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4 | Commercial Real Estate Guide 2013 / 14

Message from The Mayor ....................................................................................................................................... 5Message from the BOMA Edmonton President ...................................................................................................... 6Message from the Edmonton Economic Development Corporation ....................................................................... 6City core upgraded to world class ........................................................................................................................... 8BOMA BESt ........................................................................................................................................................... 14The BOMA Edmonton Board of Directors 2013 .................................................................................................... 16Economic fundamentals support continued growth in Edmonton and northern Alberta ..................................... 18The new Edmonton: Less boom, less bust ............................................................................................................ 20Interesting times for a city in growth mode ......................................................................................................... 24Retail Survey ....................................................................................................................................................... 26Downtown Survey ............................................................................................................................................... 30Suburban Survey ................................................................................................................................................. 42Local exposure. Global reach ............................................................................................................................... 54Industrial Survey ................................................................................................................................................. 56Investment Survey .............................................................................................................................................. 60Multi-Family / Apartment Survey ........................................................................................................................ 63

Arrow Engineering ............................................................................................................................................... 27Applied Colour Ltd. ............................................................................................................................................... 17Avison Young. .............................................................................................................................. Inside Front CoverBDO Canada LLP ................................................................................................................................................. 32Bee-Clean Building Maintenance Inc. .................................................................................................................. 17Bentall Kennedy (Canada) LP ............................................................................................................................. 43BOMA Awards Gala .............................................................................................................................................. 55CBRE Limited ........................................................................................................................................................ 12CCS Contracting Ltd. ............................................................................................................................................. 45Colliers International ........................................................................................................................................... 15Cushman & Wakefield Edmonton ........................................................................................................................ 62DTZ Barnicke Edmonton Inc. ................................................................................................................................... 3Dundee Realty Management Corp. ....................................................................................................................... 11Edmonton Economic Development Corporation .................................................................................................. 59Genivar ................................................................................................................................................................ 19Harvard Property Management Inc. / Currents of Windermere ........................................................................... 58Humford Management Inc. ................................................................................................................................. 13Hydro Flo Plumbing and Heating ......................................................................................................................... 19Manasc Isaac Architects........................................................................................................................................ 43Manulife Financial ........................................................................................................................ Inside Back CoverMorguard Investments ........................................................................................................................................ 29Oxford Properties Group ............................................................................................................ Outside Back CoverPHH Arc Environmental ...................................................................................................................................... 31Read Jones Christoffersen Ltd. ............................................................................................................................. 43Rochelle Rae Marketing Inc ................................................................................................................................. 53Servpro Canada Inc. ............................................................................................................................................. 13Simson Maxwell ................................................................................................................................................... 41Site BIM................................................................................................................................................................ 45Solution 105 Consulting Ltd. ............................................................................................................................... 33Stantec ................................................................................................................................................................. 61TransCanada ......................................................................................................................................................... 66Trikon Group ......................................................................................................................................................... 7Western Maintenance Edmonton Ltd. .................................................................................................................. 45Williams Engineering Canada Inc. ........................................................................................................................ 33

PublisherBuilding Owners and Managers

Association Edmonton

390 Standard Life Centre

10405 Jasper Avenue,

Edmonton AB T5J 3N4

Telephone: 780.428.0419

Fax: 780.426.6882

Email: [email protected]

Website: www.bomaedmonton.org

Leasing Guide Committee

Chad [email protected]

Daniel [email protected]

David St. [email protected]

Meghan [email protected]

Percy [email protected]

Rochelle [email protected]

Sarb [email protected]

Designed and produced by Rochelle Rae Marketing Inc

Edmonton AB Canada

780.919.9346 | [email protected]

www.rochelleraemarketing.com

Feature articles written by Bruce White

Contact: 780.619.0092 | [email protected]

Additional copies of this publication are available from

BOMA Edmonton ©2013.

This publication contains information considered accurate at the time of

publication. The publisher, however, makes no warranty, expressed or implied,

that this information is correct. The contents of this publication may not be

reproduced without permission of the Publisher. Printed in Canada, April 2013.

Table of Contents

List of Advertisers

www.bomaedmonton.org | 5

n behalf of City Council and the people of Edmonton, Alberta’s Capital City, it is my

pleasure to introduce the BOMA Edmonton 2013 Commercial Real Estate Guide.

With a focus on encouraging economic growth and the many advantages of

doing business in Edmonton, this guide provides valuable insight into Edmonton’s

economy and real estate market. Articles will feature future expansions to our city as

well as corporate growth planning and development, transforming Edmonton’s urban

form. Exciting new projects across the city will promote growth, sustainability and

economic activity for years to come, allowing Edmonton to continue becoming a hub

of innovation and excellence.

Thank you to BOMA Edmonton for creating a real estate guide that promotes

investment in our beautiful, vibrant city. With incredible amounts of opportunity,

energy and potential, Edmonton is a truly ideal place to live, work, build and invest.

O

Yours truly,

Stephen Mandel, Mayor

Message from his Worship Mayor Stephen Mandel


dmonton… World Class Upgrade

BOMA Edmonton is proud to produce another Commercial

Real Estate Guide outlining the activity in the Capital region over

the last year and projecting into the future.

The “World Class Upgrade” theme is an excellent choice for the

BOMA Edmonton Commercial Real Estate Guide at this juncture. Not

only is North West Upgrading continuing its planning and development

of its upgrader for the Capital Region, Edmonton International Airport

is continuing its expansions and growth which has resulted in huge

increases in passenger traffic. LRT expansion continues as does the

planning for growth at all four of Edmonton’s major post-secondary

institutions and many other companies continue to experience

positive growth as Edmonton, our Capital City, continues to fire on all

cylinders.

