Vancouver office sector is already predicted for a smooth rebound
As counterintuitive as it may sound, not only does Vancouver, at 6.2%, have the lowest office vacancy rate of any major North American city, but demand has been even stronger than it. was not before the COVID-19 pandemic.
While traditionally more of a branch than a head office, Vancouver has seen major expansions in the years leading up to 2020, including Amazon and Microsoft, as well as the growth of other US and Canadian companies. The city’s tech sector, in particular, has grown tremendously thanks to its exceptional talent pool and the quality of life that Vancouver is generally known for.
âBritish Columbia and Vancouver have performed very well compared to many other jurisdictions over the past few years, and while certainly in 2020, like everywhere else in the world, we have seen a huge slowdown in office space. , as soon as we drove in January of this year, we saw demand increase again, âDan Jordan, a broker at Colliers in Vancouver, told STOREYS. âBy the summer of 2021, we were back to pre-pandemic levels. Demand is a precursor for deals to go through, and we see big deals with more on the horizon.
Although Jordan did not give names, he says more and more prominent US players are considering either entering the Vancouver market or expanding their existing footprint.
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In addition to technology companies, Vancouver’s large professional services sector is also growing. Jordan says he’s never been so busy with law firm clients than he has been in the past two years, and he expects demand to increase in 2022.
âThey hire a lot of lawyers and staff, and they want to go with the hybrid work model, but if they had everyone in the office, there wouldn’t be enough offices,â Jordan said. âIt’s only been this quarter; We expect 2022 to be exceptionally busy in the Vancouver office market. We’ve seen demand increase this year and that’s translated into deals this summer, and we’ve since seen demand grow even more. In fact, we have seen vacancies decline in our market from Q2 to Q3, and this is the first time they have declined in the past 18 months. Many companies are planning to return to the office in the first quarter of next year – many were planning to do so this fall, but that was pushed back with the fourth wave of COVID, however, they are planning a return in the first quarter. 2022. “
One sign that could be the case is that many companies have withdrawn their offices from the sublet market, which means the curtains could be closing on full-time remote working arrangements.
Vancouver’s commercial real estate market is so robust, in fact, that in mid-2020, just months after the start of the pandemic, developer Wesbild decided to move forward with industrial and office development. mixed use called Marine Landing. While the city’s white-heated industrial market is undoubtedly the keystone of the project, the office units are not just a stake, says Brennan Finley, Director of Development at Wesbild. However, Wesbild decided to target office tenants who would buy units in strata.
One way to make it easier to buy strata units is to reduce the square footage, Finley added, although he concedes that the strata office model has so far been largely unproven and , therefore, the benefits of building equity through non-residential real estate ownership were paramount to convey.
âPart of that was a lot of education, which we did as part of our marketing and sales program, but because of COVID a lot of offices and industrial spaces are using a model of hybrid work, so they don’t need as much space as they do. previously necessary, âhe said. “A previous lease was 10,000 square feet and now it’s around 6,000, which makes the strata model more accessible.”
Marine Landing, a development consisting of two six-story buildings near a SkyTrain station, launched for sale to the public two months ago and, perhaps unlike typical commercial developments, included incentives.
âWe have taken a firm stance on providing facilities: there is a rooftop patio, pÃ©tanque ball, barbecue, communal lounge chair and bookable meeting rooms, so it all helped offer buyers a big amenity package which is especially important when you go there to buy. It’s like buying a condo – you want to see this set of amenities, so it was a similar idea.
Neil covered real estate for several years as a Toronto-based reporter. Prior to joining STOREYS, he was a regular contributor to the Toronto Star, Toronto Sun, National Post, Vice, Canadian Real Estate Wealth and several other publications. Do you have a real estate history? Email him at [emailÂ protected]
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