Vancouver Office & Industrial Market Statistics - 3rd Quarter 2023
Third-quarter data suggest Metro Vancouver's office and industrial markets show further signs of moderating with availabilities up for both. Office looks to have taken another step down, while industrial shows further signs of letting up after a record-run of robust growth. Like office markets across North America, Vancouver's office market is seeing little net new demand as companies shed excess space and remain highly conservative about future growth. Warehouse users are also being for more restrained even though economic conditions remain positive. After nearly 18 months of monetary tightening, including the highest interest rates in over 20 years, many businesses are "battening down the hatches". Third quarter office leasing activity was also noteworthy for again recording an exceptionally sluggish three-month period, with the lowest leasing activity on record, barring the second half of 2020 during the depths of COVID.
At quarter-end, the Metro Vancouver office market saw availabilities increase by 50 basis points (bps) to register 11.3%, and up materially from year-ago levels. Of note, the bell weather downtown market saw total available space exceed 4.6 million square feet, or 14.2%. A level not seen since the early 1990's. This, while the industrial availability rate also increased by 50 bps to register 3.3%, a level last recorded in Q3 2020. Office deliveries registered a notable 668,000 square feet, including the south tower of The Post development in downtown Vancouver. Industrial completions were also noteworthy, exceeding 1.4 million square feet after two relatively subdued quarters. During the third quarter office rents fell by $0.46 per square foot to average $29.56 per square foot, while warehouse rents mostly held steady at $21.20 per square foot.