Edmonton is also growing as a burgeoning centre of trade and

finance and is home to corporate headquarters of three major financial

institutions and to the World Trade Centre, all of which are poised and

ready to spread our Capital Region’s ‘good news’ story to all markets.

Throughout this Guide you will find numerous examples that

demonstrate Edmonton is truly a World Class Upgrade for those that

live, work and play in the region. And Edmonton is poised to continue as

a city with a demonstrated consistent growth for businesses that wish

to expand or move to the region for their own World Class Upgrade.

You will find all the reasons you need in this publication, from both

personal and business perspectives, to locate and grow in Edmonton.

BOMA Edmonton is proud to sponsor this Guide and we trust that it

will serve as a valuable reference tool in your growth and commercial

real estate choices.

dmonton is a destination that promises endless opportunities

to build your business and create wealth. A growing economy,

one of Canada’s lowest unemployment rates, a favourable tax regime,

and an unrivalled living environment — factors that business leaders

look for when making investment and relocation decisions.

Responsible for Edmonton’s economic growth strategy,

Edmonton Economic Development Corporation’s primary function

is to support industry growth and diversification. Edmonton’s

building owners and managers are a critical partner in the economic

development system that contributes to the city’s success.

Our vision of Edmonton as Canada’s economic and

entrepreneurial powerhouse will become reality through a culture of

entrepreneurship, innovation and competitiveness that differentiates

our city from all others. With BOMA’s support, Greater Edmonton will

outperform every major economic jurisdiction in North America in

the coming decades, no matter what the price of oil.

Come build it here — in Edmonton: your business, your future,

your career.

EE

Brad Ferguson, President & CEO

Message from Edmonton Economic Development Corporation President & CEO

Brad Ferguson

Message from BOMA Edmonton President

Tony Prsa

Tony Prsa, President


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hen the first ceremonial shovels

of dirt are moved at the site of the

Edmonton Oilers’ new arena, it will

be a milestone in the city’s history. But in

the big picture, the arena’s contribution

to the overall growth of Downtown

Edmonton probably won’t be as big as

you think.

As it rises north of 104th Avenue

over the next five years, the arena very

likely will represent much less than one-

half of the construction underway in

Downtown Edmonton. It probably will

be less than one-fifth. And at the stated

cost of $480 million, the arena could

actually represent as little as one-tenth

of the major construction underway

in the next five years, according to an

inventory by Edmonton’s Downtown

Business Association.

The inventory was prepared by

Nathaniel Dyck, a Masters of Business

Administration student at the University

of Alberta who now works with the

development industry for the Royal

Bank of Canada. After months of

interviews and comparing notes around

town last summer, Dyck came up with

a list of projects that are expected to be

built within the next five years in the 112

square blocks that make up the official

Downtown Edmonton.

Dyck tallied 36 projects worth

$15 million or more and handicapped

them into three categories: probable,

proposed and rumoured projects. When

all 36 were added up, his spreadsheet

contained some eye-popping numbers:

$4.813 billion in total estimated cost,

of which nearly half ($2.033 billion) he

classed as probable.

“Boy, when you put it all together,

it gets scary,” says Jim Taylor, executive

director of the DBA and sponsor of the

survey.

What Dyck finds interesting is that in

addition to the arena, his list represents

a nicely balanced portfolio of housing,

office buildings, educational institutions,

infrastructure improvements and

cultural assets. He notes that even with

all the condo building underway or

recently completed, when it comes to

the number of people living downtown,

Edmonton still lags behind other cities,

particularly Toronto and Vancouver.

Remarkably, in the six months after

the inventory was made public, not

a single project fell by the wayside. In

fact, a few jumped up the ladder from

City core upgraded to world class

W

Estimated $4.8 billion worth of new projects to crown Downtown Edmonton’s two-decade revitalization.


proposals to done deals. Even while

the Oilers’ project was in limbo, the

Ultima condominiums south of the

arena district were sold out within

weeks and construction has begun.

The $160 million Fox Towers at 104th

Street and 102nd Avenue, which were

rated as proposed back in August, are

fast becoming a reality with the first

tower going up and the second phase

announced.

Other notable projects among the 36 listed in the inventory include:

Although the arena looked for a

while as if it could fall off the list entirely,

it is now as Mayor Stephen Mandel

described it in late January, “a done

deal.” With a cost estimated in early

2013 at $480 million, Edmontonians

have been promised a spectacular,

18,559-seat venue for the Oilers, live

music and other spectacles. The arena

project west of 101st Street and north

of 104th Avenue is a flagship project

that will bring thousands of people

into the new downtown after five

o’clock. In addition to the building

itself, the arena district will undergo

more than $100 million worth of

infrastructure development, including

a wide pedestrian walkway over 104th

Avenue and a 1,000-seat community

rink.

Arena-linked commercial devel-

opment has the potential to add hun-

dreds of millions of dollars worth of

new buildings to the area. In his inven-

tory, Dyck listed the rumoured invest-

• Oneofthemostcompetitive corporate tax environments in North America, with no provincial sales tax, capital tax, or payroll tax.

• EdmontonInternationalAirporthas led the country in passenger growth, which has resulted in a $1 billion airport development program.

• EdmontonwasrankedbyKPMGCompetitive Alternatives as being one of the most cost competitive jurisdictions for business in North America.

