2010 Local Market Report

Commercial real estate market in the Bow Valley (Banff, Canmore and Exshaw) experienced strong and steady increases for over a decade prior to the worldwide economic downturn that hit in late 2008.  Since the fall of 2008, the volume of sales and leasing slowed considerably and prices have fallen twelve to fifteeen percent from the 2007 peak.

There is an available supply of office and retail spaces downtown, throughout the town. Industrial bays remain scarce in Canmore, Exshaw and Banff.  

Availability: The newer commercial building vacancies are being absorbed better than the more dated properties.   There have been no new industrial buildings built since 2004.  Retail space can be found in Canmore's central business district along Main Street, and Railway Avenue , and their off shoots.  There is also newer space in locations, such as Bow Valley Trail and in select local neighborhoods.  

Office space is typically available throughout the town, downtown, Bow Valley Trail, Railway Avenue and in Elk Run.

Industrial bays have been scarce since 2005 when the last industrial project came on to the market.

Land is scarece, however  there are still a few development opportunities available. 

Rates: Lease rates in all sectors have recently decreased modestly from the peak in 2007.  A unique phenomenon in Canmore is that the rental market may respond to scarcity with large rate increases because many local tenants are very small businesses that are unable to take on significant amounts of new work and thus have limited growth potential.

Average net lease rates per square foot per annum as follows:

• Industrial bays  $10 to $18 Second level industrial $8 to $10
• Offices $12.00 to $20.00
• Main Street retail $25.00 to $35.00
• Secondary retail downtown and Bow Valley Trail  $18 to $26

The above noted rates will vary by property depending on amenities and location.

Sales prices for commercial properties have been at capitalized rates of about 7.5%.  The purchase market is driven by owner-occupant buyers who are prepared to pay significantly more for a space than they could rent it for over a ten -year period as they have the down payment, prefer mortgage payments over rent and have confidence that the market will continue to grow. 

Very few major building sales are seen in this region. Property owners have been reluctant to sell, so major sales have been scarce. Developers and investors may recognize that the town has grown in size and sophistication and see the potential of our commercial property, but lenders are far more conservative in this new economy resulting in a the reduced prices.

Canmore has a limited supply of land.  Bow Valley Trail land has sold at $1.2 million per acre in the past year as compared to $1.6 per acre a few years ago.  Downtown main street lots of 6000 s.f. lots have sold for $1.2  million.

This report is intended as an overview of the Canmore Commercial real estate market. Every property and every transaction is unique. Please contact our office to discuss your particular requirements.