Looking for tenants
Economic development considers tenant attraction study to keep businesses in the city
Wednesday, Aug 27, 2014 06:00 am
The city’s economic development team is contemplating the creation of a tenant attraction package that would help to attract and retain tenants for commercial and industrial properties in the city.
The package would be similar to the department’s residential attraction strategy, which, among other things, involves the use of social media and targeted marketing to attract people to the community.
“You can drive the demand up through these things and then the supply will take care of itself,” said Guy Boston, executive director with economic development.
The proposed tenant attraction package was briefly discussed during a city council meeting last week.
Boston said his team has considered creating the package in support of those who are currently trying to fill spaces in St. Albert, and those who may be faced with that problem over time.
He added the main issues tenants and landlords face in the city concern disagreements over the leasing price, and a lack of exposure. Otherwise, the city’s vacancy rates seem to be comparable to those of others in the region, he said.
He also stressed that his department is still verifying whether there is a need and demand for this type of study, and how it could help in making the city more attractive to businesses.
“It’s a good opportunity for us to put our minds to what an attraction strategy would look like and bring it to bear whenever we need,” he said.
Low vacancy, need for space
Mike Keating with Colliers International said tenant attraction for commercial or industrial spaces in the city has rarely been a problem for the commercial real estate firm.
Once spaces become available they sell very quickly, especially in the city’s two business parks, he said.
“If we are sitting with something in the range of zero- to two-per-cent vacancy rates then obviously we don’t have a problem in keeping what we have full,” he said.
He said the city should rather focus on creating new spaces to lease out to tenants. The existing business parks are almost full, and the city could use another one but lacks serviceable land to build it on, he said.
He added that St. Albert has a strong focus on residential and some commercial development, but generally has low vacancy rates for industrial development.
But that’s also needed to offset taxes, and to keep people moving here, he said.
“The bottom line is we need more land, more industrial land that is what we call shovel ready, that is serviced and ready to go,” he said. “And we really don’t have any.”
Nonetheless, there is a benefit in having studies done to attract and retain tenants, even if there is no vacancy now, said John Ross, managing director with Avison Young, another commercial real estate firm based out of Edmonton.
Ross said Avison Young has been working closely with the economic development department in Edmonton and their studies have been useful in keeping his clients informed on what’s happening in the city, he said.
“Everything (economic development) can do to try and attract businesses to St. Albert they should do,” he said. “That’s true even in a situation where you may have zero-per-cent vacancy. You should still try to attract business to the city.”
Ross added that his team has not had any trouble finding tenants in the city.
But he also expects that St. Albert will continue to have low vacancy rates for office and industrial spaces, compared to Edmonton or other communities in the region.
“It is still very much a commuter city which is very much why when you look around at the businesses in St. Albert you have way more retailers than you have somewhere else,” he said.