Being within walking distance to rapid transit stations in Metro Vancouver is proving a vital factor when leasing suburban office space, according to a survey by Jones Lang LaSalle (JLL) Vancouver.
Office buildings located within 500 meters of rapid transit stations benefit from lower vacancy rates and higher rents than those areas not served directly by rapid transit, according to the Rapid Transit Office Index compiled by the commercial real estate broker.
The difference can be startling. In Richmond, for example, the vacancy rate for office buildings close to a Canada Line station is 4.6%, compared with 17.1% for those further than 500 metres to 1,000 meters from a station.
In Surrey, the study found that close-to-transit office buildings had an average vacancy rate of 7.9%, while those further away posted a vacancy rate of 22.2%. Average rents for offices close to transit averaged $24.95 per square foot, 35% higher than offices more than 500 metres from a Surrey SkyTrain station.
Burnaby, however, had higher vacancy rates, 19%, for transit-oriented office buildings than those buildings further away from SkyTrain stations, which was 9.8%. However, JLL says this is largely due to the recent completion of the 411,000-square-foot Metrotower III at Metrotown, which is only 23% leased, and other new projects. “Of the nearly 1.7 million square feet of office space within 500 metres of Metrotown [SkyTrain] Station – 95% of which is Class A – 23.7% is currently vacant,” the report notes.
Burnaby office space close to transit, though, achieves average net lease rates of $23.51 per square foot, compared to $16.66 in net leases for office space further away from transit.
The report adds that there are currently 28 office developments being built close to Metro Vancouver rapid transit stations, representing nearly 90% of the entire new office supply.
“Rapid transit proximity remains one of the most significant considerations for office tenants when evaluating real estate requirements throughout Metro Vancouver,” said Scott MacDonald of JLL Vancouver’s office leasing team.
