2016 Mercantile Market Report – BOOK FORMAT

www.jrmercantile.com • 1005b 1st St SW • T2R 0T8 • Calgary, Alberta, Canada

CALGARY 2016 • Issue I RETAIL SPACEMARKET REVIEW

Brewery District - new commercial development in Inglewood26,287 Sq. ft. - total avaliable space for lease in phase 1 by JR Mercantile Real Estate Advisors Inc.

APPENDIX

JR Mercantile Profile

New Developments in Calgary

Clients Members of our Team have Recently Worked with

Retail Space Market Overview

Retail Space Market Overview Map

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JR MERCANTILE PROFILE

JEFF ROBSONPresident and Broker403-770-3071 ext. [email protected]

Jeff has in excess of 16 years of commercial real estate advisory experience. He started his career with a large international brokerage firm; spent several years leasing enclosed malls with one of Canada’s largest pension funds; traveled across Canada with boutique tenant representation firms and has head up the leasing initiatives of some of Canada’s most dynamic mixed use developers.

With a focus of inner-city development, Jeff participates early in the design phase to help ensure the end product is not only leasable but workable for both Landlord and Tenant, ultimately providing a legacy of integration into the community in which the project will be situated. With a client base ranging from institutional landlords to local entrepreneurial developers and from high profile restaurateurs to national retailers, Jeff is passionate about the service and results he provides his clients.

Jeff is currently an active member of the International Council of Shopping Centres (ICSC) and a member of the Commercial Real Estate Advisory Committee of the Real Estate Council of Alberta (RECA).

When not working on behalf his clients he looks forward to spending time with his wife and four kids, finding something active outdoors or continuing his ongoing battle with his cello.

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EMILY NOLANResearch


JONATHAN GHERONDirector of Leasing and Associate403-770-3071 ext. [email protected]

Jonathan Started his Real estate career as a residential sales associate with Royal Lepage knowing that he wanted to join the forces of the Commercial real estate team in the future, after seeing much success in the residential side Jonathan decided to pursue his goal of joining a Commercial firm and did so in 2012 by becoming a Retail Leasing associate.

Jonathan’s enthusiasm and willingness to learn are what sets him apart from the rest, he uses every chance he gets to improve himself and his techniques. Jonathan is driven to make a name for himself in the business, while holding customer service to the highest regard. Jonathan also brings a competitive edge to the JR Mercantile team being a 2nd degree black belt in Tea Kwon Do and competing all over the world, Jonathan knows what it takes to come up on top and will do everything possible to achieve it.

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KAYLA BROWNEGraphic Design

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OUR CORE VALUES

CollaborationWorking together with our clients and fellow Team members in a productive and supportive manner in pursuit of common goals shared by the Team and our clients.

InsightBringing an educated and researched perspective to each and every facet of our involvement in commercial real estate.

AccountabilityAccountable to each other on the Team and to our clients for what we agree to undertake

CredibilityDeliver what we promise

WE WORK WITH CLIENTS WHO VALUE

InsightfulnessWe choose clients who possess a good understanding of the market and a vision of where they want to be.

CollaborationWe look for clients who value working in a collaborative environment, providing us with information and decisions we require to advance their interests.

AccountabilityWe choose clients who are looking for a long term relationship not a one time transaction.

CredibilityWe align with clients who have a good reputation and are willing to act on the advice we provide them and value the experience we bring to the table.


WHY OUR CLIENTS CHOOSE US

Our clients tell us that we are credible in that we deliver on what we promise. They appreciate our collaborative approach to their real estate needs whether it’s a tenant looking to enter or expand in the Alberta market or a developer trying to decide what would be the highest and best use of their land. Our in depth market knowledge and understanding of retail and lifestyle trends is relied on by institutional developers, restauranteurs and entrepreneurs involved in all aspects of retail real estate.

We have experience in leasing assignments ranging from 15,000 square foot street front retail to 500,000 square foot enclosed shopping centers.


