Developers of proposed downtown office buildings say industry observers should stop speculating about projects being shelved and the dearth of anchor tenants.
“We are negotiating with potential tenants,” SwissReal principal Franz Gehriger stressed to Business in Vancouver. “We are building. We are confident that we will have tenants in six months.”
SwissReal and partner Crédit Suisse received rezoning approval in November for a 400,000-square-foot tower that is 90% office space. Gehriger expects that he’ll secure a permit within the next month for his proposed development in the former stock exchange tower at 801 West Pender Street.
He believes tenant demand will then increase because of such advantages as the building being LEED (Leadership in Energy and Environmental Design) platinum and close to several SkyTrain stations.
Manulife Financial received rezoning approval for its planned 360,000-square-foot tower at the corner of Nelson and Howe streets about a year ago but has yet to find an anchor tenant that would kick-start development.
No one from Manulife was available for comment by press time.
Vancouver Whitecaps co-owner Greg Kerfoot’s proposed 350,000-square-foot, 25-storey tower at 320 Granville Street similarly lacks an anchor tenant. Neither Kerfoot nor anyone from VIA Architecture was available to discuss the project.
“I could make a lot of money if I knew where all these tenants would come from,” said Jeff Rank, Bentall Kennedy’s vice-president of development projects, marketing and leasing.
Rank added that there is healthy demand for new office space but that tenants will not commit to new space unless construction synchronizes with the expiration of their current lease.
“There are a few dynamics at play. How deep is the market? I would still hazard to say it’s not that deep.”
Anchor tenants key to making office projects viable
Several downtown office towers totalling more than one million square feet are under construction because their marketers have secured anchor tenants.
They include:
•the 270,000-square-foot, Oxford Properties-developed MNP Tower at 1021 West Hastings Street;
•the 370,000-square-foot Bentall Kennedy-developed tower at 745 Thurlow Street; and
•the 500,000-square-foot office tower that will be part of the Telus Garden development that Telus Corp. and Westbank are building in the block bounded by Robson, Georgia, Seymour and Richards streets.
Several more projects are virtually certain to get built because they already have tenant commitments.
Aquilini Investment Group (AIG), like Telus, plans to occupy much of its planned project. AIG’s latest statistics show that it wants to build a 284,629-square-foot mixed-use building with 110,760 square feet of office space at 800 Griffiths Way near Rogers Arena.
Cadillac Fairview plans to build 280,000 square feet of office space as part of its renovation of the former Sears space at Pacific Centre, where Nordstrom will be the anchor retail tenant.
Jim Pattison Developments and Reliance Properties Ltd. are similarly likely to build their proposed 13-storey, 100,000-square-foot office tower at the corner of Burrard and Drake streets, according to IBI/HB Architects associate director Jim Hancock.
He said Pattison is eager to rebuild the existing Toyota dealership so it can take four underground storeys and three aboveground storeys in the future office tower.
