Edmonton’s industrial real estate absorption streak ended after three years during the second quarter, but just barely, says an Avison Young report

For the first time in 15 quarters, more space was vacated than leased as a modest 25,000 square feet came back to the market.

Edmonton itself posted 123,000 sf of negative absorption, but surrounding nodes offset the decline by recording 98,000 sf of positive absorption.

Within Edmonton, most of the negative absorption (95,000 sf) occurred in the South/Southeast node, followed by Central Edmonton (25,000 sf.)

The overall vacancy rate remained unchanged quarter-over-quarter at 4.4%. Edmonton saw a marginal 10-basis-point drop in vacancy, while outlying submarkets experienced a slight dip (20 bps.)

Still, two nodes witnessed notable vacancy swings. Vacancy increased 60 bps in Central Edmonton while falling 80 bps in Sherwood Park, Alta.

Direct vacant space declined in all submarkets except Central Edmonton, while sublease vacancy remained flat throughout the Alberta Capital Region. In the most significant change, Central Edmonton vacant headlease space fell by 60,000 sf, while the node’s vacant sublease space increased by 154,000 sf.

Overall sublease space vacancy was on par with the 1.2 million sf recorded in the second half of 2023. But vacant headlease space set a high not seen since the first quarter of 2021.

Meanwhile, sales volume hit its lowest point since the first quarter of 2021 as fewer than 10 deals, with a total value of less than $100 million, were completed.

“We believe the recent cut in interest rates has caused lagging sales, and expect [the second half of 2024] to pick up with institutional money re-entering the market,” said Avison Young.