Five reasons to buy a Calgary commercial condo now

Are you leasing an office or warehouse space in Calgary? With interest rates at all time lows, now might be a good time to think about buying into your own commercial condo.

Commercial condos are an increasingly popular choice for savvy business owners who understand the value of building equity in their own company. In Vancouver and Toronto, the popularity of commercial condos is on the rise and availability is scarce. But in Calgary, there are more options for businesses wanting to buy into new, high quality, Class A commercial buildings.

In Calgary’s Meridian/Franklin area, for example, Hungerford Properties’ Nexus Business Centre is attracting companies like True Directional Services that purchased 4,100 square feet of office and warehouse space. After 5 years of renting, the directional drilling technology company felt that buying was the only option that made economic sense.

“With such low vacancy rates, rent in the Calgary market can be expensive,” says CEO Sean Senos. “Owning for my company means we can have more capital to invest in tools and growing the business, rather than throwing the money away at rent. It costs us 25% more to rent rather than to own.”

In addition to Nexus Business Centre, the top selling commercial condo in the Calgary market, there is Hungerford’s Fairmore Business Park, in South Central Calgary. Fairmore is a new 7-acre development located by Chinook Centre that is 48% sold and offers high-quality, Class A space in a brand new building.

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Why now is the perfect time to invest in your business

Are you leasing an office or warehouse space in Calgary? With interest rates at all-time lows, now might be a good time to think about buying into your own commercial condo. Commercial condos are an increasingly popular choice for businesses that understand the value of building equity in their own company. In Calgary, there are an increasing number of spaces available within new, high quality, Class A commercial buildings.

Take advantage of continued record low interest rates and check out some of the options. In Calgary’s Meridian/Franklin area, for example, Hungerford Properties’ Nexus Business Centre is attracting companies like True Directional Services, which just purchased 4,100 square feet of office and warehouse space. After five years of renting, the directional drilling technology company decided buying was the only option that made economic sense.

“With such low vacancy rates, rent in the Calgary market can be expensive,” says CEO Sean Senos. “Owning for my company means we can have more capital to invest in tools and growing the business, rather than throwing the money away on rent. It costs us 25% more to rent than to own.”

Nexus Business Centre is the top selling commercial condo in the Calgary market, but there are other popular options. Hungerford’s Fairmore Business Park is a new seven-acre development located near Chinook Centre, where your business can grow in a brand new building. There’s also NorthWing Business Park, another top selling commercial condo in the burgeoning northeast area by the Calgary airport, located on a high-visibility site fronting McKnight Boulevard and Metis Trail.

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Hungerford Properties showed its confidence in Calgary's economy when the company expanded its local real estate holdings with the November 2013 purchase of the Haworth building on 52nd Street S.E.

Built by Calgary visionary Mogens Smed in 1999, the 761,000 square-foot building on 18 hectares of land was the largest manufacturing facility west of Ontario at the time. Described as an "iconic" asset to Calgary, it has since been renamed Icon Business Park. The plan was to transform the building from a single to a multitenant facility and although Haworth still has a presence in the building, its first new tenant was Hagen - a worldwide distributor of pet supplies that leased 195,000 square feet.

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February 11, 2015 – With record low interest rates and continued high leasing rates for industrial spaces, an increasing number of Calgary businesses are moving towards buying their own office and warehouse space as an investment into their future. In Calgary’s Meridian/Franklin area, the Nexus Business Centre is attracting a plethora of local businesses seeking new, modern, class-A commercial space in a well-located area. The development is already over half sold since launching last year and will be complete this spring.

Jason Martin, VP of Impact Sales and Marketing, just purchased 2,900 square feet of office space. The 30-year-old consumer packaging goods company is moving into Nexus from space right around the corner in order to be an owner, not a tenant. “It’s exciting because it’s ours,” says Mr. Martin. “That’s always a good feeling. And everything will be new.”

Mr. Martin says he has been looking to purchase office space for many years, but the Calgary market has a limited supply of suitable opportunities. With Nexus, he was attracted to the quality construction, the fact that it’s brand new, offers an elevator, a chance to custom build the interiors, all in an accessible location.

“This is an established commercial hub, but the existing buildings are older and not up to today’s standards,” says Michael Hungerford, whose company, Hungerford Properties, is developing the property. “So we’re bringing in new, high-quality product and seeing a lot of interest.”

For Sean Senos, CEO of True Directional Services, a company that offers directional drilling technology servicing the oil and gas industry, buying at Nexus was the only option that made economic sense. After 5 years of renting, his company bought more than 4,100 square feet for a warehouse bay and office. “With such low vacancy rates in Calgary’s market, rent is expensive,” says Mr. Senos. “Owning for my company means we have more capital to invest in tools and growing the business, rather than throwing money away in rent.”

Even with the downturn in oil and gas, Mr. Senos says rent prices won’t fall along with commodity prices. “It costs us 25% more to rent rather than own. And with owning, we’re in control of the destiny of the business and build equity.”

Mr. Senos was attracted to Nexus because of the location and its proximity to downtown and by the quality of the building. Most of the supply on the market is old, he says, with compromised roofs, insulation or structures. “This was the highest quality building we looked at and the price per square foot was the same.”

With a total of 98,725 square feet of office and warehouse space, Nexus Business Centre offers a large range of sizes. For office users, available space ranges in size between 2,563 – 14,840 square feet. Office space includes 9’ clear ceiling heights, individually controlled heating and cooling per unit and full curtain wall glazing. Warehouse space ranges in size from 3,563 to 7,694 square feet and includes features such as 24’ clear ceiling heights, ability to build-out mezzanine and grade loading with 12’x14’ insulated metal overhead doors.

“This is Calgary’s top selling new industrial condo project because it offers something that is rare in the city - high-quality, affordable and well-located modern office and warehouse condos,” says Collier’s Michael Massing.

For a detailed chart breaking down the financials of owning versus leasing using the Nexus model, please click here: http://hungerfordproperties.com/nexus/ownership

Leasing activity in Calgary’s industrial real estate market in 2014 was the highest it’s been in eight years.

A report by Colliers International in Calgary says there was just over five million square feet of positive absorption – the change in occupied space – last year – the highest yearly absorption since 2006.

Despite the high rate of absorption, only 500,000 square feet of new construction was added to the industrial inventory in the fourth quarter of last year, added the report.

Colliers said the leasing velocity and lower-than-average new construction contributed to produce a lower vacancy rate of 3.82 per cent in the fourth quarter from the previous quarter’s 4.43 per cent.

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