Low office vacancy stimulates growth
Neil Sharma
Canadian Real Estate Wealth
As Vancouver’s vacancy rate for office space remains among North America’s lowest, there’s growing appetite for strata office developments in the city.
Driven primarily by low downtown vacancies and, consequently, surging rents—and compounded by large companies like Amazon, Apple and Deloitte buying hundreds of thousands of square feet of office space—Vancouver has become inhospitable to smaller businesses looking to set up shop. Not surprisingly, savvy investors have taken note and are beginning to fulfill this need in the marketplace.
“There is great opportunity for investors looking to purchase space, particularly when you consider the many strong, local businesses looking to lease space in a AAA building,” said Matt Carlson, vice president of Colliers International. “These businesses are often unable to find a landlord who is willing to lease less than 10,000 square feet, or in some cases less than 20,000 square feet. Investors purchasing smaller units will have many tenants interested in renting space from them at historically high rental rates.”
Chard Development has capitalized on the demand and built The Yukon in the Mount Pleasant neighbourhood, with strata units designed for creative or light industrial ventures and for businesses with as many as 30 employees.
Byron Chard, principal and chief financial officer of Chard Development, notes that the neighbourhood’s appeal alone has attracted investor attention. A slew of residential and retail developments line the streets of Cambie and Main and within the Olympic Village, quickly turning it into one of Vancouver’s most desirable neighbourhoods.
“Strata office ownership isn’t exclusive to those looking to relocate or establish a business within their purchased space,” said Chard. “Savvy investors are also able to take advantage of this opportunity and to lease their space to business owners looking to set up shop in this coveted neighbourhood. In our experience, we have had many buyers purchase multiple units—one for themselves and one for investment or future growth planning.
“With our Mount Pleasant projects, we’ve seen interest from the creative class of businesses who have long appreciated that neighbourhood—including architects, design firms and furniture retailers—as well as the high-tech businesses who have made this area home in recent years. With the Yukon, we’ve seen interest from smaller professional firms, as well as film production companies, breweries, coffee roasters, and food uses that have a production component.”
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