The 13-storey Offices at Burrard Place tower is not the only major office building underway in downtown Vancouver with no tenants but the speculation does not appear to faze developers.
Reliance Properties broke ground on the 146,000-square-foot building February 14 because, the company says, downtown office space can’t be built fast enough to meet the unprecedented demand.
“Space to meet the growth projections of large companies currently doesn’t exist in Vancouver. This is an era when developers like Reliance can build offices without any prelease agreements,” said Jon Stovell, Reliance president and CEO, after a groundbreaking ceremony on the Burrard Street site. Offices at Burrard Place, aimed at tech tenants, will complete in two years.
Vancouver’s office vacancy is the second tightest in North America at 5.2%, with rents increasing as much as 20% in the past year and still accelerating, according to Colliers International.
“Large companies have an extremely limited number of options. An average tenant in the downtown core looks for approximately 5,000 to 6,000 square feet of office space, but today’s demand is driven by tenants looking for multiple floors, with some needing as much as 150,000 square feet,” said Maury Dubuque, managing director of Colliers Vancouver, which is handling leasing on the new Burrard tower.
Recently, tech giant Amazon leased 147,000 square feet to take all of the space in Oxford Properties’ new nine-storey office tower on Dunsmuir Street that won’t open until late next year.
But, according to a recent office market study by Avison Young, other office developers are ready to pull the trigger despite having “no tenants at this time.”
Those queuing for the next wave of downtown office development include Westbank Corp. and Allied Real Estate Investment Trust with a 24-storey, 353,000-square-foot tower on West Georgia Street; and PCI Group and Greystone Developments that are preparing to build a 25-storey office building on West Hastings by 2020.
‘Uptown Property Group, GWL Realty Advisors and Low Tide Properties together have a total of 563,000 square feet of speculative office space in three towers, all scheduled to open within the next two to three years.
Bosa Development’s 30-floor Waterfront Centre won’t complete until 2021 at the north end of Granville Street, but half its 355,000 square feet of office space has already been sold at a record-snapping $2,000 per square foot.
