Office Market Report / First Quarter 2021

Edmonton, AB

Evolution of the core

One of the keys to any great city is having areas that allow people to congregate, interact with local businesses and experience the history and culture of the area. These areas are typically found in the form of a main street, located nearby the economic centre of the city. For Edmonton, many would immediately think of our downtown core and ICE District as it has various local businesses, amenities and social areas. However, in recent years Whyte Avenue and the greater Old Strathcona area, located on the south side of the North Saskatchewan River, has seen an evolution in the form of exciting development projects, influx of new local businesses, and a strong cultural identity on full display. For those reasons, we should extend what we consider our “main street” to encapsulate both downtown Edmonton and the Old Strathcona area.

+ Click on the map below to see new development details

But what is it that makes the Old Strathcona area unique and what kind of opportunities exist there?

Here are some quick-facts you may not know about the area:

  • There are more than 12 notable development projects which aim to enhance the area, ranging from increasing housing options, enhancing accessibility to the area and attracting new business
  • It is a recognized Business Improvement Area, which provides businesses with ongoing support to achieve broader goals that benefit the entire business community
  • It is also the only designated Provincial Historic Area in the city, and one of two in the Province
  • Strong ties to the arts and theatre community (home to the Fringe Theatre, Varscona Theatre, Arts Barns, Grindstone and more)
  • Since January 2021, seven new businesses have opened: Palette Café, Pansy Poke Collective, Indian Fusion Curry House, Roasti Coffee Co, Pedego Electric Bikes, Anonymous Hair, Leopold’s Tavern – with many more on the way
  • Nearly 30 new businesses opened last year, amid the pandemic
  • Highly walkable area with tons to explore from art & food, music & entertainment, and a full range of professional and medical services

@81

10145 81 Avenue

This brand-new mixed-use project, developed by Beljan, is located at the corner of 81st Avenue & 102nd Street, just off Whyte Avenue. The existing main floor retail has been fully renovated and an additional three floors have been constructed consisting of high-end, residential rental apartments. Having just been completed, the retail portion is already the new home of Mr.Derk, a local clothing store, and soon it will also be home to Pablo Cheese Tart. @81 will help bolster the population density in the area with its modern aesthetic and selection of main floor retailers. Currently, there is 6,500 sf of retail space available for lease on the main level.

Strathcona Backstreet

104 Street to Gateway Boulevard

Named the Strathcona Back Street project, the City of Edmonton is renewing the alley north of Whyte Avenue from Gateway Boulevard to 104th Street. The renewal work will include new cobblestone walkways, LED lighting upgrades, the potential for additional green space, creative/artistic elements, and general gathering spaces. With several commercial units and a residential apartment building with main entrances facing the alley, this project aims to create a destination that is safe, welcoming, and further connects the community and businesses. This unique “back street” concept will be another substantial piece in the activation of the area.

Prairie Sky

Whyte Avenue

This urban gondola project will connect downtown with Whyte Avenue and the Greater Old Strathcona area by having a three-kilometre line that crosses over the North Saskatchewan River. It will include five stations and be privately funded by Prairie Sky. While the gondola will certainly become a tourist attraction, it will also be a functional, alternative mode of transport for more daily use cases. Prairie Sky is another important project because it will increase accessibility to Whyte Avenue and potentially spur on population density for those that may not want to live directly in the downtown core but still want to be nearby. The project is currently in the approval stages, with their second phase being approved by the City in February.

'The Old Strathcona area has undergone an evolution in the past several years, shifting from a place people visited for a couple hours to enjoy an evening or shop, to a destination that is able to provide an all-day experience to live, work, and play in. By developing projects like the Strathcona Backstreet and @81, which enhance commercial offerings and support density growth, Old Strathcona is transforming into a vibrant, modern main street with endless opportunities to show off the best of what Edmonton has to offer.'


