Vancouver’s Reliance Properties has teamed with Texas-based Hines, one of the world’s largest private real estate developers, to announce a new 32-storey office tower at 1166 West Pender Street in downtown Vancouver.
It will be Hines’ first project in Vancouver, and the partnership is seen as the most notable office activity in Vancouver since the start of the COVID-19 outbreak more than a year ago.
With no pre-leases signed, the building starts on speculation that the current glut of downtown office space will ease during the next three to four years of construction.
The site is Canada Revenue Service’s former Vancouver office. That 140,000-square-foot building will be demolished to make way for the new 361,000-square-foot Class AAA tower.
One of the major focal points of the project, and unique to Vancouver, will be the tower’s top floors. The V-shaped top nine levels will feature private outdoor terraces, and underground parking will prioritize employee wellness with more bike than parking stalls.
“Hines is one of the premier office builders in the world,” said Robert Levine, a partner and office specialist with commercial brokerage Avison Young in Vancouver. “I know Hines has been looking at the Vancouver market for years. I think it is a great testament to Vancouver that they are coming into the city now.”
Hines has 165 developments underway around the world. Its property and asset management portfolio represents more than 246 million square feet, including approximately 13 million square feet in Canada.
“We chose Vancouver because we believe in its world-class economy and future, and this partnership was a natural fit because of Reliance Properties’ commendable track record and our shared values,” said Syl Apps, senior managing director for Hines.
A CBRE official called the announcement “a major boost in confidence.”
“Vancouver’s downtown office market activity has returned to approximately 85% normal, albeit mostly small transactions,” said Blair Quinn, vice-chairman of CBRE’s Vancouver commercial brokerage office.
According to Avison Young, the downtown vacancy rate as of the end of 2020 was 6.6%, up from 4.4% a year earlier, with more than 1.5 million square feet vacant, including about 560,000 square feet of excess space shoved back onto the market as subleases since the pandemic began.