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Many factors affected commercial real estate sector in 2018

It was a hectic year for business in Wild Rose Country. Commercial real estate has been part of the strange landscape of what transpired business-wise in Alberta in 2018 -- everything from retail space rentals to open up further contributed to the commercial real estate sector in the province. Since four years ago, when oil prices took a dive, vacancy rates have risen and rents have fallen in both Calgary and Edmonton.

Calgary has been hardest hit with four major office towers in the downtown core still sitting empty. A more than $12 billion drop in combined assessed values of commercial space in Calgary's downtown has created a massive tax gap which has had to be fulfilled by the residential real estate sector, much to the chagrin of homeowners. About $8 million of the tax burden was placed on the shoulders of residential property owners. 

The city is even using some funds in its coffers as enticement to entrepreneurs willing to move their corporate businesses to downtown Calgary. The new stress test placed on buyers by the federal government along with rising interest rates has put a damper on sales in all sectors. They were down 14 per cent in November from the same time in 2017.

When the economy begins to rally, especially the oil sector in Alberta, commercial real estate transactions will reflect the upturn. Until then, deals continue to be made and entrepreneurs continue to weigh risks against possible gains. An experienced real estate lawyer can help a client by providing him or her with legal information that could possibly affect any deals, especially those in which contracts are involved.

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