Calgary has become more than a ‘one-trick pony’ relying on the oil and gas sector to fuel its economy.
Investment in other sectors including technology is helping drive the city’s economic engine, and by extension its commercial real estate market, industry insiders told attendees at the Oct. 29 Calgary Real Estate Forum.
For example, R. Scott Hutcheson, executive chair of Aspen Properties and chair of Invest Alberta Corp., said Alberta will see a “couple of hundred billion dollars from data centres in the next decade in this province.”
“Alberta is a pretty exciting place to be now,” Hutcheson said, adding there is great infrastructure throughout the province to attract and accommodate data centres.
To that end eStruxture, a major AI and hyperscale-ready data centre platform, announced it is committing over $750 million for the full build-out of CAL-3, Alberta’s largest and most advanced data centre, driven by demand from AI and cloud providers.
Slated to go live in the fall of 2026 in neighbouring Rocky View County, CAL-3 is designed to deliver 90MW of power.
“CAL-3 is a significant, strategic investment, not only for eStruxture but for Alberta’s rapidly evolving digital and AI landscape. This expansion reinforces our commitment to driving the province’s digital economy forward, offering scalable and sustainable infrastructure that meets the growing demands of AI and cloud service providers. Calgary is pivotal to Canada’s tech future . . .” said Todd Coleman, founder, president, and CEO of eStruxture, in a statement when the investment was announced.
Calgary’s new investment story
Hutcheson, who sat on a panel discussion called Why Calgary? The new investment story, said Invest Alberta’s active files in the U.S., Europe and the rest of Canada are doing quite well.
“What we have to offer obviously is the lowest corporate tax rate, low cost of housing and the attitude. People think there’s an attitude that we want you here and we want to grow the province,” he said.
Mike Bonneveld, president of Skyline Industrial REIT, noted the company’s first real foray into Alberta in 2020 was opportunity driven as the REIT shifted its portfolio to a more institutional and modern footing. Skyline likes Calgary’s fundamentals, including in transportation as Calgary has more and more resembled the Chicago of Western Canada.
“Even though they’ve had a very (good) run where rents have gone for the last five years in the industrial sector, it’s still relatively inexpensive compared to some of the other major markets,” Bonneveld said.
Jen Lussier, chief operating officer of Platform Calgary, said over the past three years the tech sector has added $8.1 billion to Calgary’s economy – a 240 per cent increase from the previous three-year period.
“The tech sector has . . . been here for a very long time,” she said. “It’s finally coming into mainstream media but we have had good growth in the last few years.”
She said Alberta topped $1 billion per year in investment in both 2022 and 2023. In the first half of 2024 it was at $383 million, with $346 million of that in Calgary.
Migration to Alberta, and Calgary, remains strong
Greg Kwong, executive vice-president and regional managing director of CBRE, who moderated the Why Calgary discussion, said “we’re pretty bullish on what’s happening here.”
Kwong presented some research from CBRE:
- One negative in Calgary’s economy is its unemployment rate of 7.4 per cent in July, compared to the 6.5 per cent national average;
- Alberta is on pace for another year of record net migration with Ontario and B.C. accounting for the majority of the influx; 21 per cent of net migration has come from interprovincial migration in the past 2.5 years. Net migration to Alberta was 95,618 at the half-way mark of 2024;
- Calgary is one of the least expensive markets in North America for tech companies. In Calgary, there were 21,557 more jobs created in 2023 than new tech graduates – the second-largest gap in North America;
- although house prices continue to rise in Calgary, composite housing prices are 103 per cent higher in Vancouver and 84 per cent higher in Toronto.
Hutcheson said “it’s a pretty exciting time” in the city with positive absorption back in the office sector.
“So if you’ve got the right kind of product in the office business, we think it’s a pretty exciting time to be in the better asset classes. The top half of the asset class, the top quarter of the asset class, there’s positive absorption in the downtown market,” he said.
“It’s a really good time for investment. The institutional capital is not going to be here. The REIT capital isn’t going to be here. But private equity groups are coming to Calgary and picking up really nice, good income-producing office (assets), high quality. They’re ahead of the cycle a little bit, but it’s starting.”
Lussier said the entrepreneurial spirit in Calgary, as well as the quality of life, are attracting people and businesses.
Tech workforce is growing fast
The CBRE 2024 Scoring Tech Talent Report shows Calgary’s tech workforce grew 7.5 per cent in 2023 compared to a Canadian average of 1.7 per cent. In the past five years, Calgary’s tech workforce increased by 78 per cent.
The next closest market is Ottawa at 50 per cent growth. In fact, Calgary has created more total tech jobs in that period than New York City.
Also, the Alberta Enterprise Corporation 2023 Deal Flow Study shows Alberta increased its overall number of tech companies (2,378) by 157 per cent since 2012. Over 60 per cent are located in Calgary.
The corporation says the objective is to provide an understanding on the strength and make-up of technology deal flow across sectors and regions in Alberta. Deal Flow is the stream of business proposals, pitches and investment offers that venture capital, angel and private equity investors identify and engage with on a daily basis. Strong deal flow is an indicator of a thriving ecosystem, strong economy and healthy capital markets, it explains.
In the 2023 Deal Flow Study, there were 1,490 companies identified for Calgary (62.7 per cent), 687 for Edmonton (28.9 per cent) and 201 for the rest of Alberta (8.5 per cent).
Of the total number of companies, 56.6 per cent were in the Information & Communication Technology sector.
