The future of work and office trends in Vancouver
The debate on work-from-home and the office is nearly over, and the market is currently favourable to tenants.
The office market is in a continuous shift, evident from pre-pandemic conditions, through the pandemic era, and now into this post-transitional phase. Work-from-home standards have evolved within companies, and decision-makers are now seeking quality leases and sub-leases in central locations with top-quality amenities to entice employees to come back to the office — and it's working!
The future of work in Vancouver
The debate on work-from-home and the office is nearly over. Today, more and more companies are announcing new workplace policies aiming to get their employees back in the office more days a week. The hybrid model is here to stay, being a mix of both in-office and at-home flexible work. Over the past 12 months, there has been a slow but consistent trend of employees working from the office more and more days a week.
The High Technology Facilities Group (The HTFG) spoke with four of the largest landlords in downtown Vancouver, all suggesting the current occupancy levels in their office buildings are only 10-to-20 percent below pre-pandemic levels. So the debate is over: people are coming back, either to a hybrid model or full-time in the office.
The good news for employees is that C-suite leaders are focused on providing a high-quality office experience to ensure productivity is at its highest, and people actually want to come in. These offices include views, natural light, quality air, thoughtful office design with quiet meeting spaces, and amenities like gyms, showers, and social spaces (like rooftops or lounges).
The Q3 downtown office market key stats and trends
11.8 percent overall vacancy rate: A new record high equals great opportunities for tenants. It's worth noting that in Q3, vacancy rates only increased slightly to 11.8 percent from 11.5 percent in Q2. The majority of vacant spaces are in lower quality B and C Class buildings, whereas A and AAA class properties continue to lead the market and attract new tenants. Companies are taking advantage of this tenant-favourable market to upgrade their office by moving into high-quality buildings and significantly improving their workplace experience. This, in turn, leads to happier employees and encourages in-office attendance.
100 sublease listings: The number of active sublease listings increased slightly for Q3, however this figure has remained relatively flat since the start of 2023, ranging from 75 to 110 sublease listings at any one time. Subleases continue to be an attractive option for tenants, as they are typically furnished and at discounted rates — which creates a challenge with direct landlord leases, but is great for tenants in the market. Today, we are noticing quality furnished spaces are leasing more quickly, particularly if priced right.
165 full floor office spaces: We have not seen this many options for larger tenants looking for full floors, with sizes from 8,000 to 16,000 square feet. Ranging from discounted low-rent subleases to market high-rent floors with views in brand-new buildings, there are plenty of options for tenants in the market to choose from.
86 percent leased in new construction buildings: The newest completed office buildings in Vancouver have been rewarded. Tenants continue to move in, validating the ‘flight to quality’ trend. These new buildings offer an elevated first-class employee experience, which attracts top-tier companies investing in building beautiful office spaces — many designed with today’s flexible workplace strategy, hot desking, and more. The newest buildings include The Stack, 601 W Hastings, Bosa Tower, and others.
In summary, the current office market is a tenant-favourable market, meaning tenants have a negotiating advantage with most landlords. There are some great deals for companies considering new office space, but not all landlords are equally motivated or have the same vacancy issues, so it is important to explore the market and know where to look for all these unique opportunities.
If you are considering a new office space or would like more information on the current office market, contact Alain, Blair, Kevin or Andre from The HTFG.