Ashley Ford
Province
The squeeze will be on for 2010 Winter Olympic service providers seeking short-term office space in downtown Vancouver, Colliers International predicts in its latest office survey released yesterday.
It says the once glutted office market has disappeared, with vacancy rates now down to 4.7 per cent and precious little new inventory on the horizon.
That is turning the blowtorch on leasing rates and has sent them flirting with the $40-per-square-foot level for top-of-the-line AAA office buildings.
Currently, downtown rates for AAA buildings range from $26 a square foot to $35 compared with $25 to $30 a year ago. A-class building space is now fetching $16 to $30 a square foot compared with $18 to $25 a year ago.
The increases come after a ban on converting downtown office space into condominiums.
The squeeze on existing space is being made even tighter by the continuing robust economy, strong commodities market and the approaching Olympics.
“The Vancouver real-estate market continues to be a landlord’s market as tenants have subsequently found it difficult to obtain inducements that were more readily available in the past,” the report says.
Colliers predicts the market will only get tighter down the road. There are only three office projects, Bentall V at 505 Burrard, a small development at 1110 Hamilton and the Jameson Development at 848 W. Hastings, representing a total of 335,000 square feet, coming on stream this and next year.
It predicts larger tenants will be forced to flee to the suburbs to find suitably priced space and fulfil expansion needs.
© The Vancouver Province 2006