With all of the talk and activity regarding Vancouver’s commercial sector, there is a nearby area that is flying a little under the radar. That is the effect of having record sales in the new 30 storey Waterfront Centre in Downtown, which has sold in the $2000/sf range compared to the previous record of $1300/sf at Terminal City office tower.
Granted both are in a unique location at the Burrard waterfront of Downtown, however the average floorspace price for commercial real estate is still $830/sf in the City of Vancouver. A vacancy rate of 5% is the second lowest in North America and has attracted some platinum star, conservative investors lately, such as the massive Ontario Pension Plan. Vancouver’s economy in general is firing on all cylinders, with 2018 growth expected to lead the nation’s cities at 2.4%. This all results in pressure on the City of Vancouver commercial market.
Burnaby is a quick 15 minute Skytrain ride from the downtown core and is gearing up as an alternative urban centre. With a population growth in that city expected to maintain its position as British Columbia’s third largest city, it is well positioned geographically to capitalize on overflow from the hot market in the City of Vancouver. Burnaby’s comprehensive Metrotown Plan, along with similar plans in the Brentwood and Lougheed town centres, aim to establish Burnaby as the leading alternative choice. Landlords in Vancouver are already limiting tenant inducements as well as increasing lease rates, forcing tenants to consider other options. At $30/sf and 10% vacancy versus $50/sf and 5% vacancy in the City of Vancouver, Burnaby is fast becoming that viable option.
If you wish to explore the options in Greater Vancouver’s hot commercial market, we would be glad to advise you of the great opportunities.
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