Downtown developers continue to focus on condo market
Derrick Penner
Sun
If the slowing U.S. housing markets spills over to Vancouver in the form of fewer American buyers for downtown condos, that could be still be a good thing.
Developers then might turn their attention to building offices again, Shawna Rogowski, senior research associate at the commercial realtor Colliers International said in her fourth-quarter office leasing report.
Vancouver’s downtown peninsula looks like a forest of construction cranes, but only one tops an office structure, the Bentall 5 building at Burrard and West Pender.
“Cranes mean nothing to us downtown any more,” Rogowski lamented.
Rogowski said in her report that overall office vacancy ticked upward marginally in the fourth quarter to 5.8 per cent from 5.7 per cent in the third quarter. However, that 0.1 per cent is the equivalent of only 64,000 square feet of space.
And Rogowski added that leasing activity slowed down in the fourth quarter simply because there is less space to rent and fewer options for potential tenants.
“We’d love to see new office buildings downtown,” Rogowski said.
The next office development after Bentall 5, however, will be a component of the Jameson House mixed-use tower on West Hastings Street, but that isn’t scheduled to be complete until 2009.
“As of now there are no new developments,” Rogowski said, “so we’re looking past 2010 for new office development.”
In downtown Vancouver, office vacancy ratcheted down further to 3.8 per cent in the fourth quarter from four per cent in the third quarter.
New tenants are coming downtown, Rogowski said, but not big tenants. She added that downtown’s existing big tenants are looking to expand and Colliers says she advises them to take more space than they need now to accommodate future growth.
Among the suburbs, Burnaby saw its office vacancy rate drop to 4.4 per cent from 4.6 per cent in the third quarter and the North Shore’s fell to 4.6 per cent from six per cent.
New Westminster also saw more leasing with its vacancy rate slipping to 16.2 per cent from 17.4 per cent in the previous quarter.
Rogowski said Richmond saw the biggest increase in vacancy, hitting 14.5 per cent in the fourth quarter from 11.8 per cent in the third quarter, for a couple of reasons. Sprint Canada and Raytheon Canada moved out of their Richmond offices, and Worksafe BC consolidated its operations causing the organization to vacate 35,000 square feet of its space on Granville Avenue.
© The Vancouver Sun 2007
