8.0% 2000 2001 2002 2003 2004 2005 2006 2007 YTD 2007 F 2008 F Availability R ate 10 yr. Average = 3.9%

Industrial Availability Rate Industrial Availability Rate

3,116.6 1,863.1 1,369.8 95.1 1,211.0 4,190.0 3,633.3 4,115.7 3,412.7 529.5

500 1,000 1,500 2,000 2,500 3,000 3,500 4,000 4,500 2000 2001 2002 2003 2004 2005 2006 2007 YTD 2007 F 2008 F Absorption in SF (000's)

Industrial Absorption Graph Industrial Absorption Graph

Average Net Lease Rates Average Net Lease Rates

$8.77 $8.80 $8.90 $7.40 $5.00 $4.85 $4.60 $4.50 $4.25 $4.70

$0.00 $1.00 $2.00 $3.00 $4.00 $5.00 $6.00 $7.00 $8.00 $9.00

2000 2001 2002 2003 2004 2005 2006 2007 YTD 2007 F 2008 F

R ent per Square Foot

Top Lease Transactions Top Lease Transactions – – Industrial Industrial

Address Tenant Tenant Industry Size(SF) 12810 – 170 Street

Kuehne & Nagel Logistics

Transportation 400,000 67 Avenue & 67 Street Alberta Oil Tool Manufacturing 121,000 15423 – 131 Avenue XS Cargo Warehouse 108,000 50 Street & Whitemud SS Inc. Distribution 90,529 4108 – 84 Avenue CoLinx Distribution 66,000

Industrial Summary Industrial Summary – – 2007 YTD 2007 YTD

• The Edmonton industrial market absorbed 905,724 SF in the third quarter of

2007 causing YTD absorption to reach 3,633,324 SF.

• Average asking net lease rates have increased in the third quarter and now

sits at $8.77 PSF. The highest rents are once again in Nisku/Leduc, with the lowest rents being found in the Northeast.

• Overall availability rates have dropped significantly from 3.0% at third

quarter of 2006 to 1.9% at third quarter of 2007.

• The industrial construction in Edmonton is at record levels. 737,273 SF was

added this quarter, with another 3.2 million SF under construction. A further 3.7 million SF of industrial space is currently proposed.

• The Edmonton industrial market absorbed 905,724 SF in the third quarter of

2007 causing YTD absorption to reach 3,633,324 SF.

• Average asking net lease rates have increased in the third quarter and now

sits at $8.77 PSF. The highest rents are once again in Nisku/Leduc, with the lowest rents being found in the Northeast.

• Overall availability rates have dropped significantly from 3.0% at third

quarter of 2006 to 1.9% at third quarter of 2007.

• The industrial construction in Edmonton is at record levels. 737,273 SF was

added this quarter, with another 3.2 million SF under construction. A further 3.7 million SF of industrial space is currently proposed.

Retail Retail Edmonton Edmonton

Overall Retail Vacancy Rate Overall Retail Vacancy Rate

12.3% 8.2% 4.9% 4.1% 3.7% 3.5% 3.2% 6.1%

0% 2% 4% 6% 8% 10% 12% 14% 16% 2000 2001 2002 2003 2004 2005 2006 YTD 2007 Vacancy R ate

Edmonton Retail Trade Areas: 2Q 2007

Vacanc y 12.5% Vacanc y 2.6% Vacanc y 1.5% Vacanc y 4.4%

Vacancy 5.4%

Vacanc y 1.2%

Edmonton Market Vacancy: 3.2%

There is 7.1 million SF of retail space in this trade area, representing 25.9%

• f the total retail

space inventory. There is 2.1 million SF of retail space in this trade area, representing 7.6% of the total retail space inventory. There is 5.1 million SF of retail space in this trade area, representing 18.7%

• f the total retail

space inventory. There is 2.5 million SF of retail space in this trade area, representing 9.3% of the total retail space inventory. There is 2.4 million SF of retail space in this trade area, representing 8.8% of the total retail space inventory. There is 5.4 million SF of retail space in this trade area, representing 19.7%

• f the total retail

space inventory.

Vacanc y 3.6% Vacanc y 1.5% Vacanc y 4.1%

There is 1.2 million SF of retail space in this trade area, representing 4.3% of the total retail space inventory. There is 1.5 million SF of retail space in this trade area, representing 5.6% of the total retail space inventory.

Edmonton Retail Market

New Developments:

• Windermere: 1,200,000 SF, anchored by major supermarkets, home

renovation centres, banks.

• Riocan: 524,000 SF, anchored by Home Depot, Superstore, and Staples.
• Namao Centre South: 299,807 SF, anchored by Rona and Sobey’s.
• Hopewell: 120,000 SF, anchored by Safeway.

Rental rates:

• Edmonton power centers range between $25.00 psf and $40.00 psf.
• Regional shopping centres such as West Edmonton Mall and Kingsway

Garden Mall are seeing rates for certain transactions over $100,00 psf.

Top Lease Transactions Top Lease Transactions – – Retail Retail

Property Name Address Tenant Size (SF)

South Edmonton Common

Calgary Trail & 23 Avenue Wal-Mart 214,000 Westmount Shopping Centre

• St. Albert Trail &

111 Avenue Home Depot 91,000 Capilano Terrace Road & 50th Street Canadian Tire 75,000 Northtown Mall 137 Avenue & 97 Street T & T Food Market 50,000 South Edmonton Common Calgary Trail & 23 Avenue Ashley 41,000

Retail Summary Retail Summary – – 2007 YTD 2007 YTD

• Vacancy decreased by 0.3% from 3.5% at mid-year 2006 to 3.2% at

mid-year 2007.

• This is the lowest recorded retail vacancy rate since the survey

commenced in 1991.

• The lowest vacancy rate was in the Southwest at 1.2%
• The highest vacancy rate was in the Northwest at 12.5%
• Inventory has grown over the last year by roughly 600,000 SF and

currently sits at 27.3 million SF

• Vacancy decreased by 0.3% from 3.5% at mid-year 2006 to 3.2% at

mid-year 2007.

• This is the lowest recorded retail vacancy rate since the survey

commenced in 1991.

• The lowest vacancy rate was in the Southwest at 1.2%
• The highest vacancy rate was in the Northwest at 12.5%
• Inventory has grown over the last year by roughly 600,000 SF and

currently sits at 27.3 million SF

For more information, please contact:

Dave Young, Senior Vice President, Managing Director CB Richard Ellis Alberta Limited 1220, 10180 – 101st Street T5J 3S4 T 780 424 5475 F 780 426 1995 dave.young@cbre.com