While Calgary’s commercial rates might be more affordable this year due to the lower assessed value of the downtown area’s office buildings, this might not lead to a noticeable improvement in the city’s significant 26.4% vacancy rate.
This is because the market’s office building values, which fell 32% as of 2019 per the latest assessment, might lead to even higher business taxes – a troublesome proposition among ventures already dealing with higher operating costs due to minimum wage increases and other labour law changes.
“We’ve seen the vibrancy stripped from the downtown core due to the rising vacancy rates because of the downturn and now we risk losing businesses outside of the core that are being weighed down by these unsustainable tax increases and other regulatory burdens,” Mark Cooper of the Calgary Chamber of Commerce told BNN Bloomberg.
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Also, while lower commercial rates might indeed prove attractive to additional tenants, Calgary still has to recover from the major body blows inflicted by the oil price crashes, especially in terms of replacing the thousands of petroleum industry workers who got laid off in the interim.
“The disease is unemployment, it’s not property values,” CBRE Alberta managing director Greg Kwong explained. “It’s not going to change dramatically until we get people back to work.”