As Edmonton office markets reaches almost 12% vacancy in the beginning of 2017, data shows at least four office towers selling in April alone with no signs of the market cooling off. The state of commercial real estate in Edmonton has seen some bumps and pivots over the past few years, and while office demand remain sluggish the retail sector remains strong. Four Sales Reported in April In April 2017, four sales of local office buildings have been recorded. HSBC Bank Place sold for $35 million, which was a huge decline from the $83.4 million it sold for in 2010. In addition, Enbridge Place sold for just $25 million, and had sold for $90.85 million in 2010. Two other office buildings sold for less than half of what they had sold for in 2011. All four of these reported office sales were by the same company. The four buildings sold showed a decline of more than $63 million over just 6 to 7 years, and in-line with the office market in Edmonton they had high vacancy rates.                                                                                                                                               More Recent Sales Another office tower was recently sold for a very shockingly low price. Highfield Place sold for just $5.15 million. It has previously sold for $27.61 million in 2011, with the discount coming in at nearly 80% in just six years. At the time of the sale, this 104,210 square foot building had a 71.19% vacancy rate. Thus, although experts familiar with the Edmonton office market don't believe the previously four office buildings mentioned were a complete picture of the office market, Highfield Place is another example of an office building selling for less than half of original purchase amount.   Bumpy, but Positive Roads Ahead For Edmonton, the office sector of the commercial real estate market may be struggling right now. However, it's expected to improve as the economy starts to recover and adapt. These statistics mark just a few speed bumps along the path. There are several reasons many believe the economy is actually on its way back up, including the plans for a new hospital in Southwest Edmonton and the higher earnings reported by Canadian Western Bank. In addition, the retail market continues to remain stable, even during the recent economic fluctuations. Summary Edmonton economy, high vacancy rates and low tenant demand for office space are having a downward effect on the sale price. As more vacant office spaces are expected to come online over the next three years this trend is likely to continue. Owners will have to consider if the will repurpose the buildings to another use like condominiums, hotel or assisted living facilities, reinvest and improve the space to meet tenant demand, or if they will sell at less than half their original purchase price. There are many reasons to believe the economy in Edmonton is starting to turn for the better, including strong retail trends, but until some of the excess supply is repurpose to meet demand, office investors that are adept at turnarounds and repositioning will find this trend welcoming news.    

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