Q3 2019 Vancouver Summary Office & Industrial Statistics
Metro Vancouver office and industrial warehouse users continued to be challenged by a very tight market with decidedly little space available to lease and the promise of only higher lease rates. The Lower Mainland finished the 3rd quarter with an office vacancy rate of 4.6%, up marginally from the previous quarter, but well down from the same period a year ago. The industrial availability rate held steady over the quarter, but down from a year ago, remaining at a record low. Metro Vancouver's leasing markets are among the most restrictive in North America, and indeed the world. Class A office space in downtown Vancouver is now comfortably above $40.00 per square foot (psf), with new office towers commanding $50+ psf. Combined with additional rent of ~$25.00, total occupancy costs (gross rent) in new office developments are nearing $80.00 psf, the highest in Canada. For warehouse users, region-wide lease rates now average $13.46 psf, with new construction in premier markets preleasing at rates between $14.00 and $15.00 psf. These highly challenging conditions leaves tenants with the prospect of significantly higher real estate costs, and very few options at lease expiry. The same can be said for new entrants, and is beginning to put a damper on demand. Unfortunately for office and industrial occupiers the prognosis is for more of the same well into 2020, and indeed, into 2021.