While Western Canada experienced limited leasing activity through 2017, 2018 appears to be a more prosperous year with nearly all municipalities reporting a decline in the vacancy rate. In late 2017, market indicators suggested that 2018 would improve for AA and B class office buildings and this has come to fruition by the second quarter of 2018. There is still a significant journey before the office market stabilizes.
- Saskatoon’s vacancy fell to 14.3 percent by the end of 2017, but with several reductions in occupied space, the vacancy rate rose in the second quarter of 2018 to 15.1 percent.
- Saskatoon will likely observe a flight to quality over the coming years, applying additional pressure to older B and C Class properties to reinvest or reduce rates to remain competitive.
- Suburban office space continues to fare the transition in the commodities market slightly better than the CBD, but outdated buildings in areas with fewer amenities have struggled to attract or retain tenants.
