this sounds promising..
Vancouver's struggles over building new office space downtown
http://communities.canada.com/vancouvers...-building-new-office-space-downtown.aspx
It set off a small bomb in town two weeks ago when I wrote the story saying that the Aquilini group's plans to build an office tower next to GM Place had been put on hold indefinitely. President David Negrin told me it was because they couldn't get anyone to commit to pre-leasing at rates that would cover the cost of construction. The most people were willing to pay there was $30-32 a square foot
I had more than one e-mail after that from people suggesting that Aquilini's people were acting too much like residential developers, who are used to the financial security of condo pre-sales (along with allusions to the fact that Negrin has just come moved over from the World of Condos at Concord Pacific.) They were also anxious that I check around and verify for myself that office space is being built in Vancouver, office lease rates are going up to $40 to $45 a square foot, and the other planned tower is still going ahead.
Here's what I found:
Tony Astles from Bentall confirmed that his company is certainly going ahead with its plans for Bentall 6.
"We're not bailing."
Astles said there's a lot of interest in the building, especially with the Shangri-La nearby that's changing the neighbourhood.
"There are a number of players who want to be downtown." To try to accommodate that, Bentall has moved some people from downtown offices out to Broadway.
But it's a long process for the new building because the company is going through a rezoning to get increased height, in order to make the tower pay. As well, they're watching what's happening with construction costs to decide on the right moment to build. They have two buildings under construction at their Broadway Tech Centre, near Renfrew and "we did see a little more interest from the contractors for those last two buildings."
As well, Bentall has to relocate its existing tenants from the existing building at 745 Thurlow.
Bob Laurie, the ever-opinionated commercial broker who is now withCushman, agreed that the Aquilini site would not lease for the same rates as the CBD. "They were just early, checking out wether the Triple A shortage would induce some people to move there."
That's not happening yet. Laurie thinks that the eastern end of downtown Georgia could become a hot new office zone at some point, especially if buildings like the Bay parkade and the post office are developed with office space. "But it could be five to 10 years."
And here's the view from Trish French, the senior planner who is dealing with the whole office-space issue from the city end.
She said she was disappointed about the Aquilini decision on the tower.
"It's regrettable. We certainly would have looked forward to having a building there. But we don't believe this is a portent of something bad."
But she said the city is not about to change its policies on requiring or zoning for office space in areas like northeast False Creek because of one developer's experience at one point in time.
"From the planning perspective, we're looking at the long-term needs of the city."
That means they are going to hold to their position that there should be a significant amount of office space built into the zoning for northeast False Creek, which could become an attractive commercial area once there is a critical mass of business tenants down there.
French said that planning for office space in Vancouver is different from cities like Calgary or Toronto. There just aren't a lot of large corporations here and not a lot of pre-leasing. Instead, the majority of office space downtown is leased by smaller firms that make shorter time commitments. That makes office-tower development tougher in some ways, but not impossible.
The city is currently seeing almost 700,000 square feet of office space being built in the downtown peninsula, either in smaller buildings or in buildings that have mixed residential and commercial space.
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