Facts for the Future:


ment in office, hotel and retail buildings

by WAM Developments and the Katz

Group at $666 million. It could turn out

to be much more. When city council ap-

proved the arena in early 2013, WAM/

Katz were talking about more than $2

billion of associated projects, including

two office towers, two condo towers, a

luxury hotel, six smaller buildings plus

an Oilers Plaza (to be cost-shared with

the city). Much of this construction is

likely to take place in succeeding phas-

es beyond the five-year time horizon of

the DBA study.

Anticipated plans for the

redeveloped Kelly and Ramsey

buildings, a former department store

that was gutted by fire in 2009, are

expected to be announced in 2013 by

developer John Day. The Dyck inventory

listed Kelly Ramsey as a probable $200

million project that would include

retail space on Rice Howard Way,

underground parking and a 24-storey

office and hotel complex.

As MacEwan University continues

to consolidate its campuses downtown,

it is expected to result in a five-year

investment of $270 million, starting

this year with a $100 million Visual,

Performing Arts and Communications

building.

Norquest College’s North Learning

Centre was upgraded from proposed

to probable in October 2012 when the

provincial government pledged $170

million to fund the project.

The $370 million Royal Alberta

Museum under construction at the old

post office site could be followed by

a number of potential projects in the

cultural sphere. A $200 million opera

house and performing arts centre,

backed by philanthropist Irv Kipnes, and

A $200 million opera house and performing arts centre, backed by philanthropist Irv

Kipnes, and major additions to the Winspear Centre, Citadel Theatre and the Stanley Milner

Library are also in the queue.

• Closeto$180billioninplanned

investment across Northern

Alberta.

• CanadianFederationof

Independent Businesses rates

Edmonton as one of the top 10

entrepreneurial cities in Canada

which includes rating the presence

of a high concentration of

entrepreneurs, high business start-

up rate, levels of optimism and

success, and sound public policy.

• NorthernAlbertainhometothe

third largest proven oil reserves in

the world, after Saudi Arabia and

Venezuela.



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Corporate Locations

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major additions to the Winspear Centre,

Citadel Theatre and the Stanley Milner

Library are also in the queue.

Dyck’s full list, which can

be downloaded from www.

edmontondowntown.com, includes at

least five office projects of various sizes

being contemplated in Downtown

Edmonton, including the multi-tower

vision for the arena development.

These don’t include the nine-acre

Station Lands, where the first of four

office buildings proposed in 2008, the

new EPCOR Tower, is fast filling with

tenants.

Which of these commercial

projects is eventually built, and in

what order, will depend in no small

part on where the City of Edmonton

decides to consolidate its offices that

are spread around downtown. The

city received 15 expressions of interest

after it announced in 2012 that it was

shopping for 350,000 square feet with

further room to expand.

Taylor, a city councillor from 1995

to 2001 and the voice of Downtown

Business Association ever since, sees

the current renaissance of the city

centre as a culmination to a two decade

campaign to reverse a startling decline

that occurred after the 1970s and early

1980s, when most of the skyline we see

today was built.

Back then, the outward growth

of the city and decades of building

indoor shopping malls had created

a doughnut effect that effectively

hollowed out downtown. By 1999, the

Woodward’s and Eaton’s department

stores were closed for good and the

Bay had left Jasper Avenue in favour of

its smaller current location.

Fighting the headwinds of an

anti-development mentality, a vision

for a downtown renaissance was put

in place. Surface parking lots began

to disappear as incentives brought

residential developers back to the

city core, testing the waters at first

with modest loft conversions. The

MacEwan campus and residential

RailTown sprung up on former

railway lands. Marquee cultural

projects like the Winspear Centre

and the rebuilt Art Gallery of Alberta

were added. Renovations of older

buildings and new highrise buildings

responded to renewed demand for

quality office space.

Altogether, it was a massive

turnaround that Taylor sums up with

one word: “Huge.” And there will be a lot

more to come.

550, 808-4th Avenue SWCalgary, AB T2P 3E8

403 • 319-0490 [email protected]

#300, 10050 - 112 St.Edmonton, AB T5K 2J1780 • 426-4960 ext.226

[email protected]

Humford Hi Res.pdf 4/16/08 1:46:57 PM

BOMA Edmonton has certified over 100 buildings in its region. For a complete listing, check the BOMA Edmonton website.

BOMA BESt Buildings have the BOMA BESt logo in the Survey section of this guide.

BOMA BESt builds on the framework of BOMA Go Green and Go Green Plus. New applicants will come in line with buildings already certified and the industry standard.

BOMA BESt delivers value: applications are assessed using third-party verifiers, the application fee is affordable and certification helps promote your commitment to environmentally aware tenants.

BOMA BESt delivers performance improvement: the process helps property managers find ways to reduce operating costs and improve building performance through improved environmental management.

BOMA BESt delivers education: it is a self-administered process that engages owners, managers, operators and tenants. The hands-on process helps building management teams learn environmentally friendly ways to manage their buildings.

Learn more about the program, download the application guide or apply now.

www.bomabest.ca

BOMA BESt Certification... The industry standard.