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CBDNAME202-227 17 Ave SW3 Eau Claire (On Hold)600 Centre (The Bow South)608 7th Street SWAtlantic Living BlockBaron BuildingCity Centre Curtis BlockEau Claire Tower 1110 9th Avenue SW10th Avenue and 9th Street SWVerve CondominiumMyriadFirst Canadian Centre - East TowerFirst South CalgaryGWL Eau ClaireManulife HouseMount Royal Village WestOxford TowerPark PointPlace 10 (East and West Towers)Q BlockTelus SkyThe Shops at East VillageWest Village Towers17th Ave and 7th Street17th and 8th StreetAsi Sentinel BlockThe WindsorArris Keynote Tower FourONEStampede Station II (On Hold)1109-1117 Macleod Trail SETOTAL

NEW RETAIL DEVELOPMENTS IN CALGARY

SIZE (SF)36,72320,50035,0006,43412,76715,80020,00060,59925,034150,0007,20013,20010,00021,000375,88026,7006,92560,00041,1002,20048,20020,40031,13842,00090,00025,000TBDTBD24,86260,00012,10050,000TBD12,0001,362,762

CENTRE NORTHNAMELido in KensingtonCo-op Development Site on 16th AveBrookfield PlaceKensington by Bucci619 16 Avenue NE (Trans-Canada Hwy) Centro1319 Edmonton Trail NETOTAL

SIZE (SF)9,0003,000300,0009,0007,9159,0004,700342,615

NORTH EASTNAMEKeystone Common8408 Saddlebrooke Drive NEAirport Business Park Stonegate PlazaAviation CrossingDeerfoot City (Deerfoot Outlet Mall)McCall Landing/JacksonportSky Point LandingStonegate Common8408 Saddlebrook Drive NEWestwindsTOTAL

SIZE (SF)700,00015,46060,00018,00042,000650,0001,000,000500,0001,660,00015,460 26,9644,672,424

NORTH WESTNAMEBingham Crossing (Phase 1)Bow Valley Crossing Crestmount CentreGreenwich Hawkwood LandsNolan Hill Co-op DevelopmentNorth Stoney GreensSage Hill CommonSage Hill Crossing Tuscany LandingUniversity City/Brentwood VillageUniversity DistrictWest Calgary Market Place TOTAL

SIZE (SF)270,000TBDTBD100,000TBD1,200530,000386,000384,0007,00040,000245,000800,0002,763,200

SOUTHNAMEAuburn Bay StationProvidenceMacleod StationSouth Macleod CentreThe Bluffs (Deerfoot Meadows)Walden LandingSeton (PhaseII)Mahogany Village MarketTOTAL

SIZE (SF)84,56411,200525,300TBD500,00022,000450,000200,0001,793,064

SOUTH EASTNAME3916 Macleod Trail SEBrewery District (Phase I)I.D InglewoodAvliThe Shops at the East VillageVahlzEast Hills 12725 52nd Street SETOTAL

SIZE (SF)9,00724,4616,3847,629240,0001,400973,000215,0001,476,881

SOUTH WESTNAME9815 Fairmount Drive SWCurrie BarracksBritania BlockTrinity Hill at Canada Olympic Park West Springs LanndingMission 34Springbank Hill MarketOdeonHighstreet CalgaryElbow ValleyInfinity at Mardaloop1506 11th Avenue SWWillowhurst (Springbank Hill Market)TOTAL

SIZE (SF)7,200250,00011,400460,00080,0001,79084,50011,000600,00091,24711,2817,900193,0001,809,318

TOTAL CALGARY DEVELOPMENTS

PROJECTED OR UNDER CONSTRUCTION

CLIENTS MEMBERS OF OUR TEAM HAVE RECENTLY WORKED WITH

TENANTS

LANDLORDS

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RETAIL SPACE MARKET OVERVIEW

The economic situation in Alberta has been the most widely-discussed topic in Calgary in 2015. With the price of oil now below $30.00 a barrel it is hard for Albertans not to become disillusioned. Although the price of oil is the lowest it has been in several years, there are many reasons for Albertans and businesses operating in the province to remain optimistic. The oil and gas companies in Alberta may not be thriving right now, but many other industries in the province are. Calgarians are still spending, perhaps not as much as they were in 2014, but are nonetheless continuing to flock to Calgary’s many great restaurants and spend their Saturday afternoons shopping. Restaurant owners and retailers currently operating in Calgary haven’t felt as significant of a drop in sales as the media often portrays, and there continue to be announcements of new retail shops and restaurants planning to open in 2016.

