As Vancouver’s downtown office vacancy rate drop to a four-year low – and Class AAA vacancies plunge below 1 per cent – a fresh building boom could deliver nearly three million square feet of space by 2017.
“The downtown’s effective overall availability rate is 5.9 per cent, according to a survey by Avison Young, which notes that more than 111,000 square feet was leased up during the first half of this year.
The Class AAA sector, where the new projects are concentrated, has only 0.8 per cent vacancies.
How tight is the top-tier market? The largest block of vacant offices is just 14,800 square feet at the Jameson House tower on West Hastings Street.
According to Cushman & Wakefield, downtown Vancouver office vacancy has hovered around 3.6 per cent for prime space over the past two quarters and finding Class AAA space downtown has become next to impossible.
The result is pent-up demand that is now fueling an office building boom that includes plans for 20 new office projects in the city over the next few years, including the mixed-use Telus Garden complex on West Georgia.
“The product in our market today that we consider AAA-quality buildings only have that rank because there’s no benchmark above that,” said Mark Chambers, Cushman & Wakefield’s senior vice-president of office leasing.
“I think the market is screaming for a building like the Telus Garden one, which will be LEED platinum and have all the new building technologies, such as raised floor systems, opening windows and different heating and ventilation systems," he said.