5 CATEGORIES OF BOMA BESt:• Office • EnclosedShoppingCentres• OpenAirRetailPlaces • LightIndustrial• MultiUseResidentialBuildings


BOMA Board of Directors 2013ExECuTIvE COMMITTEE

TonyPrsaPresident

Harvard Property Management Inc.Suite 005, 11523 – 100 AveEdmonton, AB T5K 0J8T. (780) 413-7059 | F. (780) 482-6080E. [email protected]

ShaunWuschkePast President

Bentall Kennedy (Canada) LPSuite 100, 10123 – 99 th StreetEdmonton, AB T5J 3H1T. (780) 990-7008 | F. (780) 429-0827 E. [email protected]

ChrisVilcsakTreasurer

Solution 105 Consulting Ltd.#230, 10357 – 109 StEdmonton, AB T5J 1N3T. (780) 429-4774 | F. (780) 429-4994E. [email protected]

DarcyArmstrongDirector

GWL Realty Advisors Inc.#208, 10155 - 101 StEdmonton, AB T5J 4G8T. (780) 944-0902 | F. (780) 428-4047E. [email protected]

MyronKeehnDirector

Edmonton International AirportP.O. Box 9860Edmonton, AB T5J 2T2T. (780) 890-6729 | F. (780) 890-8215E. [email protected]

SeanGrahamDirector: Membership Committee

Oxford Properties Group1700, 10025 – 102A AvenueEdmonton, AB T5J 2Z2T. (780) 426-8471 | F. (780) 424-9949E. [email protected]

JohnFredericksonDirector: Real Estate Guide Committee

Colliers International#3555, 10180 - 101StreetEdmonton, AB T5J 3S4T. (780) 969-3030 | F. (780) 424-7830E. [email protected]

AnthonyPatenaudeDirector: Government Liaison

Humford Management Inc.300, 10050 – 112 StEdmonton, AB T5K 2J1T. (780) 426-4960 | F. (780) 425-1184E. [email protected]

JordanHokansonDirector

HCI Ventures Ltd..1902 – 8215 – 112 StreetEdmonton, AB T6G 2C8T. (780) 702-0875 | F. (780) 702-0879E. [email protected]

SidneyWaskiewichDirector: Communications Committee

Dundee Realty Management CorpHSBC Bank Place, Suite 1530Edmonton, AB T5J 3P4T. (780) 801-3872 x 7872 | F. (780) 429-3914E. [email protected]

TerryMcRobbDirector: Awards Committee

Blackwood Partners Property Corp17203 - 105 AvenueEdmonton, AB T5S 1H2 T. (780) 481-8860 | F. (780) 413-0040E. [email protected]

GlenScheuermanDirector: Tax Committee

Morguard Investments Limited#1100, 10060 Jasper AvenueEdmonton, AB T5J 3R8T. (780) 421-8000 | F. (780) 424-7933E. [email protected]

TedStoneDirector: Golf Committee

Read Jones ChristoffersenSuite 100, 14904 – 123 AveEdmonton, AB T5V 1B4T. (780) 452-2325 | F. (780) 455-7516E. [email protected]

RobScottDirector: Environment Committee

Bee-Clean Building Maintenance4505 – 101 Street Edmonton, AB T6E 5C6T. (780) 435-3355 | F. (780) 436-9528E. [email protected]

STAFF

PercyJ.WoodsExecutive Vice President

BOMA Edmonton#390, 10405 Jasper AvenueEdmonton, AB T5J 3N4T. (780) 702-5007 | F. (780) 426-6882E. [email protected]

JeannetteMensinkExecutive Assistant


CoraKrywkoAccounting



ver the past decade, few cities

in the developed world have

managed to put together an

economic winning streak as impressive

as Edmonton’s. Strong fundamentals

supported by Alberta’s energy industries

enabled the city’s diversified economy

to weather the financial crisis, to invest

and reinvent itself and to embark on a

sweeping upgrade that continues to

transform Edmonton into a world-class

city.

Public investments in recent years in

LRT expansion, road networks, cultural

venues and educational institutions

are all showing benefits. Meanwhile, a

rebirth of downtown Edmonton – of

which the construction of a new arena

for the Edmonton Oilers is but one piece

– is continuing to gain momentum.

A robust 56,000 jobs were created in

the city in 2011 and 2012. In the biggest

in-migration seen since the early 1980s,

Alberta reached a pace of 10,000 new

residents a month in 2012. A year or so

after arriving, many newcomers upgrade

their housing from rental apartments

to purchased condominiums or single-

family homes. A dozen condominium

towers sprouting in or near downtown

Edmonton show the process at work.

Housing prices across the city grew by a

healthy 5.3 per cent in 2012, while new

home starts were up 14.2 per cent over

the previous year.

Edmonton has the foundation of

a strong economy in place: growing

employment, low CPI inflation, falling

office vacancy rates and retail sales that

continue to surge ahead of those in the

rest of Canada.

It’s also a great place to live.

Edmonton was the third-ranked city in

the world for quality of life in the global

Numbeo index, which weighs factors

such as cost of living, health care, traffic,

crime, the environment and housing.

To finish behind only Berlin and Zurich

– and ahead of such renowned

lifestyle cities as Vancouver, Sydney,

Copenhagen and San Francisco

– is for Edmontonians an honour,

though not necessarily a surprise.

Looking ahead, Edmonton and

Alberta can expect sustained growth of

3.2 per cent annually over the next 10

years, according to CIBC World Markets.

That’s a full percentage point a year

ahead of what the bank predicts for the

rest of Canada.

Alberta and Canada remain a good

place to invest and a stable source for

natural resources, as evidenced by the

purchase of Nexen last year by the China

National Offshore Oil Company. In spite

of the much talked about “bitumen

bubble,” the long-term development of

oil and gas assets in northern Alberta

continues. If approval is eventually

secured for the Keystone XL, Northern

Gateway and other pipelines, these

should provide added momentum for

further development.

Economic fundamentals support continued growth in Edmonton and northern Alberta

A robust 56,000 jobs were created in the city in 2011 and 2012. In the biggest in-migration seen since the early 1980s, Alberta reached a

pace of 10,000 new residents a month in 2012.