DEVELOPMENT IN CALGARY

It is hard to believe that we are experiencing an economic slowdown given the current volume and backlog of development occurring in Calgary. Developers continue to have a great deal of interest in the Calgary market and are holding onto the belief that the price of oil will rebound once again. Developers understand that when the price of oil does rebound there will be rapid growth in the number of people interested in buying condos and apartments located in the inner-city, close to the great amenities available in Calgary’s core. Thus, in order to meet current and future demand, it is no surprise that in the past year, several major mixed-used development projects were announced that contain sizeable amounts of retail space.

The East Village continues to be a hotspot for developers, and they are racing to purchase the few remaining sites. The upcoming construction of the new central library and the national music centre in the next few years; the recent renovation of St. Patrick’s Island, as well as the opening of Charbar, Phil & Sebastian Coffee Roasters and Sidewalk Citizen Bakery last year, it is not surprising that this area has garnered such attention

from developers. Embassy Bosa, one of the main developers with significant interest in the East Village, announced last fall that it will build a 34-storey mixed-use building in partnership with RioCan. The development, which is being called Arris, will be Embassy Bosa’s fourth development project in the East Village and will include approximately 500 residential units and 200,000 square feet or retail space, 80,000 of which square-foot will be occupies by Loblaws.1

Calgary’s Beltline region has always been a prime spot for residential and commercial development, but the City’s recent revitalization of the underpasses between 9th and 10th Avenue SW has made the area all the more desirable to developers. There has been a flurry of development on 10th Avenue in particular. The completion of Qualex Landmark’s Mark on Tenth (34-storey mixed-use tower) WAM Developments 17 and 34-storey mixed-use towers, Strategic’s ONE development (32-storey mixed-use tower), Centron’s Place 10, Lamb development’s 31-storey mixed-use tower will add over 2,500 residential units to 10th Avenue.2 Lastly GWL’s redevelopment of the Alberta Boot site consisting of 2 35-story towers housing 303 apartments and a Marriot hotel. The influx of new residents is great news for inner-city retailers as they will be gaining a large number of customers living with walking distance, and that fit their target demographic.

17th Avenue and the East Village continue to be a hotspot for developments. However, these areas are seeing stiff competition from the communities that surround the inner-core in terms of the pace and volume of new development. For example, Embassy Bosa and Canada Lands Company have teamed up for a multi-use development that will feature over 600 residential units, 250,000

1 Alex Frazer-Harrison, Arris To Make Big, Bold Statement As Gateway To East Village, October 16, 2015: http://www.vancouversun.com/Arris+make+bold+statement+gateway+East+Village/11443183/story.html?__lsa=b3e0-b7b7 and Mario Toneguzzi, Embassy BOSA still bullish on Calgary condo market, September 9, 2015: http://calgaryherald.com/business/local-business/western-canadian-developer-embassy-bosa-bullish-on-calgary-condo-market.2 Richard White, 10th Avenue Warehouse District Renaissance, January 7, 2016: http://calgaryherald.com/life/homes/condos/white-10th-avenue-warehouse-district-renaissance.


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square feet of retail space and 613,000 square feet of office space and eventually 3,500 homes.3 West Campus Development Trust will also soon begin work on a mixed-used development that is situated in the northwest between the University of Calgary, the Foothills Hospital and the Calgary Children’s hospital. This new urban village will include 245,000 square feet of retail space, 7 Million square feet of residential space and 1.5 Million square feet of office space and 40 Acres of green space.4

While the inner-city continues to produce the largest number developments that include some retail space, the Northeast dominates the Calgary market in terms of total planned square footage of retail space, with over 3 Million square feet of retail space being built in the next few years. Shape Properties acquired Deerfoot Mall last year and announced that it would convert the enclosed mall to a collection of retail buildings that can be accessed by exterior doors connected by a collection of pedestrian-friendly streets and also add 650,000 square feet of retail space.

Developers’ willingness to purchase expensive tracts of land in the inner-city provides strong evidence of their faith in the Calgary Market. For example, the Great Group of Companies paid almost $49 million for the city block that the YWCA was located on and Grosvenor recently paid over $8.25 million for the 26,000 square-foot lot that Sony was formally located at 1405 4th Street SW.5 Jeff from our team was involved in the recent sale of the Curtis Block lands, 84,000 square feet of land between 12th and 13th Avenue SE.

