The leasing of 267,000 square feet of office space by tech firms has not been enough to keep Vancouver’s downtown office market from posting the highest vacancy rate in nine years.
With more than one million square feet of new offices delivered in the past year, the downtown office vacancy rate has hit 6.4% and the market has seen 390,000 square feet of “negative absorption” in the last 12 months, according to Avison Young. Negative absorption refers to the amount of new leases compared to space shoved onto the sublease market.
Three high-tech deals this year have been the bright spot in a lacklustre downtown leasing market. Micosoft Canada has booked 145,000 square feet in the Pacific Centre complex at 725 Granville; Sony Pictures Imageworks has taken 72,500 square feet, also at Pacific Centre; and Tetra Tech Inc., an engineering firm, leased 50,000 square feet at 825 Dunsmuir.
The overall Metro Vancouver office vacancy rate is now 9.9%, while the suburban vacancy rate has spiked to 12.6%, the highest level since 2004.
