NNSL (JAN 08/97) - "Office space for rent" has become a common sign in Yellowknife.

In fact, the amount of commercial space available city-wide has reached its highest rate ever, say a number of commercial real estate business people.

"I would say there's close to a 15-per-cent vacancy rate in office space in Yellowknife," said Kelly Hayden, general manager with Bellanca Developments Ltd.

"That's about 120,000 square feet of office space and probably the highest it's ever been in Yellowknife."

Ter Hamer, with Polar Panda's Developments Ltd., agreed.

"The space available is quite significant, above average," he said. "All the companies in the business have space available and all companies have reduced rents."

A number of factors have led to the open spaces.

"There's just no development happening in Yellowknife," said Craig Shenher, assistant property manager with Raven Resources Ltd. "It's on hold."

Hayden added: "It's a combination of both federal and territorial governments downsizing and some of the buildings becoming obsolete." "There's also been a number of new buildings come on-stream and the older buildings haven't been taken off the market."

While expansion of the market is a given, Hamer believes it may have boomed too quickly.

In the last few years the amount of retail space had tripled, he said. "The problems have been created by people's expectations being too high."

When the trend will reverse itself remains an unknown.

"The light at the end of the tunnel is there, but when it'll shine we're not sure," Hamer said. "And those who paid the price will hopefully benefit from the upturn.

"The uncertainty in government extends to us as well."

Hayden said it will likely take about two years to see the market turn around.

"Along with the downsizing, people are waiting until they know something for certain," Shenher said, adding the commercial situation is similar to residential vacancies. "When they do, that space will be picked up."

Office space under 2,000 square feet is one busy spot, however, he added.

"I'm getting a lot of calls from people looking for 1,200, 1,300 square feet," Hayden said.

Shenher said some business people are using the high vacancy rates to move their offices.

"Some people are upgrading," he said. "People are moving from the lesser space to a nicer space because they're likely getting the same price. But the amount of space available isn't changing."