Commercial Property Cycles and Sub-market Emergence in Selected Canadian Cities

The research examines office property markets cycles in four Canadian cities - Calgary, Edmonton, Vancouver and Toronto. Each of the four cities has a different economic base and, as a result, have potentially significantly different commercial property development and investment cycles. The analysis examines cycles in annual office building construction in each market on a building by building basis over the past 100 years. The analysis of investment cycles is based on office building sales transactions and quarterly market rent data over the past 20 to 25 years. The four cities are shown to be rarely in the same phase of a development/investment cycle. There are significant differences in the primary office and industrial user groups that shape these markets and affect market cycles. The same major investment firms, pension funds and REITs, seek large office and industrial properties in all four cities as each progress through a complete development and investment cycle. However, each market also has a significant component of regional and local investors. The role of property market cycles in the emergence and changes in office sub-markets is also examined.