O


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rad Ferguson was a seven-year-

old boy in the mid-1970s when

his father came home from work

one day to announce that he had quit

an accounting job to start his own real

estate company.

In a heartfelt debut speech to

the city’s business community as

the president and CEO of Edmonton

Economic Development Corporation,

Ferguson remembered how his family’s

fortunes rose and fell with the heady

booms and crashing busts of the Alberta

business cycles in the 1980s. In the

mid-1990s Ferguson, by then a young

consultant, saw his city dust itself off and

begin to grow once again.

Then in 2008, the economic world

got ugly. Banks collapsed, the stock

market crashed, global trade froze and

the price of oil plummeted from $140 to

$40. But something strange happened

in 2008: the global crisis had surprisingly

little effect on Edmonton.

“Over the past five years as the world

was in disarray, searching for security

and stability, we’ve learned something

about ourselves,” Ferguson told an EEDC

luncheon audience in mid-January 2013.

In the years following 2008, Edmonton

had a milder downturn, net positive

migration and employment growth as

the city experienced one of the strongest

economic rebounds in the Western

world.

“We learned that our economy is

more diversified than once believed,

our standard of living more resilient

than others’, and our quality of life is

more attractive than we give ourselves

credit for.”

As the son of an Alberta entrepreneur,

and a successful businessman himself,

Ferguson understands the importance

of smoothing out erratic economic

cycles. Being less dependent on its

largest industry is a big step forward: In

2012, oil and gas accounted for 27.6 per

cent of provincial GDP, down from 36.1

per cent in 1985.

“What we’re seeing is a trend: the

amplitude of Edmonton’s economy is

getting smaller. Less boom, less bust,

and that creates a much more resilient

economy over time,” he said in an

interview a month after the luncheon.

“We’ve started to diversify the

economy. We’ve become more of a

manufacturing-based economy versus

an oil and gas exploration economy. As a

result, we’ve started to outperform other

jurisdictions through those booms and

busts.”

A visitor who last saw Downtown

Edmonton in 2007 who returned today

would notice a revitalizing downtown

with new condo towers, the new EPCOR

headquarters, a rebuilt Art Gallery of

Alberta and the beginnings of a new

provincial museum. Visitors also might

see the renovated Federal Building,

the upgrades on 108th Street, the

Jasper Avenue rebuild, the growing

MacEwan campus, the expansion of

Norquest College, a new arena district,

and many other ongoing projects. All

these are evidence of continuing public

and private investment in Edmonton

The new Edmonton: Less boom, less bust

City’s new resilience served it well during post-2008 struggles, says new CEO of

Edmonton Economic Development Corporation

B


while many cities in North America are

struggling just to keep the lights on.

“We have a tremendous amount of

activity for the next five to eight years

in front of us that will advance the

downtown core one more step,” says

Ferguson. “What is missing and what

we want to focus on is how to double

residential density in the downtown core

from about 13,000 today up to 26,000

over the next seven to eight years.

“If you can double residential

capacity, now you’ve got a tremendous

amount of personal equity in the

downtown core. People start to care

about their streets, build vibrant street-

corner shops. It’s the next wave in front

of us that’s going to be truly exciting.”

Last August, as Ferguson settled

into his office a few floors above street

level in the World Trade Centre on Jasper

Avenue, the Alberta economy was

slipping into one of those periods that

test its new resilience.

Abundant new sources of shale

oil and gas, difficulties in obtaining

approvals for export pipelines and a

gaping differential between the price

of Alberta oil and the world price – the

so-called “bitumen bubble” – were

beginning to undermine Alberta’s usual

self-confidence. By mid-winter, some

Albertans showed signs of developing a

bad case of nerves – one that Ferguson

sees as overblown.

“The nervousness on the price

differential is felt pretty much at the

provincial government level. The

industry itself is still relatively strong,”

Ferguson said in February.

“We’ve seen industry take their foot

off the gas, it’s not on the brake yet, but

it’s not on the gas any more. There’s some

concern.

“We’ve had three months in a row

where manufacturing numbers are

down. We have the situation where

petrochemicals and coal are down. The

fundamentals of our metal fabricators

are all down a bit now.

“When you start looking at three

months in a row of data, you start to

see a trend. It gives some people cause

to take their foot off the gas. It’s time to

• AnnualGDPofmorethan$77billion (2007 constant dollars).

• RobustaverageannualGDPgrowth of 3.6% over the past decade, more than double the Canadian average.

• ProjectedGDPgrowthofapprox.2.5% over the next 5 years.

• TheNorthSaskatchewanRivervalley, the longest stretch of urban parkland in North America, has over 150km of trails designated for biking, jogging, and cross-country skiing.



start to look at your balance sheet. At a

personal and a professional level.

“Those are smart things for a

business owner to do at any time.”

On his own professional balance

sheet, Ferguson’s assets include a

blue chip resume. He worked in his

father’s real estate business while he

earned a degree in economics from

the U of A, then got a job in marketing

with Procter & Gamble. He moved to

PricewaterhouseCoopers, then left to

start a consulting company, Strategy

Summit, which he ran for 14 years before

selling it to PwC. He sits on the boards

of Startup Edmonton, the Edmonton

Symphony and Winspear Centre, and

he’s a hockey dad. He also is connected

with Alberta’s Conservative party, having

managed the leadership bid of Finance

Minister Doug Horner.

Born in 1969, Ferguson

is too young to be a Baby

Boomer but too old to

belong to Generation X.

Instead, he belongs to a

group that has no label. So

how does that make him

different from those who preceded him?

