By Ben Tatterton, Manager, Data Solutions & Erika Siegert, Senior Analyst, National Research Insights | March 11, 2021

Annual results for the Edmonton commercial real estate market reflected challenges faced during an unprecedented year. A total of 384 transactions were recorded in 2020, reaching $2.2 billion in investment volume, a 32% decrease compared to 2019. Almost all asset classes experienced a drop in transaction volume year-over-year, in part due to the provincial economic downturn paired with pandemic-related closures and restrictions limiting activity. In the final quarter of the year, the market recorded 111 transactions, totaling $558 million, dropping 68% year-over-year, but marking a 59% increase from the previous quarter. However, this fourth quarter uptick was not enough to prevent the market from recording a third consecutive year of annual declines in commercial sales totals.

Edmonton property transactions all sectors by year - Q4 2020

The asset classes that saw the largest annual declines were the industrial, retail, and office sectors. Compared to the previous year, the industrial sector declined 44%, with $473 million in total transactions, and the retail sector declined 51%, with $329 million. With $190 million in total transactions, the office sector marked the largest decline, dropping 69% from 2019. Meanwhile, activity for residential and ICI land dropped 15% and 42%, respectively. The lone exception was the apartment sector which saw 46 transactions, representing $684 million in value, amounting to a 68% increase from the previous year. The rebound in activity for multi-family reflects a broader trend of demand for this asset class across the country.

According to Altus Group’s Investment Trends Survey for Q4 2020, while Edmonton still sits on the negative side of the buy/sell momentum ratio, it is showing an upward directional trend towards the buy side. With Toronto and Vancouver remaining as the top two markets preferred by investors in 2020, Edmonton is one of the lowest preferred alongside Calgary and Halifax. Overall cap rates in Edmonton have seen a slight uptick, with rates for Downtown Class AA Office and Suburban Multi-Unit Residential rising, Tier I Regional Malls compressing, and Single-Tenant Industrial remaining the same quarter-over-quarter.

Edmonton overall capitalization rates - Q4 2020

Notable Edmonton investment transactions during Q4 2020:

Canadian Western Bank Place, Downtown – Office
This was the largest office sale in Edmonton since the Stantec Tower traded in Q4 of 2019. Canadian Western Bank Place is a 30-storey, class A office tower located at 10303 Jasper Avenue & 10032 103rd Street NW. The property was sold alongside an adjacent parkade for a combined price of $96,400,000. Approximately 92% occupied at the time of sale, the property was acquired by Redstone Group, a private investor based out of Vancouver.

The Silhouette at Carlton, Carlton – Apartment
The Silhouette at Carlton is a four-storey multi-family condominium building containing 119 units. The acquisition price was $27,925,400, representing a price per unit of $234,667. The property traded between local private buyers.

5402 Discovery Way, Leduc – Retail
Canadian Tire Properties acquired their own retail location at the Leduc Common retail power centre from CREIT. The price was $40,560,000, and the property contains an estimated 110,500 square feet.

Dream Centre Tamarack, Tamarack – Retail
Dream Centre Tamarack is a six-building retail centre located at 3735 17th Street NW, anchored by a Sport Check and Michael’s. It was sold by the developer DREAM to Lansdowne Equity Ventures, a private investment group out of Calgary for $37,000,000.

 Edmonton property transactions by asset class 2019 vs 2020

Aside from the multi-family market, the pandemic heavily impacted transaction volume across Edmonton commercial real estate. With the added pressure of provincial economic challenges, the market is waiting for the rollout of a vaccine for potential improvements to be seen. Still, the ultimate impact of potential relief efforts remains unknown. While Edmonton has not attracted as much institutional capital as other Canadian markets, the abundance of private buyers still indicate demand.

 

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ABOUT DATA SOLUTIONS

Data Solutions connects the Canadian real estate industry through the delivery of data with unparalleled breadth, integrity and relevance.  We cover new homes, investment transactions and commercial market inventory in key markets, and also provide intelligence on the national housing market and consumer home buying and borrowing patterns.

Our solutions are used by real estate industry stakeholders to gain market intelligence, identify and validate opportunities, benchmark, strategically plan, manage risk and more.

Data Solutions is part of Altus Analytics, the software and data solutions business of Altus Group, where our focus is to empower real estate clients and partners to work collaboratively to enhance decision making, drive performance and optimize transactional efficiency. Our solutions enable firms to better organize and manage data and connect with the right information and analytics to help them gain a complete picture of real estate assets, portfolios and transactions.

For more information on Data Solutions, please visit www.altusgroup.com/data.

 

ABOUT ALTUS GROUP LIMITED

Altus Group Limited is a leading provider of independent advisory services, software and data solutions to the global commercial real estate industry. Our businesses, Altus Analytics and Altus Expert Services, reflect decades of experience, a range of expertise, and technology-enabled capabilities. Our solutions empower clients to analyze, gain insight and recognize value on their real estate investments. Headquartered in Canada, we have approximately 2,200 employees around the world, with operations in North America, Europe and Asia Pacific. Our clients include some of the world’s largest real estate industry participants across a variety of sectors.  Altus Group pays a quarterly dividend of $0.15 per share and our shares are traded on the TSX under the symbol AIF.

For more information on Altus Group, please visit: www.altusgroup.com.

 

MEDIA CONTACT:

Elizabeth Lambe
Manager, Communications
Altus Group
(416) 641 – 9787
elizabeth.lambe@altusgroup.com

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