ECONOMY

For the past few months, the media have painted a very negative picture of the economic situation in the province of Alberta. However, it’s not all doom and gloom; many companies in Calgary are still growing, and taking on new employees. The agriculture, construction, manufacturing, support services, public administration and educational services industries all experienced growth in 2015.6 Though the city is highly dependent on the oil and gas industry, retailers must remember that there are many other profitable industries in Calgary that have no ties to the oil and gas industry. There is still money to be made in the Calgary and residents and tourists are still spending.

A weakened Canadian dollar resulted in an increase in the cost of living in 2015, but this was not necessarily bad news for retailers as they benefitted from a decline number of Canadians shopping in the US or online through US retailers. Moreover, a weak dollar has encouraged Americans to travel north to shop, pulling yet more business into the province. In the first ten months of 2015 the number of Canadians making overnight shopping trips to the US declined by 21% while the number of Americans travelling north to shop increased by 9.3%.7 Doug Porter, chief economist at BMO Capital Markets suspects that as long as the Canadian dollar remains at its current low, “cross-border shopping (to the U.S.) will all but die”.8 This shift, combined with an increase in the number of Calgarians taking staycations rather than vacationing out of the province means that more money is being spent locally. Calgarians who chose to remain in the city for their


3 Mario Toneguzzi, Development Permit Application Submitted for Currie Barracks, January 6, 2016: http://calgaryherald.com/business/real-estate/development-permit-application-submitted-for-currie-barracks 4 https://myuniversitydistrict.ca/assets/Uploads/WCDT-RealEstateBroch-7-Sept2.pdf. 5 Sharon Crowther, Downtown Calgary keeps booming along its Beltline, December 11, 2015: http://www.theglobeandmail.com/life/home-and-garden/real-estate/downtown-calgary-keeps-booming-along-its-beltline/article27720405/.

6 Mario Toneguzzi, Hiring Still Taking place in Some Calgary Industries, December 30, 2015: http://calgaryherald.com/business/local-business/hiring-still-taking-place-in-some-calgary-industries. 7 Alistair Sharp and Amrutha Gayathri, Slumping Currency Holds Silver Lining for Canadian Retailers, January 7, 2016: http://ca.reuters.com/article/businessNews/idCAKBN0UM01W20160108. 8 Alistair Sharp and Amrutha Gayathri, Slumping Loonie Holds Silver Lining for Canadian Retailers as Cross-Border Shopping Expected to ‘All But Die’, January 12, 2015: http://business.financialpost.com/news/retail-marketing/slumping-loonie-holds-silver-lining-for-canadian-retailers-as-cross-border-shopping-expected-to-all-but-die.

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vacation will be more likely to seek out local indulgences like buying clothes or going out for dinner in order to counteract feelings of deprivation.

Developers also stand to benefit to a degree from lower oil prices because layoffs by oil and gas companies have increased the number of skilled tradesmen in the city searching for work. This influx will not only allow developers to develop sites at an accelerated pace, it will also enhance the quality of the mixed-use towers being built in the city.

Fear about the economic climate in Calgary led to an increase in profits of Calgary’s consignment stores in 2015 as many Calgarians have sought to make a bit of extra cash by selling unwanted brand-name clothes. Some consignment store owners have said that December was most profitable month ever. This suggests that Calgarians are still very interested in purchasing quality goods, but are being more strategic about how they do so.9 Eight new consignment stores opened in Calgary in 2015 to meet the huge demand for high-end clothing at great prices.10

VACANCY RATES IN CALGARY

Vacancy for retail space is currently 3.15%, up nearly one percent since last June. The increase is due to the fact that several developments with retail components were completed in the last six months in the downtown core and the NE. We predict that retail vacancy rates will increase to 4% by the end of 2016. An increase in the price of oil will encourage retailers already operating in Calgary to expand as well as draw new retailers, both national and foreign, to the city.

RETAIL TREND

In 2015, a number of major national and foreign retailers set up shop in Calgary and opened new or additional Calgary locations. Chinook Mall had a particularly good year as it welcomed Wilfred, Hot Topic, Kate Spade, Marc Cain, Pottery Barn Kids, IndigoKids and American Girl Boutique. The highly popular Canadian yoga wear company, Lolë, and the popular American home décor store, West Elm, joined the ranks of other great national and local retailers on 17th Avenue this past year. 2015 was not just a great year for fashion lovers in Calgary; hunters and adventure-seekers anxiously awaited the opening of the first Cabela’s store in Alberta at Shape Properties’ Destination Deerfoot in the NE.

