Downtown Calgary assessment values rise in best properties, but appeals likely coming

Calgary's hallmark downtown properties saw significant jumps in assessed value over last year, despite overall high vacancy in the core.

"We've been pulling all the levers but at the end of the day, we're still hovering around the 33 to 34 per cent vacancy rate in the downtown core," said Greg Kwong, regional managing directory for CBRE, a global real estate services company with offices in Calgary.

According to numbers from the City of Calgary, Brookfield Place saw the greatest jump, now assessed at $552.7 million, 21 per cent higher than the previous year.

Bow Tower and Eighth Avenue Place also saw double-digit increases in value.

"The assessed values are pegged at a certain date of time, and that date is July of 2022," Kwong said.

"A lot has changed in the last six to seven months – mainly interest rates have gone up and like anything, when the cost of financing goes up, you can't afford to pay as much as you normally could in the in the previous cycle."

He predicts there will be a lot of property owners appealing their valuations to the city.

"There's going to be some interesting disputes and property owners basically going back and trying to get their properties reassessed to a lower value."

Despite general optimism in the energy sector and a growing number of tech companies moving into the city, the growth is not translating into jobs as strongly as is needed to fill the millions of square feet in the downtown core's empty towers, says Kwong.

City assessor Eddie Lee says despite ongoing vacancy, there is still a lot of movement within offices as some tenants look to upgrade their spaces.

"We see a lot of flight to quality, where tenants are moving from lower-class properties to the flagship AA-class properties and it's really being driven by those higher-quality buildings where we are seeing a decrease in vacancy," Lee said.