The office market in the Mount Pleasant and False Creek Flats area will be getting some much needed supply with 1.7 million square feet of new space forecast over the next four years, according to Avison Young (Canada) Inc.
Demand for offices within the biotech and life sciences sectors is described as “very high” by Robin Buntain, a principal at the commercial real estate services firm.
The area, often dubbed the “innovation district,” has seen growing attention from these industries. AbCellera Biologics Inc. (Nasdaq:ABCL) is building its new headquarters in Mount Pleasant while construction of the new St. Paul’s Hospital and health campus in ongoing in False Creek Flats.
The result is a growing “ecosystem” in the area, said Buntain, who specializes in office leasing, sales and tenant representation.
“All those things draw a lot of users into this area. And from a landlord and developer standpoint, they see the opportunity to take advantage of this growing biotech sector,” he said.
About 47,300 square feet is expected to be delivered in 2023 with the completion in the third quarter of Formwerks Boutique Properties’ Ofiswerks building, located near Alberta Street and West Third Avenue.
There will be two completions that will add 334,007 square feet of space in 2024, increasing to six completions and 867,773 square feet in 2025.
Lab 29 by Low Tide Properties will add 218,000 square feet in 2026, with 261,400 square feet added to the market at an unknown date, according to Avison Young.
“What's unique about biotech and lab science-focused companies is that when they need their office space, they needed it yesterday or two weeks ago,” said Tim Holloway, director of innovation and insights at Avison Young.
BIV has previously reported that startup companies in the life sciences industry are experiencing increased difficulty accessing turnkey wet lab space, which allows them to develop their work through early studies. Without data, companies are unable to attract investors who provide research and development funding.
This means that early life sciences companies are having to put their research and development on hold, possibly for years, until new laboratory spaces get built.
As more companies settle in the area, Buntain believes this will offer more resources to early-stage companies looking for space.
“As organizations start to develop and build out infrastructure within these buildings, if they move around, there's going to be some residual value in some of those buildings as companies grow and evolve. This may allow smaller organizations coming out of UBC to be able to move off campus and move into their own facility at a more cost-effective solution,” he said.
The Broadway Subway Project, which will extend the Millennium line from VCC–Clark station to Arbutus Street, is expected to reach completion in 2026. The extension of the SkyTrain as well as new housing developments in the area is turning the “innovation district” into a live-work-play environment, according to Holloway.
He referenced projects like Westbank Corp.’s 25-storey mass timber tower at 2015 Main St. in Mount Pleasant, part of the developer’s Main Alley project. The M4 workspace, which will add 204,800 square feet, is expected to be delivered in 2024 and is part of this project.
“This district keeps growing and growing, and you not only have all these creative and brilliant minds working close to each other, but also living. The entertainment that will come with these communities can be built out. That's why I'm really excited to see the evolution of the innovation district,” he said.
The new St. Paul’s Hospital and health campus is scheduled to complete construction in 2026 with doors opening in 2027, according to Providence Health Care. Holloway predicts even more growth for the area once the hospital is open.
“It's just an extension of the downtown core. It's got access to transit, it has the amenities, and you can get in and out of the city,” he said. “The zoning is accommodating for these types of uses as well. So, it's going to be thriving and lots of innovative – that's the buzzword – but innovative organizations moving into this area.”