Avison Young in Vancouver
The Vancouver office was an integral partner in the formation of Avison Young. Five top BC commercial real estate brokers established an Avison & Associates office in 1994. The office subsequently joined with the Avison & Associates office in Ontario and Alberta-based Graeme Young & Associates to form Avison Young in 1996. As the home to many of Avison Young’s top producers year after year, the Vancouver office has closed billions of dollars of commercial real estate sales, negotiated a significant number of office-accommodation transactions and industrial lease deals, and has been a leader in landlord lease representation.
Vancouver is located in Canada’s westernmost province of British Columbia and serves as home to the country’s largest and busiest port. Bounded by the Strait of Georgia to the west, the U.S. border to the south and the Coast Mountains to the north, Metro Vancouver has historically been constrained by a lack of available land that results in higher-than-average property values and lower vacancy rates.
Traditionally, the province is a natural resources powerhouse, producing timber, coal, aluminum and a range of mineral ores including copper and zinc. Exposed to the economies of the Pacific Rim, the regional economy has been shaped by international trade to focus on shipping, distribution and warehousing.
Home to more than 2.3 million residents, Metro Vancouver has grown in recent decades to reflect a more diversified economy – incorporating a vibrant film, television and video game production scene within an established high-tech sector – along with a strong service economy comprising engineering, construction, financial services and legal firms. Along with tourism and niche manufacturing, the port continues to be a primary economic driver for the region, province and Canada at large.
The Metro Vancouver office market comprises almost 51 million square feet of space. The addition of more than 2.2 million square feet of new office supply in Downtown Vancouver since 2015 represented the most development in the submarket in more than two decades. Prior to that, Downtown Vancouver, which consists of 22.7 million square feet of office space, had posted one of the lowest vacancy rates of any metropolitan core in Canada for the past decade. Vacancy in suburban office submarkets varies but in general has a fundamental resilience to normal market fluctuations due to land-supply constraints and limited inventory. Lease rates in Downtown Vancouver are among the highest in Canada. A new downtown development cycle is commencing by year-end 2017 and will deliver at least 1.2 million square feet by 2022.
Retail space in Downtown Vancouver remains in demand but a lack of supply is impeding further investment in the market. Vacancy remains low with rental rates holding steady throughout Metro Vancouver. Luxury retailers are increasingly making their presence known in the Downtown core. Significant redevelopment and expansion of established shopping centres throughout Metro Vancouver continues unabated.
Metro Vancouver’s industrial market has an inventory of more than 197 million square feet. With regional industrial real estate activity primarily focused on growth in shipping, distribution and warehousing uses as a result of ongoing port investment, erosion of the region’s limited industrial land base remains an ongoing concern in Metro Vancouver. An overall lack of supply restrains deal and dollar volumes and contributes to some of the highest-valued industrial real estate in North America.
Investment in commercial real estate in Vancouver and British Columbia has exploded since 2015 when more than $2.67 billion was invested in industrial, retail and office assets (greater than $5 million), surpassing the previous record set in 2012 ($2.35 billion). A new investment record was established in 2016 when $4.1 billion in commercial assets changed hands, including the first $1 billion+ transaction in BC history. Investor demand for all commercial real estate asset types remains exceptionally strong and demonstrates the presence of a mature, well-balanced market. A shortage of available quality product further restricts investment flow as institutional and private buyers alike covet the strength and safety of the Vancouver commercial real estate market.