A strong social district equals a strong business district
It’s time to rethink the perception of Edmonton’s downtown as strictly being a central business district and shift the narrative towards a more harmonized central social district.
A survey commissioned by the Edmonton Downtown Business Association notes that “60% of respondents said that seeing/socializing/collaborating with co-workers is the biggest draw to returning to the office.” It also revealed that downtown employees have a desire for heightened social features in the area in which they work.
2022 Office Q1: Topic
It’s time to rethink the perception of Edmonton’s downtown as strictly a central business district and shift the narrative towards a more harmonized central social district.
A survey commissioned by the Edmonton Downtown Business Association notes that “60% of respondents said that seeing/socializing/collaborating with co-workers is the biggest draw to returning to the office.” It also revealed that downtown employees have a desire for heightened social features in the area in which they work.
+ The survey results identified the top areas to focus on that would increase the likelihood of workers choosing to work downtown:
+ The survey results identified the top areas to focus on that would increase the likelihood of employees choosing to work downtown:
63%
Outdoor gathering spaces such as patios
50%
Late afternoon or early evening gatherings
Downtown Edmonton will always be a major hub for business
Downtown Edmonton will continue to be a major hub for business, with high-quality buildings and strong economic incentives, the downtown core is an attractive choice for many tenants. However, the essence of a city’s downtown should go beyond high-rise towers and workplaces; it is a place to gather, shop, be entertained, celebrate, and live. Downtown cores reflect a city’s image, pride, and prosperity; they are ever-changing and should aim to develop values in synchronicity with each other. A healthy downtown should delight and thrill the individuals who occupy it which in turn draws in residents, visitors, businesses, and investments.
Talented professionals want to live in a city where there’s social fulfillment and a successful business will go where the talent wants to be. A central social district strategy focuses on the attraction of people who will breathe new life into the important social aspects of Edmonton's downtown and, in doing so, increase activity at ground level and occupancy of the high-rises above.
Activity in Edmonton is rising, and we see increasing demand for a downtown environment that will meet all the standards people expect from a vibrant urban community. The emergence of mixed-use developments in Edmonton’s downtown has the potential to fulfill these demands while creating one of the most engaging social hubs in our otherwise highly sprawled city.
Edmonton’s ICE District understands the need and benefit of a central social district. The anticipated Connect Centre will offer a unique retail and entertainment space, a market-style grocery store, restaurants and bars. Along with Qualico Properties, who recently announced the second phase of Station Lands, a 1.2-billion-dollar multi-use development located just off 104 Avenue that is scheduled to be completed in 2024. These two developments will aid in the harmonization of our downtown and the attraction of talented professionals to Edmonton.
A harmonized downtown core does not see its lights shut off at 5:00 PM. People will be able to have a sense of social fulfillment by enjoying Edmonton’s downtown with places to eat, drink, be entertained, and gather. There is an energy created for people that live and work in city centres, energy that manifests into longer working hours and resulting increases in productivity.
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Edmonton continues to lead the 'return to office' in North America
As of the week of April 4th, Edmonton has the highest return of downtown foot traffic of all 23 cities we track in North America – including six cities in Canada. Since March 8, 2022, when all Provincial and Municipal restrictions were officially lifted, Edmonton’s downtown core has experienced a 25% increase in foot traffic from the weeks prior. The week of April 4, 2022, Edmonton achieved its highest volume of activity downtown since the week of March 9, 2020. Although it is important to clarify that we remain below pre-pandemic levels thus far in 2022, it is promising to see the increase in activity downtown. As numerous private businesses target a return to their offices through spring and summer, the activity in the downtown core will continue to increase.
Building the attraction to Downtown
Edmonton Office Market Statistics
16.0%
Overall vacancy rate
17.2%
Overall Downtown vacancy rate
14.4%
Suburban vacancy rate
About the Market
The Edmonton office market experienced a stable first quarter of 2022 with a City-wide vacancy decrease of 0.3%.
With positive leasing activity in the Financial districts class B & C buildings, and a net-zero absorption in class-AAA buildings; the Financial districts total absorption of negative 89,518 square feet is solely attributed to the class-A product. As employers look to class-AAA buildings for their upgraded locations, quality and amenities, and class B & C for its lower rents; Edmonton’s class-A product returned 93,927 square feet to the market. With an abundance of space in the class-A asset class becoming available through Q1, Edmonton’s 25 class-A buildings will need to find a way to differentiate their product and improve the quality of their assets. Several are opting to upgrade their common areas, adding amenities and constructing show suites.
Increased leasing activity in the Government District resulted in vacancy in classes A and B decreasing by 1.2% and 2.8%, respectively. The 31,338 square feet of positive absorption in the Government class-A product is mainly attributed to leasing in the One Twelve Business Centre (formerly Stantec Centre). While the 45,101 square feet of positive absorption in the Government class-B product was driven primarily by leasing in Baker Centre. All of which resulted in decrease of 1.7% in the Government districts vacancy rate.
The suburban market also experienced positive activity through the first quarter of 2022 with a total positive absorption of 86,414 square feet driven by the South Side, Summerside and West End markets. West End suburban market had a total of 26,008 square feet of positive absorption, with 18,000 square feet of leasing in the Ford Credit building. Nearly all the Summerside district’s activity came from 30,000 square feet of leasing activity in the Magna Engineering Building causing vacancies to decrease by 2.4%. Southside experienced the highest amount of activity with 39,073 square feet of leasing, 18,000 of which came in Packers Plus Building and around 29,000 square foot reduction in vacant space coming from Commerce South Office Park Building B.
The first quarter of 2022 was predictably stable. The balance of 2022 will start to see increased leasing activity, in part due to the Provincial and Municipal governments lifting COVID-19 restrictions which will continue to bring more people back to the office.
Cory Wosnack Principal & Managing Director cory.wosnack@avisonyoung.com +1 780.429.7556
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