Almost one-quarter of Edmonton's downtown office real estate is empty, according to a report on Canadian Office Figures released Tuesday by CBRE Ltd.
The report following Q2 finds Edmonton's office vacancy rate in the core stands at 24.1 per cent. That figure is about six per cent higher than it was three years ago near the beginning of the COVID-19 pandemic.
Edmonton has the third highest downtown office vacancy rate in Canada. Only London, Ont. (27.7 per cent) and Calgary (31.1 per cent) are higher. The national average is 18.1 per cent. Larger cities Toronto and Vancouver have downtown vacancy rates of 15.8 per cent and 11.5 per cent, respectively.
The rising downtown rate is a concern for Edmonton's Downtown Business Association as one likely result of the climbing figures would be a rise in property taxes.
“When you don’t have your downtown contributing such an outsized share of the property tax base anymore, it's businesses outside of the core that have to pick up that bill and it's residents all over the city that have to pick up that bill," Puneeta McBryan, executive director of the business association, said on Wednesday.
Mark Anderson, a vice-president for the CBRE's Edmonton office, said office projects finished several years ago that added 1.7-million square feet of office space to the city's downtown is new supply that "was never really dealt with."
The influx of newer office space has also led to a spike in vacancy rates in older buildings, said McBryan.
"You have 60-plus per cent vacant older office buildings and then much lower vacancy in much newer more attractive office buildings," she said.
The importance of maintaining and boosting downtown vacancy rates is something that's vital to the economic well-being of the city, Mayor Amarjeet Sohi said on Wednesday at City Hall.
"A thriving downtown is so critical for social well-being, for vibrancy but also for economic well-being of our city," he said. "Our downtown generates so much revenue for the program services that we need to continue to provide."
Sohi said the city is looking at ways to retain and attract businesses downtown through grants and to encourage the conversion of existing office space into residential units.
Downtown taxpayers generate close to 11 per cent of Edmonton's tax base, "a significant base that we need to maintain and grow," he said.
with files from CTV News Edmonton's Marek Tkach
