More offices empty downtown
Overall vacancy rate decreasing as suburban leasing continues to rise
By CHRIS LAMBIE Business Editor
Fri, Sep 24 - 4:53 AM
Bob Mussett
Although Halifax’s office vacancy rate fell to 8.7 per cent this month and is below the national average, the vacancy rate continues to grow in the downtown area.(Eric Wynne / Staff)
The office vacancy rate is going up in downtown Halifax and down in the surrounding suburbs, says the world’s largest commercial real estate services firm.
Halifax’s overall office vacancy rate fell to 8.7 per cent this month from 10.2 per cent at the end of the third quarter of 2009. But right now, the suburban office vacancy rate is 7.5 per cent, compared with 12.6 per cent at this time last year. The downtown rate is 10.3 per cent, up from 6.9 per cent last year.
"There’s been a significant amount of leasing activity in the suburban market and negative leasing activity downtown," said Bob Mussett, senior vice-president with CB Richard Ellis Ltd. in Halifax.
The trend "certainly started last year where we saw some shrinkage and we saw the significant amount of activity in the suburban area and it seems to be continuing," Mussett said.
He blamed demographics for the business shift.
"More people live outside of the city centre than on the peninsula."
There is a "growing diversity of product choices" in the suburban market, he said. Business parks in Bayers Lake, Dartmouth, Bedford and Burnside have all been popular picks for companies over the past year, Mussett said.
"There is no new construction downtown, so the product offering here has been the same for the last 20 years, basically."
Mussett said he would rather see more balance in the market.
"Halifax, when you take a snapshot of the overall office market, continues to perform well when compared nationally."
The national office space vacancy rate is 9.8 per cent.
"When you dig down, we’re seeing this shift happen locally," Mussett said. "To have that imbalance between the suburban market and the urban core, I don’t think it’s a healthy thing. And I think it will cause more issues going forward if it continues downtown.
"The valuation of properties will decrease, the tax base will decline. We already know there are a lot fewer people living down here. Will it accelerate or stall residential projects because more offices are locating outside the downtown core?"
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