Canmore Commercial Real Estate Market Report
The local real estate market has been very competitive since late 2016, resulting in a limited supply of availability in all sectors. Industrial space and raw land remain especially scarce which has driven prices up.
Industrial bays have been scarce since 2005. The introduction of the new industrial park at Deadman's Flats, just east of Canmore did not ease the industrial market.
Limited Retail spaces are available in Canmore's central business district along Main Street, and Railway Avenue, and side streets. There are also some retail spaces in locations such as Bow Valley Trail and in select local neighborhoods, but as with industrialand land, scarcity has increased rates.
Office space is usually more available throughout the town, downtown, Bow Valley Trail, Railway Avenue and in Elk Run area.
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 $15 to $18 depending on calibre off premises and location. Second level industrial $8 to $12 depending on finish
- Offices have the broadest ranges at$14.00 to $16.00/sf for older, walk-up style ofices up to $22.00/sf for modern properties
- Main Street retail $35.00 to $45.00
- Secondary retail downtown and Bow Valley Trail $25 to $32
The above noted rates will vary by property depending on amenities and location.
Sales prices for commercial properties have been at capitalized rates of between 6% nd 7%, and lower for owner occupied properties. 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 lands have been sold at $1.4 million per acre, and downtown main street lots of 6000 sf lots have sold for $1.2 million, down from the $1.5M at the peak of the market.
Canmore's commercial market typically lags about a year or more behind that of Calgary and is difficult to track any true tends because it is such a small and reactionary market.
This report is intended as an overview of the Canmore Commercial real estate market. Every property and each transaction is unique. Please contact our office to discuss your particular requirements.