Vancouver — In its Real Estate Market Research study published today, Newmark Knight Frank Devencore reported that recent tenant activity has sharply reduced space availability and has sparked developer interest in bringing new office buildings to the downtown Vancouver office market. The largest tenant transactions over the past two quarters include WeWork’s commitment to almost 80,000 square feet in Bentall Three at 595 Burrard Street and the conditional deal with The Executive Group to convert approximately 110,000 square feet to hotel use in The Exchange building at 475 Howe Street.
“The conversion of a large part of The Exchange building to hotel use has the most far-reaching ramifications, as this was the only new property being delivered to the market in 2017 with substantial availability,” said Jon Bishop, Executive Vice President and Managing Principal of Newmark Knight Frank Devencore’s Vancouver office. “The tightening of the downtown Vancouver market may lead some developers to accelerate the projects they already have in the planning and permitting stages. There are at least a dozen such projects in the pipeline, most of which are slated for 2021.”
Newmark Knight Frank Devencore reports that tenants in the high tech, finance, professional services and hospitality sectors are driving the recent leasing activity, and falling vacancy rates for all office classes in downtown Vancouver reflect this demand. In the current quarter, the overall vacancy rate stands at 7.1%, down from 8.7% a year earlier. The decline in supply has put pressure on average gross rents as well, which currently stand at $41.76/sf, compared to $40.73/sf a year ago.
“Newer downtown office space is almost fully occupied, and larger blocks of contiguous space can be a challenge to find,” Mr. Bishop said. “There are limited opportunities for tenants seeking smaller spaces, but most of these opportunities will be found in older buildings that may require improvements. Furthermore, many of the best leasing options that currently exist are landlord or building specific, so tenants and their advisors need to be prepared to negotiate innovative ways to finance the necessary improvement projects.”
To read the complete market study, follow this link.
About Newmark Knight Frank Devencore
As part of Newmark Knight Frank, one of the world's leading commercial real estate advisory firms, Newmark Knight Frank Devencore is Canada's largest corporate real estate advisor and brokerage, exclusively representing corporate, industrial and retail space users. With offices across the country, Newmark Knight Frank Devencore offers its global clientele comprehensive services that are individually designed to ensure executive real estate decisions are supported by effective strategies and professional execution. To learn more about our capabilities, please visit www.devencorenkf.com.
About Newmark Knight Frank
Newmark Knight Frank (NKF) is one of the world's leading commercial real estate advisory firms. Together with London-based partner Knight Frank and independently-owned offices, NKF's 14,100 professionals operate from more than 400 offices in established and emerging property markets on six continents.
With roots dating back to 1929, NKF's strong foundation makes it one of the most trusted names in commercial real estate. NKF's full-service platform comprises BGC's real estate services segment, offering commercial real estate tenants, landlords, investors and developers a wide range of services including leasing; capital markets services, including investment sales, debt placement, appraisal, and valuation services; commercial mortgage brokerage services; as well as corporate advisory services, consulting, project and development management, and property and corporate facilities management services. For further information, visit www.ngkf.com.
NKF is a part of BGC Partners, Inc., a leading global brokerage company servicing the financial and real estate markets. BGC's common stock trades on the NASDAQ Global Select Market under the ticker symbol (NASDAQ: BGCP). BGC also has an outstanding bond issuance of Senior Notes due June 15, 2042, which trade on the New York Stock Exchange under the symbol (NYSE: BGCA). BGC Partners is led by Chairman and Chief Executive Officer Howard W. Lutnick. For more information, please visit www.bgcpartners.com.
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