In its real estate market study published today, Newmark Knight Frank Devencore reported vacancy rates in downtown Vancouver are now among the lowest in Canada.
Combined "A" and "B" class vacancy rates stood at 3.5% in mid-2011, down from 4.2% at the end of 2010, representing the positive absorption of just over 150,000 square feet.
The class A submarket is especially tight, with an overall vacancy rate of only 2.9%. Just over 375,000 square feet of class "A" space is available for lease or sublet, most of this in smaller blocks.
Jon Bishop, vice-president and managing principal of Devencore Company Ltd., said, “Downtown vacancy rates are now returning to the record low levels we saw prior to the financial crisis in 2008-09.”
“With the tightness of supply, we expect that average asking rental rates, already among the highest in the country, will soon eclipse those achieved during the market peak of early 2008.”
Bishop added that the downtown office market will favour landlords over the short term, but development will soon shift the dynamics of the downtown market.
“No fewer than three major LEED office tower projects have been confirmed,” Bishop said.
"Collectively, these developments will bring nearly 1.2-million-square-feet of prestige space to the market. The promise of this new premium view space in the downtown area may soon begin to have an influence on the real estate decisions of some larger tenants.”
Jennifer Harrison
@JHarrisonBIV