An oilfield company is pulling out of Red Deer to consolidate its operations in northern Alberta.
Texas-based BJ Services confirmed Thursday it is closing its shops in Edgar Industrial Park as of Sunday.
“The oil and gas market in Canada has been challenged throughout 2019, and operators have concentrated their activity in the Montney and Duvernay basins of northern Alberta,” said BJ Services president Warren Zemlak in a statement. “To best serve our clients in these areas, BJ has made the decision to consolidate its Canadian operations to our Clairmont location. The company is transferring all operations and operations support roles from Red Deer to Clairmont.”
The number of workers affected was not released by the company.
Company external affairs manager Michelle Gray said operations and operations support staff — who comprise the majority of Red Deer employees — have the option of relocating to Clairmont, a hamlet eight kilometres north of Grande Prairie.
Zemlak said future plans for the Red Deer facility have not been determined, and the company will continue to evaluate market conditions.
Brett Salomons, a partner with Salomons Commercial, said Red Deer’s industrial sales and leasing market has been doing well and a buyer will likely be found for the BJ Services site.
“It hasn’t been a bad year. We’ve actually had three consecutive quarters of positive absorption,” he said, adding that amounted to 170,000 square feet of space.
“We’re now under a 10 per cent vacancy rate.
“Industrial has been the one shining light in Red Deer this year, as opposed to retail and office, which has seen vacancy rates creep up each quarter.”
Some of the growing interest in industrial space has been spurred by dropping lease rates and sale prices, said Salomons.
“That’s created opportunities for others,” he said. “You have leases turn over and you see some tenants taking advantage of a depressed market by getting a better facility for the same rent, or upgrading, or growing a little bit — whatever the scenario is.”
Properties that are proving harder to occupy are smaller tenant bay spaces in the 2,000- to 4,000-square-foot range, he said.
The former Finning Canada Centre of Excellence, which was closed in early 2017, is another tougher sell.
The facility, which prepared, customized and overhauled machinery, was opened in 2008 after the company bought Collicutt Energy Services Ltd. and its facilities.
Salomons said as a large manufacturing complex, the Finning site is not typical for Red Deer.
“It’s a huge outlier for Red Deer. Trying to find a suitable user is difficult,” he said. “If that building was in Edmonton, it would probably be gone by now.
“But BJ’s buildings are a quintessential facility for Red Deer, where it’s an oilfield services shop and there are a lot of other businesses in Red Deer that can utilize those facilities.”