Millions of new square footage is set to hit downtown Vancouver’s core, which will quench record low vacancy rates when it comes to office space. Workers rejoice, as living and working in the middle of the city’s bustling metropolis is about to get a lot easier.
The most prominent lease deal to be finalized in 2017 was online shopping giant Amazon taking up 147,000 square feet of space at 402 Dunsmuir Street. Last year marked the third straight year of positive annual absorption recorded in the downtown core according to Avison Young, after peaking in 2015 at 1.1 million square feet. This was the most yearly absorption recorded in downtown since Avison Young started tracking the market in 1996, and intake has remained positive but dropped in each subsequent year.
Avison Young’s 2017 Year-End Office Market Report for Metro Vancouver shows vacancy rates ended 2017 at 7.1%. This was a 30 basis points rise from 6.8% at mid-year due primarily to the addition of 252,000 square feet of vacant office space at The Exchange that came online in the last quarter. While approximately 85,000 square feet of the office space has been pre-leased in the Exchange, the tenants (National Bank, Hyperwallet Systems, Smythe LLP and Sovereign Insurance) will not occupy until next year at the earliest.
More than 2.1 million square feet is set to hit the downtown market by 2021, which includes The Offices at Burrard Place (146,375), 400 West Georgia Street, 725 & 731 Homer Street (353,000) and Vancouver Centre II (368,115). This bodes well for people looking to buy in downtown Vancouver in this market, but also find a place to work within walking distance.
The next downtown development cycle starts in 2020 with 710,000 square feet in three new office towers as well as smaller projects in Gastown and Railtown. This cycle will continue in 2021 with 650,000 square foot of space in three additional downtown towers.
According to the City of Vancouver, the municipality has approved approximately 8.2 million square feet of office space in the downtown core since council adopted the Metropolitan Core Jobs and Economy Land Use Plan in 2009. Live, work, play and own in downtown Vancouver? Sounds like an ever-growing reality for Vancouverites and working professionals.