But the report says "Calgary must hope to recuperate from cooled demand and a touch of development binging."

The report reflects interviews with and surveys of more than 875 of the industry's leading real estate experts, including

investors, developers, lenders, brokers and consultants in both Canada and the U.S.

The report says that for next year major Canadian real estate markets will settle in a fair to good investment range

with only modest investment prospects and constrained development potential as Toronto bumps Vancouver from the top

ranking city to invest and develop.

The report says sprawl and overbuilding "temporarily" subdues the outlook in Calgary but "absorption will come."

"Developers retreat in the face of high vacancies and show no appetite for new office projects," says the report.

It says Calgarians put their faith in robust commodity markets and U.S. consumption of oil from the oilsands.

"Expect spreading hot growth to resume in coming years," says the report.

A recent report by CB Richard Ellis Ltd., said the overall vacancy rate in the Calgary downtown office market at the end

of the third quarter of this year was 14.5 per cent, down 120 basis points from the last quarter.

"Construction on Encana's future headquarters, The Bow, is still underway," said the report. "Completion is expected in

the fall of 2011 when Cenovus will move in first with Encana to follow in 2012.

"While the total amount of space to be vacated by Cenovus and Encana will total 1.5 million square feet, this residual

vacancy will likely become available in a series of small waves lasting throughout 2012 as opposed to the tsunami that

was originally anticipated."

There was 424,630 square feet of positive absorption - the change in occupied space - in the third quarter, bringing the

year-to-date total to just over 1.2 million square feet.

Overall in 2011, Emerging Trends respondents expect a reasonable balance in debt market capital availability and an

oversupply of equity capital, the result of non-satiated buyers.

"In Canada, the real estate industry didn't get overleveraged and the markets never suffered any interruption of credit

availability," said Holly Allen, leader of the Real Estate Deals practice for PwC Canada. "Canadian banks benefit from a

combination of institutional risk aversion and relatively stringent government regulation."