When downtown real estate slumps, as it has in Calgary, office workers can feel it coming to work each day.
With thousands of jobs gone from Calgary and nearly a quarter of the city's office space vacant as of the last quarter of 2016, the streets seem emptier, say business leaders, even those who have seen many other economic ups and downs.
With comparatively few residential units in the downtown core and new office space becoming available this year (including the prominent 707 Fifth office development), some have predicted the vacancy rate will continue to rise, possibly to one-third by 2018.
However, a recent report by real-estate services company Colliers International argued that improvement may be coming, with the oil and gas sector showing some signs of stability, including an easing in world production, helping to stabilize energy prices.
"With 2016 now behind us, the pessimism that has prevailed throughout the year has now shifted to cautious optimism for consumers and producers alike in downtown Calgary," the report said.
It added that although the vacancy rate will likely continue to climb, "there is growing sentiment that the worst is behind us with respect to fundamentals in the energy sector."
This is predicated on a forecast that the city will see an end of its recession and move back to positive economic growth, the report said.
Like other market watchers, researchers at Colliers indicate that this a prime time for office tenants who are staying put to take advantage of good lease terms and lower costs.
As the Colliers reported noted, "there is still 10.5 million square feet of office space on the market, meaning tenants with upcoming lease expiries are in a position to capitalize on historically low rental rates and attractive inducements" by landlords looking to fill their buildings.