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Last month, year-to-date sales in Calgary’s city centre fell to the lowest since 1999 with just 960 transactions so far in 2016; 33 per cent below the neighbourhood’s 10 year average.

Of the 55 areas identified as making up the city centre, the Beltline – which runs between 9th Avenue and 17th Avenue S.W. – lead in year-to-date sales, and accounted for more than 15 per cent of registered transactions. And it’s not a new phenomenon; the Beltline has been buoying city centre sales for months now. Year-to-date sales are up 46 per cent.

Unsurprisingly, the Beltline has the largest inventory of all the city centre communities and sale prices have suffered just like every other neighbourhood: It’s benchmark price is down three per cent on last year. Sales are also slow, with properties averaging 51 days on the market, slightly higher than the current city-wide average of 46.

But consistent sales are what’s fuelling continued development and attracting new businesses to the area, which in turn stokes further demand from buyers, leading to some agents coining it “The Beltline Effect.”

“Grosvenor doesn’t go after mediocre sites,” claims Robert Duteau, senior vice-president of development for Grosvenor Americas, which currently owns four sites in Beltline; one fully developed, one under construction and two at planning stage, “which is why we’ll continue to contend for Beltline opportunities as they arise.

“We’ve not seen prices come down for good sites, if anything competition is growing among developers looking for safer bets in Calgary.”

Rendering of The Smith, Grosvenor's under-construction development, scheduled for completion by the end of this year and currently a little over half the 127 units are sold. (Grosvenor)

Grosevnor was one of more than 20 developers in contention for its latest Beltline purchase, known as the Sony site, on 4th Street S.W. at the end of last year. They also own an undeveloped site on 15th Avenue and 24th Street S.W., where one of Calgary’s favourite eateries, Anju, is located.

“Both will be mixed use, which will be a first for us in Calgary. We’re currently debating which development will happen first,” he says, “which one makes the most sense.”

Mr. Duteau says securing an urban grocery store for either site, which would be a first for Beltline, would swing it.

“It’s something that’s missing in Beltline currently, a good-sized, up-scale urban grocery store. If we could bring the first one to the community, that would be a big win for us. That would be the site we’d prioritize.”

Grosvenor’s underconstruction development, the Smith, is scheduled for completion by the end of this year and currently a little more than half the 127 units are sold. That’s in addition to the Drake, Grosvenor’s first residential development in Calgary that launched in 2007 and is also located in Beltline.

Rendering of The Smith, Grosvenor's under-construction development. (Grosvenor)

But it’s the long-game that’s on Mr. Duteau’s mind.

“Everyone wants to be first to market in Beltline when the market turns around, including us. We have two great sites there, both within walking distance of some of the best restaurants in the city, hipster coffee shops, boutiques. Developers are an optimistic group, a downturn is a good place to get your zoning and design done, so that’s what we’re doing.”

John Robarts, Operations Manager at Creative Restaurants, which owns some of Beltline’s most popular restaurants, including Parc Café and Brasserie and Posto Pizzeria, agrees that few locations in Calgary offer the security of Beltline.

“We opened Bonterra, our first restaurant in Beltline, 16 years ago. Beltline wasn’t really considered an A-location back then, but it was close enough to downtown to attract custom and far enough from downtown to have free parking. That seemed to work and we’ve been growing there ever since. Our latest opening was Parc in spring last year.”

Like Grosvenor, Creative Restaurants is using the downturn to plan for when the market turns around.

“We’re working on a partnership with Mill Street Brewery right now. It’s early stages, but it’ll be in the Beltline area, yes.”

The Drake, Grosvenor's first residential development in Calgary, which launched in 2007 in the Beltline. (Neil Zeller)

Mr. Robarts is also keen to capitalize on the continued development in the Beltine area and the custom those developments bring to his doorstep.

“There’s a new development going up opposite Bonterra right now called the Mark. It’s 275 units, so, say that brings 400 people to the neighbourhood and 10 per cent of those people eat in my restaurant every week, that’s a great thing. That sort of development is happening all over Beltline right now. It makes sense to be here.”

New businesses are also taking notice of the growing number of developments bringing ready-made customers to the Beltline area, including Ollia Macarons and Tea, which opened on 16th Avenue S.W. at the end of 2014.

With an ambition to bring modern French patisserie to an urban Canadian city, qwner Lindsay Rousseau and her husband, David, travelled from Victoria to Calgary in search of a suitable location.

“We were looking for an area which was liveable and walkable, ideally with a growing population and a high density of offices nearby, somewhere that a boutique business like macarons could thrive. We found Beltline and worked hard to get a space here for our business.”

The couple have lived all over the world including several cities in Europe where “being able to actually live where you live, where you don’t have to get in the car and drive everywhere” is the norm.

Lindsay Rousseau and her husband David Rousseau outside their store, Ollia Macarons and Tea, which opened in the Beltline in 2014. (Ollia Macarons and Tea)

Ms. Rousseau believes this has safeguarded their new business from the full impact of Calgary’s economic slow down.

“We’re feeling the effect of the drop for sure, everyone is, but in Beltline it can be minus-20 and a blizzard and there’s still customers coming through the door. We’re growing organically, our wholesale has taken off and we’re developing a bakeware side to the business, so things are good.”

She also hopes the current downturn might create a fertile environment for more independent businesses such as hers to get a foot in the door in Beltline.

“Some landlords are still holding out for big rents here, but others are realizing they need to be more flexible. It’d be great if more small guys like us could get a chance because communities need diversity. When small businesses thrive, the whole community thrives.”

The entrance to Grosvenor's The Drake development. (Neil Zeller)

For University of Calgary professor of economics, Trevor Tombe, the Beltline Effect is simple economics.

“Good signals for which communities are fairing well, and which aren’t, would be changes in property assessments,” he says referring to statistics from the City that outline which areas property tax has risen and which areas property tax has fallen.

“Livable, vibrant areas are less vulnerable. So, while the downtown core is, not surprisingly, losing value, Beltline and almost all other surrounding areas are on the rise. But, further from the downtown area, you can see the biggest drops are in predominately residential only areas. Areas in the N.W. close to the university and hospitals are doing well, plus the areas east of Deerfoot where there’s lots of industrial, are also doing well.”

Beyond the statistics, he says, it’s simply a popularity contest.

“It’s about willingness of buyers to pay for property. Calgary’s population is still growing rapidly, even now. So livable areas that are attractive to new comers will be more insulated from the oil shock.”