When word started swirling in Vancouver last week that the Bosa Waterfront Centre office tower had sold in three days at prices topping $2,000 per square foot, the news was greeted with incredulity.
“I simply don’t believe it,” said Ozzie Jurock, a noted Vancouver real estate consultant and investor.
Turns out the original rumours were a bit off, but the facts remain mind-boggling, as confirmed by Bosa Development executive vice-president Richard Weir.
Even Bosa executives were among the doubters when the Class AAA tower was being planned.
“If anyone would have presented this [performance] in the original pro forma, we would have thought they were crazy,” one Bosa executive confided to Business in Vancouver.
The original plan had been to lease the tower out, but then the marketing agency, Magnum Projects, began receiving queries about buying strata space.
Bosa confirmed that half of the 355,000-square-foot, 30-storey tower at 320 Granville sold out with Bosa retaining the top 15 floors for future office leasing. The majority sold in three hectic days during the second week in November, though a few remaining spaces took a couple of extra days to finalize.
Office sizes ranged from 598 square feet to full floors.
Bosa dismissed rumours that most of the space was sold to foreign buyers.
After pulling purchaser data the company confirmed that 95% were local.
One West Vancouver investor bought an entire floor (9,000 square feet). Bosa has confirmed that the office space sold for an average of “just over $2,000 per square foot.” The tower is scheduled to be completed in 2021,
The sky-high prices have stunned Vancouver’s commercial market.
“These prices are record-breaking, even record-shattering,” said Aaron
Ulinder, a senior partner in CBRE commercial real estate. The previous record was $1,300 per square foot but the average strata office space in Vancouver since 2016 has sold for around $700 per square foot.
As is common in office strata, the owner is responsible for finishing the concrete shell of the space, which can cost up to $180 per square foot for Class AAA offices. It is believed the sales success of Bosa Waterfront Centre will have other office developers rewriting their pro forma.
Weir said the Waterfront Centre simply represents unique market value.
“When you have a AAA office building at a prime location directly across from the transit hub for Metro Vancouver, waterfront views, world-class architecture and amenities – the project and demand for it are truly unique in the market,” he said. “You literally will not find another site like it.”
Vancouver’s downtown office vacancy has dropped to 5%, the lowest it has been since 2013 and half what it was at the start of 2016, according to CBRE.