A new report from PricewaterhouseCoopers and the Urban Land Institute says Calgary’s commercial real estate market could be dealt a blow if the U.S. doesn’t approve the $7-billion Keystone XL pipeline project.

A decision on the 2,700 kilometre energy pipeline has already been pushed back with some speculating it could be delayed until after the 2012 American presidential election.

PwC partner Ian Gunn tells The Calgary Herald commercial real estate in this city depends on the oil and gas sector.

Susan Thompson with Calgary Economic Development points out energy firms occupy 70 per cent of the office space in the core.

Peter Linder with Delta One Capital tells 660News, if Keystone is rejected, there would be a financial impact, but he believes it would be short-lived.

Linder says after the companies and investors involved dust themselves off they would turn their attention to other opportunities.

In terms of Canadian cities to invest in for the coming year, Toronto is on top, followed by Vancouver and Calgary.

Calgary also finished third in the survey in terms of development in 2012.