While we saw quarter over quarter decreases throughout 2020, the drop in Saskatoon’s industrial vacancy for the last three months has exceeded my prediction for the entire current year.
The industrial sector has seen a net absorption of almost 150,000 square feet (SF).
In January, I forecasted we would be at 4.8 per cent by year end.
Our recently released Industrial Market Report recorded that rate had already dropped to 4.71 per cent. That represents over a 60-basis points reduction within one quarter.
My review of the market stats would indicate that is the largest quarterly drop we have seen in over 10 years.
Cities are becoming increasingly aware of the need to densify.
The infrastructure costs of suburban sprawl are not recoverable.
No one is prepared to pay the real costs that are imposed upon most city services because of continued expansion of suburbia.
I promised you that I’d hold myself accountable in my Jan 2020 post and report back to you.
So, how did I do? At that time, I predicted a decline in the overall Saskatoon industrial vacancy rate from 5.65 per cent per cent in 2019 to 4.8 per cent.
That’s after a significant 2 per cent decline in 2018 and a 0.9 per cent decline to 6.8 per cent in 2019.
The past year has been a roller coaster for the commercial real estate industry.
Just when it looked like were gaining traction it seemed the world had another thing in store for us.
But I’m hopeful for 2021 and therefore I choose to focus on what’s in store for us.
This may sound counterintuitive as we navigate the economic impact of a pandemic.
But I’ve recently reported that our Saskatoon industrial vacancy rate actually dropped in 3Q20 demonstrating the economic resilience of this asset class.
Two industrial properties I recently brought to the market sold within one week.
Price slashing. Mark downs. Lower prices. Discounted goods.
The word discount conjures up a variety of value for many consumers.
Discount is a deduction from the usual cost of something.
The irony of that rationale is by who’s standard is the cost of something?
In spite of the negative economic impact of COVID-19, the sale and lease activity within our existing industrial market continues.
The vacancy rate has risen marginally by 0.12 per cent to 5.86 per cent, according to our recent Q2 market report.
I’ve not been shy about my love affair with the traditional interior mall as a retail institution.
While skeptics have been predicting their inevitable death, the interior mall seems to innovate and survive in spite of its critics.
But could the disruption of the Covid-19 pandemic finally have done them in?
Reporting to you live from Saskatchewan, stay tuned for more economic spinoff from the Covid-19 pandemic!
And by spinoff, I mean spinning off the tracks or wheels or whatever analogy you’d like to lend.
The Saskatchewan government delivered their budget three months late mid-June, with a big fat $2.4 billion deficit ribbon on top.
It’s a gift no one wanted, and we can’t return to sender.
The sudden, real impact of COVID-19 can be seen in supply
chain disruptions, lower consumer confidence and reduced consumer spending.
Trying to measure the macro picture, the scope and duration
of the economic stoppage is not easy.
For those corporations who are currently sitting on surplus capital, waiting for the bargains to surface, it is still too early to assess how property values will be affected.
It is however, becoming clear which sector will emerge as
strongest asset class.