Latest News in Commercial Real Estate
Take a look at the latest happenings revolving around commercial real estate in all of BC. Stay up-to-date with the current commercial market news.
August 20, 2019
. Vacancy rates are tight and lease rates have risen across all three sectors, reports market intelligence firm CoStar Group
While Metro Vancouver’s residential sector struggles, its commercial real estate market is holding firm, with vacancy rates extremely low, according to a monthly analysis by commercial market intelligence company CoStar Group.
The group analyzed the office, industrial and residential sectors and offered some forecasts on each market.
For Metro Vancouver, winning the race to the lowest industrial-land vacancy rate in North America isn’t an enviable accolade, instead it’s pushing the region closer to crisis mode.
Metro has surpassed Toronto, with an industrial vacancy rate of 1.2 per cent versus 1.5 per cent, according to a new report from Avison Young, which pushes up land values and lease rates in addition to making it incredibly difficult for businesses that want to land here or expand.
“It’s not good for local business, that’s for sure,” said Russ Bougie, an Avison Young principal in its industrial department. “It does not help support growth.”
Inside Vancouver itself, the soaring industrial property values that come with shrinking vacancies are creating an affordability crisis for businesses, said Pietra Basilij, manager of industrial initiatives for the Vancouver Economic Commission (VEC).
Delta Town & Country Inn owner Ron Toigo confirmed April 12 the hotel at the junction of highways 17A and 99 is to be demolished. By noon the same day, a small section had already come down.
The complex is to be replaced with a $70 million hotel/casino.
Nearly four million square feet of new office space is set to be built over the next four years in downtown Vancouver, but up to 46 per cent of that space is already spoken for, local commercial brokers say.
Between 2020 and 2023, about 3.8 million sq. ft. of new office supply will be delivered to the market and roughly 1.2 million square feet of that has already been pre-leased, said Colin Scarlett, an office leasing specialist and executive vice-president with Colliers International in Vancouver.
An additional 558,000 sq. ft. of option space, meaning space that pre-leased tenants could also take at their choice, is also agreed to, he said.
“If you add all that space up … that gets you to 46 per cent of the total new supply is already essentially spoken for,” Scarlett told Postmedia.
Westbank’s rezoning application for its unusual S-shaped, 17-storey, Bjarke Ingels-designed office tower envisioned for 720 Beatty St. goes before an open house March 11. Ingels, a Danish starchitect, also designed Westbank’s Vancouver House — the twisty luxury condo tower that’s under construction at the north end of Granville Bridge.
Another office tower could be coming to downtown Vancouver.
A rezoning application has been filed for a 31-storey office building at 1166 West Pender St. between Bute and Thurlow streets in Coal Harbour.
The rezoning application for the development project, involving Integral Group, Reliance Properties and IBI Group Architects, goes to open house Jan. 22.
Metro Vancouver’s commercial and industrial real estate sector is coming into 2019 with arguably the best market conditions in Canada. It is witnessing a rare confluence of among the lowest vacancy rates in North America, record high prices and sustained development. While total sales dipped in the third quarter of last year from the previous quarter, sale volumes barely budged.
The value of permits issued for commercial buildings in B.C. has never been higher.
New commercial permits topped $564 million in November, a 130% increase over October, according to Statistics Canada. The agency reported that a $240-million permit for a new office tower in the Greater Vancouver region contributed most to the gain.
Total non-residential permits – which include commercial, institutional and industrial developments – reached nearly $742 million, a 75% increase over the month before.
Running under a full head of steam for the past three years, Metro Vancouver’s commercial real estate sector hit a speed bump late in 2018, but it wasn’t enough to derail the hottest market in Canada this year, analysts say.
In the third quarter of last year, sales of commercial real estate properties dropped nearly 20% from the second quarter, to 565, the lowest quarterly level in four years, according to the commercial division of the Real Estate Board of Greater Vancouver (REBGV).
The 10-year bull market in the Canadian commercial real estate sector continued in 2018, supported by the lowest unemployment rate in at least four decades. For several months, the lack of an amicable trade deal with the U.S. was a destabilizing factor on many fronts, but the prospective United States-Mexico-Canada (USMCA) agreement removes some of the doubt. Meanwhile, new federal and provincial measures appear to have stabilized the housing market.
Mini-warehouses, individual storage rooms, although this business exists and develops since the 1960s, today it is one of the fastest growing and diversifying sub-sectors of the commercial real estate market. Self-storage in Canada is now an $840 million industry that experienced an annual growth rate of 7.3% from 2012 to 2017.
Mobile game developer Kabam with headquarter in Vancouver, and offices in San Francisco, CA and Austin, Texas is expanding and will occupy 105,000 square feet across seven floors in Vancouver Centre II, scheduled to be completed by 2021.
Chinese insurance company Anbang Insurance may sell four of the five Bentall Centre office towers only a few years after spending more than $1-billion on it. Company paid $1.06-billion for the four office towers in 2016 - the most expensive commercial real estate transaction in Vancouver.
Office space is more in demand today than it ever has been. Over 2.3 million sq ft of new office space currently under construction in the downtown Vancouver. 30% of that space has already been pre‐leased. (563,000 sq. ft. by Amazon). However Vancouver still a small market compared to Toronto or to Calgary from an office perspective.
Westbank Corp. plans to announce a new strata office development in downtown Vancouver. It recently won approval from the city for a 24-storey tower at 400 West Georgia Street with 353,000 square feet of office space and is planning to redevelop the Creative Energy plant at 720 Beatty Street with a mix of residential units and 18 storeys of office space.
The Seoul-based Korean US$10 billion fund KTB Asset Management Co. Ltd with majority of its foreign assets are currently in the United States is searching for offices, hotels, distribution centers, and other large properties in Vancouver and Toronto and plans to invest up to C$600-million over the next year.
A new report offers Agricultural Land Reserve parcels as a welcome alternative to marijuana production on in-demand industrial land.