Commercial Real Estate: Downtown office tower redevelopment further squeezes vacancy rates


The renoviction of a downtown Vancouver office tower is going to make it a little tougher for tenants to find work space in what is increasingly becoming a landlords’ market.

Bentall Kennedy recently gave notice to its tenants at 1090 West Pender St. that they must move out of the 76,000-square-foot building by July 31, Postmedia has learned.

The site had been slated for a redevelopment that will replace the 48-year-old, 12-storey building and parkade with a new 530,000 sq. ft. office tower and underground parkade.

“I can confirm that, in accordance with our leasing agreements with each of our tenants at 1090 West Pender, all tenants will be set to leave the property in the coming months,” said Bentall Kennedy’s president of real estate services, Tony Astles, in an email to Postmedia.

City Council approved a rezoning of the site in May, 2015 to allow for a 31-storey, 564,000 sq. ft. tower rising up to 133 metres, with retail and service use on the lower two levels. The zoning allowed for 486 parking spaces.

“We are presently finalizing all efforts toward obtaining a development permit and then our intention is to commence with demolition of the parkade structure in Fall 2018,” Astles said. “Demolition of the office building is expected to begin toward the end of 2018.”

He said Bentall Kennedy’s leasing team will be willing to assist tenants if they choose to seek tenancy elsewhere in their portfolio.

It’s a redevelopment that will eventually add space in 2022 to an office market that has seen vacancy creeping downwards.

“We anticipated that at some point Bentall Kennedy was going to pull the trigger, so to speak (on 1090 West Pender),” said Ross Moore, a tenant advisor with Cresa in Vancouver. “Now we’ll have another 70,000 square feet of tenants out there, going ‘where do we go’?”

Metro Vancouver’s overall office vacancy rate tumbled to eight per cent at the end of 2017, the lowest it has been in the region in roughly five years, according to a new year-end report from Avison Young.

The regional office vacancy rate fell from the 9.7 per cent to eight per cent in one year, according to the report released on Feb. 2

Downtown, the office vacancy at the end of the year was marked at 7.1 per cent, almost unchanged from 7.2 per cent a year earlier, but local brokers expect vacancy downtown to creep lower as demand outstrips supply amid a current …read more

Source:: Vancouver Sun – Business

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