Calgary has The Bow, Encana's imposing new headquarters. At 59 storeys, it's the tallest skyscraper in Western Canada.
Vancouver is abuzz over Telus Corp.'s $750-million scheme to build a new 22-storey downtown headquarters and adjacent 44storey condo tower.
Yes, Edmonton has its own marquee downtown office project -Qualico Developments' spiffy new 28-storey Epcor Tower.
But Edmonton isn't Calgary or Vancouver. The head-office sector here is small and demand for new office space is often anemic.
On the flip side, Edmonton really flexes its muscles in other areas, notably the industrial real estate market. And it's big.
At roughly seven times the scale of the city's downtown office market, Edmonton's industrial real estate commands the highest average rental rates in Canada, and some of the highest in North America.
Now, after experiencing a sluggish couple of years in the wake of the global recession, Edmonton's industrial market is again powering ahead, driven by a big rebound in Alberta's oilsands.
"We make stuff here. Our industrial (real estate) guys call them the tin bangers. We're the guys that produce the products that are engineered somewhere else, and I really believe we should be proud of it," says Dave Young, senior vice-president at CB Richard Ellis.
"Edmonton is the industrial heartland, and although our office market is extremely important to the health and the vibrancy of the city, the driver here is industrial. As industrial goes, so goes Edmonton."
With oil prices well north of $100 US a barrel and a raft of major projects underway, metal fabricators and other suppliers are ramping up once again. That's creating demand for more industrial space, from Nisku to Acheson, and from the industrial parks of southeast Edmonton to the growing distribution hub on the city's northwest side.
"We had a little over one million square feet of (industrial space) absorption in the first quarter, the highest in Canada. That was up from about 800,000 square feet in the fourth quarter of 2010," says Young.
By contrast, during the first three quarters of 2010, the local industrial market was virtually dead as the vacancy rate ticked up.
"In Calgary the market is driven by (office space in the) downtown core.
As that market goes up or down, the city goes up or down with it. Here in Edmonton, it's the industrial side that drives things," he says.
So while there may be fewer gleaming office towers in the city core, there's a growing roar of activity in warehouses and industrial parks all over the Capital Region.
The inventory of vacant industrial space is shrinking fast. At 5.1 per cent, it has fallen about 150 basis points (or 1.5 per cent) over the past year, and new supply is getting tougher to find.
Although some 1.2 million square feet of new industrial space is currently under construction, mainly on the city's northwest side, no new supply hit the market in the first quarter.
But the pace of industrial development is expected to pick up as big institutional investors move into the market and developers gear up for the next growth cycle.
"Last (summer) there wasn't a lot going on, and in our view that was the bottom of the regional market on the commercial and industrial side," says Vince Lachance, of SCR Commercial Realty.
"But by November-December we started to see a real uptick and that has continued. So there's a real solid level of activity now."
The majority win by Stephen Harper's Conservatives in Monday's federal election has also helped to reinforce the view that Alberta's oilsands are heading into a new, long-term growth phase.
"I had a call last week from a large investor out of Toronto and they were specifically looking for industrial properties of between 10 and 50 acres -preferably serviced, so there could be activity there within the next two to three years," says Lachance.
"They already have interests here, but they want to add to it. So as we see the upgraders develop as well as more secondary, value-added manufacturing, those are the (tenants) that will require the two-or four-acre sites and the 20,000-square-foot warehouses. So it's looking pretty solid in our view, and there isn't a lot of property out there at this point. It's a pretty tight market."
John Marotta, senior vice-president, western region at Bentall Kennedy (Canada), is also upbeat on Edmonton. His firm spent $160 million to acquire two downtown office towers last year, bolstering its existing local portfolio of industrial holdings.
"We feel it's an attractive market, especially with the oilsands activity in Fort McMurray. So as the oilsands continue to evolve and more projects are approved and underway, there will be positive spinoffs for the industrial market in Edmonton." glamphier@edmontonjournal.com
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