By Reiss, Dawn
Journal of Property Management , Vol. 75, No. 2
IT'S CALLED CANADA'S ROCKY MOUNTAIN PLAYGROUND FOR A REASON. Home to Calgary and Edmonton, the western province of Alberta offers a variety of tactile resources and outdoor adventures. As the world's second largest exporter of natural gas and the fourth largest producer, Alberta is highly dependent on prices for oil and gas, which dramatically affects its economy. The area hasn't been immune to the recession that has hit most of the world, but Canada's most prosperous province has survived better than most. While Canada's overall unemployment rate is 8.5 percent as of January, Alberta is at 6.7 percent, a decline from a 7.4 percentage a month earlier.
Due to social housing programs in Canada, which allow rental housing to be owned and managed by the state or not-for-profit organizations (or a combination of the two), foreclosure rates in Alberta have been lower and less public for those who paid prime rates in 2007, and the impact has been less dramatic than in the United States. However, the commercial real estate market--where property managers in Alberta have traditionally done well--has experienced higher vacancies in office buildings in the past year, as corporations consolidate, said Saadat Keshavjee, CPM[R], CMOC, managing director of Amhurst Property Management, LTD.
Office rents in Alberta are now down as much as 30 percent, and industrial and residential property rents have dropped by 20 to 30 percent, Keshavjee said. Although Alberta went through a market boom in 2007, as the oil industry skyrocketed, property prices have rolled back to pre-2006 levels, especially in the commercial real estate industry.
"A property manager has to be resilient in this market," Keshavjee said. "He or she has to more progressively analyze rents for clients and adjust quickly to avoid losing a tenant."
Despite higher vacancies in commercial buildings, Keshavjee said Alberta does offer great opportunities in other areas. He said there is a dire shortage of property managers in the condominium, multifamily, and to some extent, the mixed-use property industries. And these areas are starting to grow again. According to thatscalgary.com more than 20,000 multifamily residential units are now in construction, approved, or are currently pending in Calgary, the largest city in Alberta and the fifth largest city in all of Canada. Overall total starts in new construction are projected to hit 22,000 this year, up from 17,950 in 2009, but down from the 29,164 in 2008, according to Canada Mortgage and Housing Corporation. This new growth mirrors a steady population rise in the city in the past five years, from 988,193 in 2006 to 1.1 million people.
"Calgary's residential [real estate market] is more active than its commercial [market] and condos have been extremely hot," said Marlene Swinton of Real Estate Professional Inc. …