2020 vision for 2022: Vancouver office vacancy rate to rise with shift to homework

Cities expected to adopt innovations to increase home-office viability

michael geller
Developer Michael Geller is a consultant for Lumon – a system of enclosing balconies with foldable glass panels | Chung Chow

Part of a BIV series on what B.C.'s post-pandemic business landscape is expected to look like in two years.

It’s 2022, and in Vancouver’s central business district, there are far fewer people milling around than there had been before the COVID-19 pandemic descended in March 2020.

Many employees are working at home by choice, as employers have embraced the shift to remote workforces. Productivity has tended to remain constant and some businesses have been keen to reap savings by having smaller office footprints.

This summer, meanwhile, real estate services giant NAI Commercial estimates that between 5% and 20% of workers at downtown Vancouver office towers are regularly at their offices.

Employees are expected to return to offices in subsequent quarters, but employers leasing less space could raise vacancy rates in those buildings.

“In 2022, we have new inventory that will be available, and downtown [Vancouver] will have an inventory of around 27,800,000 square feet, versus the current 26,250,000 square feet,” said Rob DesBrisay, NAI Commercial’s managing partner in leasing and investment sales.

“The new product alone will increase vacancy slightly, but all within reasonable levels.”

He predicts that a natural level for downtown Vancouver office vacancy is around 8%, up from 3.6% before the pandemic took hold.

While DesBrisay said he thinks that the number of office workers based at home reached its peak in mid-2020, he added that, by 2022, most workers will have returned to the office.

“Everyone for years has predicted that office space would become less and less necessary because of technology,” he said. “Human nature seems to prevail, with many people needing the separation of home and work and the community that an office environment provides.”

The rise in the numbers of people who work at home has prompted the City of Vancouver to become more accommodating to developers that want to tailor new homes to appeal to home-based employees.

By 2022, new concepts for new residential towers include business centres, where previously a swimming pool or a sauna might have been planned. Facilities tend to include a boardroom for residents to rent, and accessories such as a colour printer, which accepts contactless payments.

“In recent years, we’ve seen far fewer developers putting in swimming pools, hot tubs and saunas,” said developer and consultant Michael Geller. “I predict that a popular amenity is now going to be a business centre.”

He called the City of Vancouver’s willingness to allow small windowless interior rooms in three-bedroom units within projects that qualify under its Moderate Income Rental Housing Pilot Project (MIRHPP), the “thin edge of the wedge.”

That program includes the recently approved 28-storey project at the corner of West Broadway and Birch Street, where such windowless, or "in-board" bedrooms are set to be in some units.

In 2021, and into 2022, the city’s willingness to accept condominium designs with those in-board bedrooms will increase, Geller predicted.

Indeed, the city sent BIV a statement this month, saying that “as a city, we are always evolving our policies, plans and regulations to respond to the desires of our residents and changing needs of the industry to meet new market demands.”

City restrictions on larger balconies and on enclosing balconies have also loosened.

In 2020, there was a hodgepodge of rules, with some city zones stipulating that balconies could only be 8% of the total suite floor space, while other zones allowing balconies to be 12% of suites’ total floor areas. 

Geller is making a series of presentations to Metro Vancouver cities this year, urging them to follow the lead of Abbotsford and Langley Township in allowing developers to build condominiums with temporary balcony-enclosure systems – without that enclosure being considered an exterior wall that would count as part of a unit’s floor-space ratio.

Geller said the change would also enable strata corporations to authorize Lumon’s proprietary system of folding glass that can temporarily enclose balconies. He equates the system to one that can remove the roof of a convertible vehicle in nice weather.

Lumon's system can make patio space usable year-round, and enable residents to convert patios into home offices, he said.

“Working from home has suddenly become so institutionalized that it has its own acronym,” Geller said. “I’m starting to read literature that just says ‘WFH.’” •