“Being 44, I’ve grown up with the

builders of Edmonton. The Sandy

Mactaggarts of the world, the Allards,

the Olsons. You learn to respect those

great families and hold them in high

esteem,” he says.

At the same time, Ferguson’s is

much more data-driven than previous

generations.

“I am personally very technologically

enabled. I can speak the language of

the start-up crews with two guys in a

garage with a computer. To bridge those

generations, something I value is the

ability to talk both of those languages.”

Ferguson sees part of his role at

EEDC as using this ability to help build

bridges between generations that have

capital to invest with those who have

the tools and vision to move Edmonton’s

entrepreneurial culture forward. He

prides himself with his skill at bringing

people to the table.

“The fun I had at Strategy Summit

was working with that breadth of client,

and also the public sector and private

sector, being able to talk both those

languages, to connect the public with

the private, and vice versa, that’s a very

healthy skill set. That bridge-building is

an attribute that I’m valuing here every

day.”

In his current role at EEDC, Ferguson

oversees a portfolio of businesses for

the city-owned corporation, including

Economic Development, the Shaw

Conference Centre, Edmonton Tourism

and the Edmonton Research Park. Not

surprising, then, he sees a future built

on diversification and

innovation – which he

defines more broadly than

the traditional emphasis on

R&D and the hunt for new

wonder drugs or electronic

gadgets.

“Biotechnology, nano-

technology, genomics, all those kinds of

things, they’re important, don’t get me

wrong,” he says. “But our concept and

our definition of diversification probably

needs to change.

“Diversifying where your revenue

Diversifying where your revenue comes from is probably the most important

ingredient to a successful diversification strategy.


comes from is probably the most

important ingredient to a successful

diversification strategy. It’s not

necessarily moving into a brand new

industry. You can diversify by market,

you can diversify by industry, you can

diversify by product.”

A case-study-worthy example of

that diversification by market can be

found in Edmonton-based PCL Con-

struction. When it found its order book

thinning in Alberta in the 1980s, PCL

set its sights farther afield to become

a major player in the United States as

well as the largest contractor in Canada.

It’s an example Ferguson knows well

– PCL was a client when Ferguson was

a young consultant with PwC. “They

probably taught me more than I taught

them,” he admits.

Those lessons still apply.

“A lot of the diversification that’s ap-

propriate for Edmonton-based firms is

around broadening their markets,” Fer-

guson says. “For example, we have very

few firms that are serving markets out-

side Edmonton and northern Alberta,

when there are some real interesting

growth areas in northern Canada.”

However, he cautions that to be

successful in the larger world, Edmonton

businesses need to focus on their

competitiveness.

“We’ve been in an environment

where the rising tide floated all

boats, made people quite healthy.

It’s time for our business owners to

be much more focused on growing

their margins, investing for the long

term in new technologies so that we

can reverse some productivity trends

we’re seeing in Alberta and across the

country.”

Ferguson briskly sets out his

data. Canada’s productivity is very

low compared to other G-20 nations.

Edmonton and Alberta may have the

highest labour productivity in the

country, but others are gaining quickly.

What the situation calls for, he believes, is

increased risk-taking by business owners

in the form of investment in technology,

innovations and equipment.

“We’ll never solve the labour

problem. It’s not just an Edmonton and

a northern Alberta problem, it’s a global

problem. In the Western countries we

don’t have the population growth; the

birth rates aren’t there.

“We need to continue to be

aggressive in our attraction of labour

internationally, but we can’t just keep

throwing labour at the problem.

We need to go back to investing in

technology, equipment, research — in

innovation that isn’t labour-driven.

“For example in manufacturing,

the whole area of artificial

intelligence and robotics, and

computing, and you combine those

together to really think through

revolution in the manufacturing

sector.”

So how do you make a boom-

and-bust economy more stable? Be

confident, take smart risks and the future

will be even better than the present. It’s

a positive message from the new man

at the intersection between the city’s

business community and its political

leadership.

“I’m really proud of the team here

and what we’ve been able to accomplish.

I like where we are and I like where

we’re pointed. We do have a long way to

go, but we’ve made significant changes

to our approach, our openness for

business.

“We’re on our way.”


“May you live in interesting times.”

o live and work in interesting times

doesn’t have to be a curse. It can

be a blessing to savour and enjoy.

That is the attitude of Simon Farbrother,

who as Edmonton’s City Manager is the

highest-ranking non-elected employee

of the city and its CEO in charge of more

than 10,000 fulltime employees.

“Edmonton is investing time, energy

and passion in terms of building,” says

Farbrother, now in his fourth year on the

job.

“Whether it’s LRT, whether it’s rec

centres, whether it’s libraries, whether

it’s emergency service support, it’s all

happening. But on top of that layer,

you’ve got projects like the airport

redevelopment, LRT expansion, the

arena project and a number of others.”

And let’s not forget the day-to-day

challenges of keeping the lights on, the

streets clean, plugging potholes and

disposing of the waste produced by

roughly 825,000 people.

“So it’s an interesting time to be in

Edmonton right now.”

Since Day One on the job,

Farbrother’s attention has been glued

to negotiations surrounding the Oilers’

new arena. But after as many plot twists

as three seasons of Downton Abbey,

that drama appeared to be ending after

Mayor Stephen Mandel proclaimed it a

“done deal” in January.

“Well, as much as a done deal is a

done deal,” Farbrother added several

weeks later. “We’re just completing up

the various legal agreements around it.”

When all is said and done, the state-

of-the-art arena and associated public

investment will provide a $600 million

boost to downtown. That will include the

arena, a winter garden, land purchases

and an LRT link to be jointly financed

by the city, senior governments, the

Katz Group and a ticket surcharge. In

addition, the Katz Group and WAM

Developments wanted to begin work

simultaneously on a series of projects

around the arena: hotel, office space

and residential high-rises.