If 2015 was a great year for Calgary shoppers, 2016 looks like it is shaping up to be even better as Saks Off 5th will open in Cross Iron and the upscale sporting goods retailer, Sporting Life will open its first western location in Southcentre Mall in the Fall of 2016. Recent announcements about store openings is certainly welcome news to Calgarians as it suggests that retailers have faith that economic recovery in Alberta is imminent.

2016 also looks to be a good year for the craft beer industry. Recent changes to the taxation laws for breweries in Alberta will provide some much needed tax relief for small-scale beer producers, as amendments to the beer and liquor taxation laws seek to remove the barriers that prevent small producers from growing their businesses.11

RESTAURANT INDUSTRY

2015 was a great year for foodies in Calgary as a number of great restaurants opened in the city. Though high-end restaurants struggled in 2015, mid-priced restaurants had a profitable year as Calgarians opted for more affordable food options rather than give up dining out. With the number of new restaurants opening in the city in 2015, it is difficult to believe Calgary is in the midst

9 Stephanie Wiebe, Calgary consignment stores deluged by high-end brands amid downturn, December 29, 2015: http://www.cbc.ca/news/canada/calgary/calgary-consignment-stores-designer-brands-1.3377686. 10 Kait Kucy, 9 New Consignment Stores in Calgary, November 25, 2015:http://www.avenuecalgary.com/Shopping-Style/New-Consignment-Stores-in-Calgary/. 11 Claire Theobald, Alberta Tax Has Craft Brewer Crying in Beer, November 16,

2015: http://www.edmontonsun.com/2015/11/16/alberta-tax-has-craft-brewer-crying-in-beer

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of an economic slowdown. And with so many great new food choices in the Calgary, it really is no wonder that the restaurant industry, for the most part, continued to thrive in 2015 despite economic instability. Calgary’s booming restaurant industry has inspired several well-known chefs to launch new concepts in 2016.

Selection of Restaurants that opened in 2015

Ace Diner: Our team is proud to have been involved with the opening this new all-day diner. The restaurant is serving up twists on classic diner foods as well as offering a range of baked goods, classic milkshakes, Phil and Sabastian coffee, and even several healthy smoothies.

Charbar: Since its opening last June Calgarians have flocked to the Simmons Building in the East Village to sample Chef Jessica Pelland’s Argentinian-inspired creations. Charbar shares the Simmons building with Sidewalk Citizen Bakery and Phil & Sebastian Coffee Roasters, both of which similarly share Pelland’s passion for elevating Calgary’s food scene by offering unique foods and drinks made with quality, ethically-produced ingredients. Unlike its sister restaurant, Charcut, the focus of Charbar’s menu is largely vegetarian cuisine. Though there are many options for meat lovers, vegetarians will be astounded by the number of choices they have as half of the menu items are veggie-friendly. Be sure to check out Charbar’s rooftop patio this summer as Pelland and her staff will be designing a new menu exclusively for this section of restaurant.

Pigeonhole: Justin Leboe, the co-owner and executive chef at Model Milk on 17th Ave, has further solidified his title of one of Calgary’s, and arguably Canada’s, most talented chefs with the opening of this restaurant. In November enRoute Magazine named Pigeonhole the “Best New Restaurant in Canada”. After one look at European-inspired menu that challenges all culinary rules, it is easy to see why Leboe’s latest venture has earned him local and national acclaim.

Cactus Club Cafe (on Stephen Ave): The long awaited opening of this location of a profitable Canadian chain occurred this past fall and we can confidently say that the hype was not undeserved. The restaurant has been extremely busy since it’s opening in November. The restaurant’s initial success is not surprising given that this location has exceptionally great food, friendly staff and interesting décor. We are sure that the restaurant will continue to be a favourite spot of Calgary’s downtown workers for many years to come.

