COVID-19 has changed the commercial sector, maybe for good
Ephraim Vecina
The Vancouver Sun
The work-from-home revolution has shifted expectations for the Canadian commercial mortgage space, amid the COVID-19 pandemic forcing governments to implement stringent mobility restrictions.
Real estate activity across the board has ground to a crawl. This has become particularly apparent in long-struggling Alberta, which was already labouring under harsh economic uncertainty even before the coronavirus took hold.
For instance, the office vacancy rate in the Calgary downtown area was at 26.5% as of March 31, according to commercial property firm CBRE. The prevalence of online meetings and virtual transactions is putting the future strength of the market’s commercial sector into question, observers said.
“We expect there to be pressure on rental rates going down as vacancy, both head lease and sublease, is expected to increase,” said Todd Throndson of Avison Young Real Estate Alberta Inc.
Industries, especially those hardest hit by the global outbreak, have wasted no time in adapting to the new normal.
“There’s been a lot of learnings from this working from home, the biggest learning being that it worked a lot better than all of us thought it would work,” said Rob Peabody, chief executive officer with the Calgary-based Husky Energy Inc.
Peabody cited the near-omnipresence of advanced communications technology as a driving force in this shift.
“We’ve had over 95% of our office staff working from home — some days it’s closer to 99% — and that transition was seamless; it actually worked extremely well,” Peabody told BNN Bloomberg. “It’s early days but there’s no question it’s going to change the way we work long term.”
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