The year end office data is available from the brokers around the city. Colliers, who track the greatest number of buildings and space, show office vacancy Downtown at 11.4%, an improvement on a year ago, when it was 11.8%. There’s now 33.2 million square feet of office space Downtown.
There’s very little space now under construction there, 156,000 square feet, (after a significant addition of over 3 million square feet of new space in the previous few years). A small amount of office space has been removed from stock for hotel conversion in a few smaller buildings. Unlike in the 1990s, and in many other Canadian office markets, there are no residential conversions proposed.
The Midtown market, (Broadway, Mount Pleasant, False Creek Flats etc.) is the second largest market, with over 12.5 million square feet of space. It has a 10.7% vacancy rate. That’s up from 7.7% a year ago, partly because a net 600,000 square feet of space was added in a year. There’s another one million square feet under construction.
The vacancy rate in Burnaby, with 10.8 million square feet of space, (the largest suburban market) is at 11.4%, up from 6.3% a year ago. 320,000 square feet were added in the past year, and 680,000 square feet are under construction.
In Surrey, which has 6.4 million square feet, vacancy is at 4.4%, down from 5.2% a year earlier, with just 100,000 square feet added in a year, and 397,000 square feet being built.
In Richmond, with 4.4 million square feet, there’s a 9.1% vacancy, 2% higher than a year ago despite no space being added. There’s 307,000 square feet under construction.
All the suburban markets added together (including Burnaby, Richmond and Surrey) have 29.1 million square feet, (so still less than Downtown). They added 500,000 square feet last year, and collectively saw vacancy rise from 5.4% to 7.5%. There’s 2.5 million square feet more being built in those markets.
We’re seeing very few significant office buildings, or uses proposed for now. Instead, office projects are becoming residential, or hotel. Recently office space in Burnaby has switched to hotel, (Highline, and Citizen), and office has switched to residential at Phase 2 of Gilmore Place. Lark Group is switching some of the office space in City Centre 4 in Surrey to hotel. Bosa switched office for hotel on West Broadway, and Strand have dropped office for residential uses on their Malkin rental tower, near St Paul’s. GWL are proposing residential rather than office next to the Main St SkyTrain station. Chard switched office for residential on East Broadway.
Looking forward (and assuming the economy doesn’t take a nosedive, which is obviously possible given recent events) If vacancy rates continue to fall Downtown, there might be a move on one of the approved projects, but that seems much more unlikely in the suburbs, where vacancy rates are rising and there’s no obvious demand in the current market.
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