Beltliner: We are extremely pleased to have had a hand in securing the space for one of the Calgary’s biggest culinary hits of 2015. Given that the restaurant is owned by Brendan Bankowski, one of the co-owners of Taste (another Beltline favourite), Calgarians had high expectations for this restaurant and our team can confidently say the restaurant lived up to those expectations. The restaurant has been so successful in the few months that it has been open that the owners are already considering launching a similar concept in another one of Calgary’s trendy communities.

Made: Former Brava Bistro chef, Andrea Harling, is serving up healthy, ready-made meals for busy Calgarians in five locations across the city. The restaurant caters to health-conscious Calgarians who want to maintain a healthy diet despite their busy lifestyle. The success of the recently-opened Calgary locations has motivated the owners to open locations in Vancouver later this year.

Vitality Tap: Our team was incredibly excited when this American Juice chain approached us to find them a retail space in Calgary. The juice bar’s first Canadian location in Fifth Avenue Place has been a great success. Vitality Tap’s development team is constantly conducting research to devise the healthiest combinations of vegetable and fruit juices that will keep you looking and feeling great.

The Derrick Gin Mill and Kitchen: This new Stephen Avenue restaurant is a new favourite of Calgary’s gin lovers. The Derrick assumed the space of the short-lived El Dorado restaurant and was able to open quite quickly because owners opted to make


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few changes to the décor. With over forty types of gin available, there really is a drink for everyone, even those who claim not like gin. In addition to the restaurant’s extensive drink menu, the Derrick has an impressive food menu that includes items such as smoked beef tatare that arrives at your table under a glass dome, and gin and tonic inspired desserts.

PRLR Lounge: It is an intimidating task to open a restaurant in Kensington as there already are so many great restaurants and bars in the area, but the PRLR Lounge has proven to be an equal contender. The popularity of the restaurant is largely due to its speak-easy theme and interesting drink menu. Though the food choices are limited at this cocktail lounge, it does serve dishes that you will not find anywhere else in the city. For example, the restaurant offers French Toast for dinner and a dinner-time take on the ploughman’s lunch.

Native Tongues: In 2015 Cody Willis landed his first restaurant with a creative take on Mexican inspired food and after a few short months started to receive top marks from a number of food critics. We were pleased to be involved in working with Cody to secure his space at 235 12th Avenue SW.

Highly-Anticipated 2016 Restaurant Openings:

Vin Room: We would like to congratulate our friend, Pheobe Fung on the upcoming opening of a third Vin Room location. She will be joining Calgary Airport’s newly renovated international terminal. Be sure to arrive at the airport early for your next international flight so you can dine at this excellent restaurant before you depart!

Ten-Foot Henry: We are excited to announce the upcoming opening of Steve Smee’s and Aja Lapointe’s restaurant. Having brokered the deal for this prime 1st street location, we are especially excited to sample the menu that Smee and Lapointe have been talking about for the last several months. Given Smee and Lapointe’s extensive experience working and owning some of Calgary’s best restaurants, we are sure that their latest venture will not disappoint Calgary’s foodies.

Shokunin: Many Calgarians were sad to see Downtownfood close last summer, but Darren MacLean’s latest venture, Shokunin, looks to be just as promising. MacLean’s new restaurant will serve authentic Japanese dishes and will be located in Mission. Just having spent several months in Japan studying the country’s cuisine, MacLean is a deserving competitor amongst the other great restaurants in Mission.

Cluck’n’Cleaver: The latest venture of Top Chef competitor Nicole Gomes is proving that fried chicken can be sophisticated. The use of quality ingredients and an “undying love” of chicken are what set Gomes and her sister Francine’s fried and rotisserie chicken takeout joint in the Beltline apart from quick-service restaurants offering similar dishes.12 With Gomes’ culinary reputation as a chef, we are sure that after a bite of her chicken you will be convinced that fried chicken is not just a late-night indulgence.

Oliver & Bonacini: After having been doing renovations for nearly a year at the Bay on Stephen Avenue, Calgarians have becoming increasingly curious about what this 11,500 restaurant will look like when it is completed in the spring of 2016. This massive restaurant will comprise of 7,500 square foot dining room and a 4,000 square foot lounge with attached outdoor patio.13 We cannot wait to taste the dishes that top Canadian chef, Ryan O’Flynn will be serving up.

