A grim business investment outlook has cooled office demand in Metro Vancouver according to a panel of commercial real estate experts convened by NAOIP.
"Seriously, are there really any growth industries in British Columbia?" asked panel moderator Maury Dubuque, senior vice-president of office leasing for Colliers International.
The panellists - Jeff Rank, a partner with Bentall Kennedy (Canada) LP, Bart Corbett, senior vice-president at Cushman & Wakefield Ltd., and Norm Taylor, senior vice-president with Jones Lang LaSalle - concluded that, while the region's office market remains relatively balanced, it also faces slow times between 2015 and 2017.
"We're not seeing nearly as many people out and active in the market," said Rank.
While mining companies and related firms are returning space to the market, Taylor pointed to Facebook and Twitter as signs of life in the tech sector.
"We've had a great ride, and whether the ride is over is still up for debate," he said. "We've got to make sure we're keeping our minds open and looking in other ponds to fish for tenants."
Rank added, "One of the trends that I'm seeing that is a little bit dangerous in terms of how our market normally operates is [that] some of these buildings have been built as a result of rezoning requirements."
Take Marine Gateway, where 247,417 square feet of office space was key to its approval, while the Solo District in Burnaby hinged on inclusion of a 230,000-square-foot office tower.
"I think we're a little ahead of ourselves in some of those suburban markets at this point," he said.
Government could play a role in supporting demand either by taking space or attracting new business. But Corbett says it seems to be coming up short.
He contrasted B.C.'s approach with the incentives Quebec offers businesses that locate in Montreal.
"It's sad to watch how [Ericsson] is growing their operations in Montreal by two, three, four times, whereas here in Vancouver we're reducing it by 30 per cent, 40 per cent," he said. "They're getting tax breaks … so they're growing their operations there and they're not growing it here."
– Peter Mitham/BIV
from Western Investor November 2013
