Office demand in Vancouver stalled

By Tracey Arial

There’s a lot of excitement in the Vancouver market recently, primarily due to three big developments due to open next year. Still, the top expert in the market says there’s now a lull.

When three or four buildings came out of the ground, they got a lot of immediate take-up with pre-leasing so that’s positive, but there’s been a bit of lull in existing clients taking a look at the offering,” says Bart Corbett, Cushman & Wakefield’s top producing tenant representative. Maybe we’ll have to hunker down for the next 24 months.”

The lack of announcements from three other projects now underway backs his assertion. The Credit Swisse project that will incorporate the former Vancouver Stock Exchange building has no committed tenants for now. The Sears building renovation still has lots of space available too. The leasing agent for the CDAE building says they’re talking to a potential anchor tenant, but Corbett doesn’t know who it might be.

Plans for an additional seven buildings close to the downtown core could get underway anytime, but Corbett doesn’t think they will.

There’s lots of new supply potential, but you’ve got to think that those six or seven property owners are going to think long and hard before they commit to buildings unless they can find a pre-lease tenant or an anchor tenant.”

Vancouver’s position as the fourth market for office development in Canada limits its potential, says Corbett. “We’re not known for explosive growth like Calgary. We don’t have the depth of corporate Canada like Toronto, and in some ways Montreal.”

His best hopes come from the tech industry, especially if you count Telus among them.

Telus’s decision to establish Telus Gardens downtown is the most notable of the new developments, he says, especially now that Amazon and Bull Housser & Tupper will also take space in the complex.

Other tech companies may follow their lead.

Facebook has quietly come into market,” says Corbett. “Twitter is looking for space. Microsoft is in our city, and there are rumours that they’re looking for expansion.”

Meanwhile, SNC Lavalin has taken the majority of the 754 Thurlow Building, and McCarthy Tetrault has joined them.

The 1021 West Hastings site is also close to fully-leased, with MNP, CBRE, Atimi and Gencom all ready to move into the building next year.

Note: This article appeared on page 40 of the Spring 2014 issue of Canadian Real Estate Magazine.

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