This article originally appeared on the Vancouver Sun website.
Downtown Vancouver office space coming available as companies leave
Publishing date: June 6 2020
Companies are putting more downtown office space they no longer need onto the sub-lease market, hoping to rent it out to another company, in numbers that are surging.
The uptick comes as the COVID-19 pandemic changes commercial real estate trends, with companies scaling back and employees continuing to work remotely.
The office space available for sublet in downtown Vancouver had already doubled, from about 130,000 square feet at the end of the first quarter to over 260,000 square feet when broker Ross Moore recently cited it as a mini-milestone.
Moore now says the available sublet space has gone up again, rising to around 370,000 square feet in just a week.
“Boy, have the (numbers) changed,” he said. “I am literally in a state of shock.”
Moore is a managing broker at real estate company Cresa who has worked on leases for companies in Vancouver for almost 30 years, and has seen four economic downturns.
He said the 10-year average for available sublease space is around 214,000 square feet, meaning what was available at the end of March — about 130,000 square feet — was lower than usual.
“We haven’t doubled the 10-year-average (now),” he said. “But we’re getting close.”
When he first commented on the trend, he marvelled at how quickly some companies were trying to rent out their leased space.
“What is remarkable this time is the speed,” said Moore. “I’ve spoken to a lot of other brokers and landlords and none of us have ever seen anything like this before, not that fast.”
He said that with record-low vacancy rates at between two and three per cent, “it’s so tight, people are thinking, ‘I stand a pretty good chance of getting rid of the space,'” compared to in past downturns when there was a recession.
But there is not much take up this time around for companies hoping to sublease their downtown office space, even though there are some inquiries, said Moore.
Some of the companies looking sublease large spaces include Scanline VFX, which is offering over 30,000 square feet, and local tech company Mobify, which is offering about 20,000 square feet, said Moore.
Others include Wishpond, Vision Critical and Stemcell Technologies. There are also smaller language schools, film and junior mining companies that have put their space up for sub-lease.
In late May, Canadian e-commerce firm Shopify CEO Tobias Lutke said working remotely would continue for its employees, and its existing offices would remain closed until 2021.
He tweeted that “office centricity is over.”
The company had announced in January that it would move into 70,000 square feet over four floors in downtown Vancouver’s Four Bentall Centre and build a research and development centre. It recently said there will be a “recruitment hub” in Vancouver instead.
Lynsey Thornton, a vice-president at Shopify, confirmed this in a statement, but didn’t address if it meant Shopify would be subleasing some of its space.