Downtown vacancy rate on the rise in Saskatoon, report finds

Saskatoon’s downtown office space vacancy has been increasing over the past several months, according to a new report.

The vacancy rate has increased to about 24 per cent in the second quarter of 2023, up from 21 per cent in quarter one, according to a Cushman and Wakefield commercial real estate report.

“A lot of that vacancy came up as a result of the two new towers at River Landing,” Cushman and Wakefield research manager Duncan Mayer told CTV News.

“So our vacancy rate was sitting around 11 per cent prior to the East Tower and Nutrien Tower going up, which added 13 per cent vacancy,” he said.

Mayer said many businesses were also looking for more modern space.

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“A trend that's been ongoing or prevalent in the Saskatoon market has been a flight to quality. Tenants are demanding newer space with better amenities and are willing to pay the additional rent that goes with those new facilities.”

One of the biggest losses to the downtown area has been medical offices.

“One thing that was sort of unforeseen was medical offices transitioning out of the downtown,” Mayer said.

“The reason for that, as listed in the report, is access to parking. The rental rates are comparable to newer facilities outside of the downtown.”

Mayer said medical businesses also had better opportunities for synergy outside of downtown.

“They would have access to pharmacies, are closer to grocery stores, are closer to where people live,” he said.

“I don't see medical office returning to the downtown unless there was a significant influx of additional care facilities or something like that within the downtown.”