Airdrie's business real estate sector experiencing growth pains – Airdrie Today

Airdrie’s business sector is experiencing some growing pains, with a general shortage of affordable commercial real estate spaces in the city, and some significant growth limitations in its industrial real estate sector capacity at the moment.

According to “Airdrie’s Growth Report: Tracking Development and Change,” Airdrie’s industrial properties are slightly more expensive to lease than similar lands in Calgary, at $161 per square foot versus $159 per square foot. However, the industrial real estate available in the city tends to be of smaller size than properties available in Calgary and Balzac, which creates a growth limitation for what types of businesses could actually establish themselves in Airdrie.

“With the Hamlet of Balzac to the south of Airdrie currently attracting several new distribution and logistics buildings,” the report reads, “Airdrie has become home to many industrial tenants that occupy the small-to-medium-sized warehousing that makes up nearly 75 per cent of Airdrie’s industrial inventory.” 

The report goes on to state these user groups “have been amongst the most affected by the pre-pandemic Alberta economic downturn, resulting in less demand for new space and inconsistent leasing activity, ranging from under 10,000 to 50,000 square feet per quarter.” 

On the other hand, there are also some positive signs that this might be turning around, as the Calgary region as a whole experiences a post-COVID boom.

“Alberta industrial markets continue to build momentum,” the report reads, “and municipalities within the Calgary Metropolitan Region, including Airdrie, are reaping the benefits.” 

The report cites recent announcements such as the Costco distribution centre expansion, whereby the existing northeast Airdrie facility will increase by 700,000 square feet over two phases, as an example of the investment that is occurring in Airdrie. 

“Future development and investment attraction are likely to be heavily concentrated in the Highland Park Industrial area, joining projects such as Highland Common, High North Business Centre, and larger tenants such as TransCanada Turbines, Belron and Costco,” it read. 

On the commercial real estate side of things, there is a strong demand for retail and commercial space in Airdrie.

Retail space crunch

According to the same growth report, there has been a strong post-COVID demand for retail and commercial space in the city. During the pandemic, demand dropped off to a point where there was only 2,500 square feet per quarter being leased. Recent quarters have shown an upswing to about 4,500 to 6,000 square feet of leased space per quarter. 

That strong demand for commercial retail space in Airdrie has led to increased lease prices and a bit of a space crunch, acknowledged Tara Levick, an economic development officer with the City of Airdrie.

For smaller businesses just getting started or those wishing to expand, she said cost challenges in the lease market may represent a disincentive to taking that next step to procure a storefront property.

“We definitely heard in our (2022 Airdrie Economic Development) Business Survey that costs and availability of office, commercial and industrial space and land is top priority,” Levick said. “It is definitely something that is affecting the majority of our businesses. 

“What we (as a City) are doing is a deeper dive into the survey results to see if that is industry-specific, but we are definitely seeing low vacancy rates in Airdrie.”

There are some new developments coming soon which may eventually help alleviate some of that space crunch, she added.

“We are definitely seeing more (commercial) areas come on line,” she explained. “Down by Walmart in Sierra Springs, there is a new community coming online that will have a commercial retail focus. We are seeing growth opportunities in the downtown with the launch of a new downtown plan (by city council). And then in the booming areas like Kingsview Market and Gateway north of Superstore…We are seeing land that has been vacant for a while being built on – so that’s always very exciting to see.”

But Levick acknowledged there is not a lot of smaller scale, affordable commercial real estate available in Airdrie at the moment to help incubate newer start-ups.

Downtown revitalization

She said the City’s long-term plan to revitalize downtown – passed by City council in September – would likely help encourage some property owners in the area to think about converting existing spaces to help foster more local retail openings in Airdrie. However, she also feels many of those who own older commercial buildings in the city were already moving in that direction on their own even before those incentives were brought in.

“What we are seeing is that this is happening organically through business owners,” she said. “We are seeing an increase in business owners that are opening more like a coworking space. They are taking on the full lease themselves, but the intent is for it to be multiple businesses operating in that location. And that is something we haven’t seen in Airdrie before very often.”

The next step for Airdrie Economic Development and the City of Airdrie, Levick said, is to intensify efforts to attract new commercial and industrial investment in the city. The municipal government has recently created a new staff position that will be solely dedicated to attracting investors under the economic development portfolio. 

“We have a plan on how to attract business here, and we have done some marketing concepts on what makes us competitive and unique that they would choose us over other locations,” she said. “That is something our department is very excited to roll out, knowing we have six quarter sections up in East Points that are ready to go at any time.”

According to Levick, Airdrie has many natural advantages that will hopefully make the community a fairly easy sell to potential developers and investors.

“We are competitive with property taxes (to other nearby jurisdictions), but we are also competitive through location, right along the QEII [highway],” she explained. “We are competitive in (having) a young workforce, and we are competitive in quality of life. We see excellent numbers in people that live here who love living here.”

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