WHAT 2016 HOLDS FOR CALGARY’S RETAIL MARKET

Economists predict that the price of oil will return to the $50.00 a barrel mark by the end of 2016.14 An increase in the price of oil and the ensuing restoration and creation of jobs will help to

12 Julie Van Rosendaal, Chef Nicole Gomes on her Climb to Culinary Success, Aug 28, 2015: http://www.cbc.ca/news/canada/calgary/chef-nicole-gomes-on-her-climb-to-culinary-success-1.3208327. 13 Liane Faulder, Edmonton’s loss is Toronto’s gain as chef Ryan O’Flynn leaves Westin Hotel, November 3, 2015: http://edmontonjournal.com/life/food/edmontons-loss-is-torontos-gain-as-ryan-oflynn-leaves-westin-hotel. 14 James Berkow, Experts count on an oil rebound next year despite crude’s rout, December 22, 2015: http://www.bnn.ca/News/2015/12/22/Oils-rout-hasnt-extinguished-optimism-as-experts-count-on-a-rebound-in-2016.aspx.

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restore Calgary residents desire to purchase luxury and other consumer items. 2016 will be a challenging year for retailers, but there are a number of actions that companies can take to encourage Calgarians to spend. The median age of Albertans is 36, the lowest of all provinces.15 Millennials (individuals aged 18-35) have a great deal of spending power and with so many of them located in Calgary, it’s important for retailers to tailor their products and marketing strategies to this demographic. One way retailers can accomplish this is by developing and maintaining an online presence through which they can educate consumers about their products and motivate them to visit the store. Not only has the internet made it possible for people to make purchases without ever leaving their home, it has also changed the way people shop in brick and mortar stores. Millennials often know what they will buy before they even set foot in a store.16 This means that retailers in Calgary must strive to connect with consumers online before they can do so in person.

Its important for retailers to not to get too hung up on the price of oil; there is still money to be made in Calgary in industries other than oil and gas. Calgary has a significant population of people still interested in spending, but they are being more selective with their purchases. This makes it more important than ever for restaurants and retailers to focus on creating quality products. Retailers cannot afford to become complacent; in order to remain competitive, they must continuously evolve and be proactive towards the constantly changing demands of consumers. The most successful retailers of 2015 were those that experimented with new concepts like opening cafés and restaurants within stores.17 It is necessary for retailers and restaurants to remain informed about new fashion and culinary trends and develop

15 Urban Development Institute - Calgary and the Canadian Home Builders’ Association, Calgary’s Young Population Demands Diverse Housing, December 10, 2015: http://www.smartergrowth.ca/calgarys-young-population-demands-diverse-housing 16 Yconic, The Millennial Shopper: More Social and Educated than Ever Before, November 20, 2015: https://yconic.com/corporate/Youth%20Insights/The-Millennial-Shopper.aspx. 17 Retail Insider, Why Canadian Department Stores are Increasingly Adding Food and Beverage Components, November 16, 2015: http://www.retail-insider.com/retail-insider/2015/11/food-beverage.

viable business strategies that will ensure their prosperity for many years to come. We believe that developers in the city have the right mindset as they are focusing on the long term, and understand that the economic slowdown in Calgary will be short-lived; with so many young, well-educated individuals in the city how could it not.

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NORTH WESTInventoryVacantVacancy RateCRU Retail Rates

5,216,875 sf94,966 sf1.82% $25-$60

CENTRE NORTHInventoryVacantVacancy RateCRU Retail Rates

2,240,802 sf95,538 sf4.26% $20-$40

NORTH EASTInventoryVacantVacancy RateCRU Retail Rates

8,623,026 sf248,551 sf2.88% $15-$35

CBDInventoryVacantVacancy RateCRU Retail Rates

3,798,935 sf237,620 sf6.25% $18-$120

SOUTH EASTInventoryVacantVacancy RateCRU Retail Rates

3,023,317 sf87,570 sf2.90% $15-$35

SOUTHInventoryVacantVacancy RateCRU Retail Rates

9,477,462 sf211,990 sf2.24% $25-$45

SOUTH WESTInventoryVacantVacancy RateCRU Retail Rates

3,273,819 sf139,545 sf4.26% $30-$45

OVERALL

InventoryVacantVacancy Rate

35,654,236 sf1,115,780 sf3.13%

2016 Mercantile Market Report – BOOK FORMAT

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