Nathan Raju Beljan Development

Density & Vision

The Whyte Avenue and greater Old Strathcona area has traditionally been a place people went to enjoy an evening with friends, do some shopping for a couple hours, or work during the day and leave afterwards. In recent years, it has become more than just an evening destination, but rather a place to live, work, and play in. One of the ingredients that had been missing was density. Without a selection of modern accommodations, it was hard to cultivate a permanent community that would be active in the area at all times of the day. Now, the area has several projects, such as Southpark on Whyte and Raymond Block, which are providing that supply.

However, density was not the only piece that has transformed the area. The other half was having the right vision for the area and the right people to bring that vision to life. For this you have groups like Beljan Development, who currently has several projects underway and are aiming to create full-on destinations while remaining faithful to the historic nature of the area. On the community side, there is the Old Strathcona Business Association which fosters community growth and engagement by providing local business support in various forms, including assistance with area beautification as well as education opportunities and special grant programs. These are just some of the many active groups who are working to elevate the Whyte Avenue and greater Old Strathcona area into something truly unique.

‘Downtown Edmonton isn’t just downtown now. Our core spans both sides of the river. A direct and experiential connection crossing the river to significant nodes is essential to building a more robust economy in our new urban centre.’


Jeffrey Hansen-Carlson MBA Director of Business Development

Local business in Edmonton

One of the hardest hit groups during 2020 was local business.

It was, and continues to be, a difficult economic environment to grow in. Some studies suggest that one aspect of a healthy economy is having strong ties to local business and having consistent community engagement. To that end, the old Strathcona area is a shining example of what community recovery can look like. So, keep your eyes on the area as it is gearing up to rival all the other notable main streets in Canada.

Edmonton Office Market Statistics

16.3%

Overall vacancy rate

16.8%

Downtown vacancy rate

15.7%

Suburban vacancy rate

About the Market

The Edmonton office market had a relatively positive first quarter of 2021, with the overall vacancy rate trending downwards since last quarter. Vacancy in the Financial District slightly decreased quarter-over-quarter with a steady stream of activity. Conversely, the Government District saw a slight increase in vacancy as primarily class C assets became available. While several suburban districts had modest activity, the most notable was Eastgate, with the Edmonton Catholic Schools acquiring the 160k sf 50th Street Atria for their office headquarters. That transaction alone will have a net positive absorption of approximately 120,000 square feet and is the main factor in edging overall market absorption into the positive. Moving forward, we expect office market activity to continue along a positive path at a gradual pace with COVID-19 vaccine rollouts becoming more widespread and return-to-office initiatives taking place.

Credits

Scona Garage, Beljan Development

The Baron, Wexford Developments LP

Station Park, Beljan Development

The Mezzo, WestOak Developments

South Scona Parking Lot, City of Edmonton

Army & Navy Development, Edgar Developments

Strathcona Back Street, City of Edmonton

@81, Beljan Development

The Strathcona, Beljan Development

Crawford Block, Beljan Development

Prairie Sky Gondola, Prairie Sky Gondola Inc

Old Strathcona Business Association

Cory Wosnack Principal & Managing Director cory.wosnack@avisonyoung.com +1 780.429.7556

Jason Gardner Vice President jason.gardner@avisonyoung.com +1 780.429.7569

Crystal Cadieux Administrative Coordinator crystal.cadieux@avisonyoung.com +1 780.429.7572

Mark Hartum Principal mark.hartum@avisonyoung.com +1 780.429.7557

Hillary Williams Associate hillary.williams@avisonyoung.com +1 780.429.7564

Spencer Schulze Research Manager spencer.schulze@avisonyoung.com +1 780.429.7555

Peter Schwann Principal peter.schwann@avisonyoung.com +1 780.429.7563

Tori Sara Administrative Coordinator tori.sara@avisonyoung.com +1 780.429.7561

Charlotte Phillips Senior Marketing Manager charlotte.phillips@avisonyoung.com +1 780.429.7574

Karnie Vertz Principal karnie.vertz@avisonyoung.com +1 780.429.7551

Cailey Martiniuk Client Services Coordinator cailey.martiniuk@avisonyoung.com +1 780.429.7553

Cori Vertz Marketing/Graphic Designer cori.vertz@avisonyoung.com +1 587.882.9756