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Hi all,An article from the November 25th - December 1st edition of Business in Vancouver newspaper.Institute`s report rates Vancouver as the best real estate market in North America
Dwindling demand for downtown commercial space increasing market`s sublease opportunities
Real Estate Roundup: Peter Mitham
First, the good news
Vancouver is entering 2009 as North America`s top real estate market, according to the current edition of the Urban Land Institute`s Emerging Trends in Real Estate report.
Undertaken in partnership with PricewaterhouseCoopers, the long-running annual publication surveys a wide variety of factors affecting real estate markets in North America and around the world. Canada, with its less-volatile markets, stands to be more stable but will still experience a slowdown as the U.S. grapples with the myriad woes it faces.
The report, as well as commentators brought together for its launch at the Terminal City Club, believes Vancouver is facing the threat of a recession from a position of strength. With almost every class of property – office, industrial, multifamily rentals – reporting low vacancies, any drop in demand the report forecasts won`t necessarily be catastrophic.
Indeed, the essential fundamentals of the market garner the city a desirable hold rating, and rank it among the best prospects for new development and investment.
Access to financing will be key, however, as the developers of several projects in the Lower Mainland are keenly aware. The outlook has darkened in the past two months, as churning markets sapped business confidence. The challenges Millennium Development Group, Jameson Development Corp. and other developers have encountered in securing funding highlight the scale of the problem, even in a relatively strong market like Vancouver.
Sublease opportunities rise
One barometer of business confidence has been demand for commercial space, which is falling and prompting some tenants to return space to the market. Lululemon Athletica Corp., for example, recently backed out of the 80,000 square feet it was set to take in PCI Group`s Crossroads project at Cambie and Broadway, one of a growing number of sublease opportunities hitting the market in recent weeks.
"Upon re-evaluating our head office requirements, the Crossroads building lease ultimately offered more space than we needed," Lululemon said in a statement to media.
It`s a familiar refrain, with just about every brokerage in town reporting a growing volume of sublease space hitting the market in the past eight to 12 weeks.
Barclay Street Real Estate`s report hit first, announcing a 10-year high for sublease offerings in the downtown core. Barclay Street`s stats to the end of September showed that sublease accounted for 25.5% of all vacant space in the core, up from 20% at the end of 2007 and exceeding the 24.8% proportion seen in 1998.
CB Richard Ellis followed, reporting that new sublease listings in the downtown core totalled 24 in October, four times September`s listings.
November isn`t set to deliver an improvement
Colliers International tracked 38 new sublease listings across Metro Vancouver in October, or about 153,500 square feet. By mid-November, 24 new sublease listings totalling 90,455 square feet had hit the market – an indication that the final tally for the month could be greater than in October.
Just under 585,000 square feet of sublease space were on the market at the end of October, primarily in the downtown core and largely spaces of less than 2,500 square feet.
Keith
Dwindling demand for downtown commercial space increasing market`s sublease opportunities
Real Estate Roundup: Peter Mitham
First, the good news
Vancouver is entering 2009 as North America`s top real estate market, according to the current edition of the Urban Land Institute`s Emerging Trends in Real Estate report.
Undertaken in partnership with PricewaterhouseCoopers, the long-running annual publication surveys a wide variety of factors affecting real estate markets in North America and around the world. Canada, with its less-volatile markets, stands to be more stable but will still experience a slowdown as the U.S. grapples with the myriad woes it faces.
The report, as well as commentators brought together for its launch at the Terminal City Club, believes Vancouver is facing the threat of a recession from a position of strength. With almost every class of property – office, industrial, multifamily rentals – reporting low vacancies, any drop in demand the report forecasts won`t necessarily be catastrophic.
Indeed, the essential fundamentals of the market garner the city a desirable hold rating, and rank it among the best prospects for new development and investment.
Access to financing will be key, however, as the developers of several projects in the Lower Mainland are keenly aware. The outlook has darkened in the past two months, as churning markets sapped business confidence. The challenges Millennium Development Group, Jameson Development Corp. and other developers have encountered in securing funding highlight the scale of the problem, even in a relatively strong market like Vancouver.
Sublease opportunities rise
One barometer of business confidence has been demand for commercial space, which is falling and prompting some tenants to return space to the market. Lululemon Athletica Corp., for example, recently backed out of the 80,000 square feet it was set to take in PCI Group`s Crossroads project at Cambie and Broadway, one of a growing number of sublease opportunities hitting the market in recent weeks.
"Upon re-evaluating our head office requirements, the Crossroads building lease ultimately offered more space than we needed," Lululemon said in a statement to media.
It`s a familiar refrain, with just about every brokerage in town reporting a growing volume of sublease space hitting the market in the past eight to 12 weeks.
Barclay Street Real Estate`s report hit first, announcing a 10-year high for sublease offerings in the downtown core. Barclay Street`s stats to the end of September showed that sublease accounted for 25.5% of all vacant space in the core, up from 20% at the end of 2007 and exceeding the 24.8% proportion seen in 1998.
CB Richard Ellis followed, reporting that new sublease listings in the downtown core totalled 24 in October, four times September`s listings.
November isn`t set to deliver an improvement
Colliers International tracked 38 new sublease listings across Metro Vancouver in October, or about 153,500 square feet. By mid-November, 24 new sublease listings totalling 90,455 square feet had hit the market – an indication that the final tally for the month could be greater than in October.
Just under 585,000 square feet of sublease space were on the market at the end of October, primarily in the downtown core and largely spaces of less than 2,500 square feet.
Keith