“It’s probably potentially another

billion dollars on top of the arena in

terms of the associated development

that the Katz group is looking at,”

Farbrother says. If all goes according to

the current plan, the Edmonton Oilers

will be in their new home in 2016.

“With the new arena, the business

community in the city core can literally

walk over to the arena. It’ll be on the LRT

line, it’ll stimulate plaza development,

so there’s a whole bunch of economic

activity before a game and after a game

that you don’t see too much of at Rexall

Place right now,” Farbrother says.

He adds that the project also offers

Edmonton the chance to make a splash

and take Downtown to a higher level. It

also will be good for hockey, he adds,

by providing long-term sustainability

for the NHL presence in the city. “That’s

important in a Canadian context.

Edmonton’s mid-market team will have

the ability to be competitive in the NHL.”

Transitanddevelopment

While all this is going on Downtown,

the city is also pushing forward on a

potentially larger transformation with

the expansion of the city’s light rail

transit network.

Since the Century Park extension

opened in April 2010, construction of

the new LRT line to the Northern Alberta

Institute for Technology has progressed

rapidly, with the ribbon-cutting

ceremony expected in the spring of

2014.

Though only 3.3 kilometres long,

the new line will bring tens of thousands

of new commuters into the system,

including the student populations

Interesting times for a city in growth mode

Simon Farbrother looks ahead after four years as CEO of a city

T


of NAIT, Norquest College and MacEwan

University, plus employees of Royal Alexandra

General Hospital. Ultimately, the line could

push northward to St. Albert.

And there’s more. A new LRT from Mill

Woods through Downtown to Lewis Estates

represents a whole new operating model for

Edmonton Transit. Based on European-style,

low-floor trains running at street level, the

southeast to west LRT will be more street-

friendly and convenient to use. Design work

is well advanced for Phase One, which will

be built to the southeast from the city core.

Construction of the whole network as it is

envisioned today will probably extend into

the 2030s.

An upgraded LRT system will do more

than carry commuters back and forth from

school or work. It also promises to transform

the way the city grows. The station at

NAIT makes possible the transit-oriented

residential development of Blatchford, which

Farbrother describes as a “world-leading

subdivision for around 30,000 people.”

Preliminary work at the former municipal

airport site was to begin in the summer

of 2013. “Blatchford continues to move

forward with more detailed design at this

point,” Farbrother reports. “A zero-emissions

community remains part of those plans.”

While building model communities

of the future is exciting stuff, the city also

has a responsibility to keep its mature

neighbourhoods from crumbling. It is

continuing a six-year-old program of investing

$100 million a year in comprehensive

neighbourhood revitalization – rebuilding

everything from streets and sidewalks right

down to the plumbing infrastructure.

“This is a conscious strategy to reinvest

in our neighbourhoods,” Farbrother says. “It

provides the ability for the city to renew itself

in the long term, as opposed to suddenly 50

or 60 years from now facing a major problem.”

Meanwhile, the city also plans to

consolidate its own operations. In 2012 it

received 15 expressions of interest for leasing

350,000 square feet of office space to relocate

staff currently housed in a dozen buildings

around town.

“We’re looking at reducing our physical

footprint in terms of our existing number

of employees by about 25 per cent through

efficiencies,” Farbrother says. “But at the same

time, it also gives us long-term potential for

growth and so the options are out there.

It will actually, ultimately save us some

money.”

The city is moving on to the next phase of

soliciting formal bids from developers.

“Part of it is not just the city acquiring

350,000 square feet of leasable space. It’s

about a project that acts as a catalyst. We’re

seeing submissions that do that. There’s some

real creativity out there in terms of what

people are bringing forward. We’re absolutely

looking for spinoff impacts of this office

space. We think we’re going to get some very

good submissions around it.”

In addition to all the big upgrades still

to come, there are works in progress – the

new provincial museum, the Jasper Avenue

upgrade, the ongoing consolidation of

MacEwan, the renaissance of the Downtown

East Side. And there’s the satisfaction of finally

getting it done: new apartment towers,

renovated Federal Building and 108th Street

upgrade, sleek trains full of people and the

smooth flow of traffic through and around

the city.

For Farbrother, the past three years have

flown by. “It’s been a great time. There’s a lot

going on in Edmonton.”

Interesting times.


Retail Survey

he story of retailing in

Edmonton continues to

be one of huge consumer

demand driving rapid expansion – a

conspicuous consumption, if you like,

that has attracted wide notice from

the United States and beyond.

Retail sales in Edmonton are

predicted by the Conference Board of

Canada to grow by only 6.1 per cent

in 2013. Only 6.1 per cent? Well, it is a

bit wimpy when you compare it to the

two previous years’ retail growth rates

of 7.5 and 9.9 per cent.

As it closed in on the 4 million

mark in population, Alberta led

Canada in per capita retail sales in

2012. And according to TD Economics,

it is expected to hold its lead for at

least two more years through 2014.

Strong employment growth, housing

sales and migration to the province

all support this long winning streak in

retail sales.

As a result, several trends

are expected to continue in the

Edmonton retail real estate market

through 2013-14:

• Low vacancy rates are likely to

persist. Across all retail formats,

vacancies in the city were 2.6 per

cent at the end of 2012. Vacancies

were lowest in power centres (0.5

per cent) and super shopping

centres such as West Edmonton,

Southgate and City Centre malls

(1.5 per cent).

• Another 1.1 million square

feet were added to Edmonton,

Sherwood Park and St. Albert in

2012, for a total of 30.4 million

square feet, at average lease rates

of $28.34 per square. Another

400,000 square feet were under

construction.

• More mega-retailers from south

of the border will arrive in 2013,

aggressively led by Target

launching into the region with

six locations. And let’s not forget

Walmart, which recently added

four stores to the Edmonton

region and has two more planned

for 2013-14.

• It isn’t only discount names that

are crossing the border in search

of a compelling growth story –

the legendary New York jeweller

Region’s conspicuous consumers attract attention from retailers south of the border and beyond

T


Edmonton – Personal Disposable Income (Per Capita) and Total Retail Sales$60,000

$55,000

$50,000

$45,000

$40,000

$0

Average Personal Disposable Income per Capita ($) Average Total Retail Sales ($ Billions)

$30

$28

$26

$24

$22

$20

Inco

me

per C

apita

($)

Aver

age

Reta

il Sa

les

($ M

illio

ns)

2010 2011 2012 2013* 2014* 2015* 2016* 2017*

* Forecast. Source: Conference Board of Canada.

Tiffany & Co. plans to open a 3,000

square foot store in West Edmonton

Mall before Christmas.

• Clothing retailer Simons is making

its first move out of Montreal with

a 10,000 square foot flagship store

in the northwest corner of West

Edmonton Mall.

• Supermarkets and financial

institutions with an existing presence

across the region continue to look for

locations in new neighbourhoods

as the city expands outwards: both

in new communities in Edmonton

and regional municipalities such as

Sherwood Park, Spruce Grove and

Leduc.

• The entertainment business is in a

similar building-out phase. Cineplex

Odeon opened a high-end, new-

format theatre at the Currents of

Windermere in 2012; it plans two

more locations in 2014-15.

Retailing in the Alberta capital has

benefited from population growth

associated with resource development

up north. The regional population was

estimated to grow by 44,343 people in

just two years to reach 1,240,460 by the

end of 2013.

Using statistics from the

Conference Board of Canada, CBRE

projects per capita disposable income

in Edmonton at $40,724 in mid-2013,

which is 29.4 per cent higher than the

national average of $31,479. It expects

an even wider 41.9 per cent lead in per

capita retail spending, at $19,609 for

Edmontonians versus $13,776 for all

Canadians.

Barring short-term hiccups or

a fundamental change in Alberta’s

economy, the outlook for continued

growth in the retail sector is bullish

indeed.

Facts for the Future:• Edmonton’slocationasthelargesturbancentre

close to the oil sands makes it the manufacturing, transportation, and logistics hub for Alberta’s oil and mining sectors.

• EdmontonInternationalAirportispositionedon

northern global air routes and along major highways,

giving Port Alberta convenient access to North

America and the world via air and road.

• Populationofmorethan1million.Overthepastfive years, Edmonton has been the second fastest growing metropolitan area in Canada.

• Thenewfrontierinenergydevelopmentisthe

resource-rich Canadian North. Edmonton is the

service centre for northern Canadian oil, gas and

mining interests.

2010 2011 2012 2013* 2014* 2015* 2016* 2017*


hile industrial land and buildings

continue to be the hottest sector

in Edmonton’s commercial real estate

universe, a challenger has emerged:

downtown office space.

Since the 1980s only one large-

scale office tower has been built in

Downtown Edmonton, the EPCOR

Tower, which opened in 2012 and is

well on the way to being filled. Far from

leaving behind acres of vacated floors

in other downtown buildings, as some

had feared, the EPCOR Tower merely

began the task of absorbing pent-up

demand for large corporate spaces.

A further bullish signal in 2012 was

that EPCOR’s former home will be fully

leased when it reopens as First & Jasper

after an extensive renovation.

The fact that Edmonton was the

only big city in Canada to register lower

vacancy rates for downtown office

space in the fourth quarter of 2012

supports the view of those who believe

the city’s corporate sector needs more

room to grow. Leasing agents report

having clients in law, engineering and

finance that are bursting at the seams

after more than two decades of solid

economic performance.

In the government market, the City

of Edmonton wants 350,000 square

feet – enough to fill more than half of

Demand for downtown office space kicks into high gear

W

Downtown Survey


$25

$20

$15

$10

$5

$0 4Q 2011 1Q 2012 2Q 2012 3Q 2012 4Q 2012

$ ps

f

DOWNTOWN SUBURBAN

$19.

00

$16.

50 $17.

70

$16.

50

$17.

80

$16.

50

$17.

85

$16.

50

$17.

89

$16.

50

200, 9707 – 110 Street, Edmonton, Alberta [email protected] | 780.425.6600

phharcenv.com

Our Building Environments are changing quickly…

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Asbestos Management Plan, Remediating a Mould impacted area or conducting a BOMA BESt Certification,

PHH ARC will help you get ready for it.

Contact us today to learn how we can assist you effectively manage your properties, mitigate risk and ensure

tenant satisfaction with proper assessments and remediation of identified impacts.

Hazardous Materials Management

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Environmental Site Assessments & Remediation

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Energy Management & Building Sciences

Training

S e r v i c e

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Net Rental Rates

• DowntownEdmontonisahubofnewdevelopment, with close to $5 billion in planned commercial, residential, and government real estate projects between now and the end of 2017.

• Edmonton’sInternationalAirportisthefastest growing major airport in Canada, offering non-stop daily service to 10 key US destinations and London’s Heathrow Airport.

• TheEdmontonarea’smedianfamilyincome was over $87,000 in 2010, one of the highest among major Canadian cities.


Source: Colliers International

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