For those involved in office leasing, it should come as no surprise that technology has outperformed all other industries in terms of growth, demand, and occupancy. Since 2014, the tech sector has grown at an impressive pace, adding 8,700 positions to our city. In order to attract top talent and clientele, high quality space has come at premium. In fact, new builds are in a very limited supply, particularly for large block requirements by tenants.
Now home to some of the biggest names in the business, it’s little wonder why Vancouver has been coined the ‘Silicon Valley of the North’. Hootsuite, Microsoft, Sony Pictures Imageworks, and Vision Critical are some of the largest employers in the city with a global reputation, and thanks to the current Trump administration, more could be on the way to set up shop on the west coast.
News 1130 recently reported that a number of large tech companies are looking at opening satellite offices here due to the current United States President, who is challenging H-1B visas. This would limit the number of foreign talent being able to work in the U.S. in favour of domestic hires. However, as 43% of tech company founders in Silicon Valley were not born in the States, relocation could become obligatory, rather than volunteered.
As Microsoft Canada President Janet Kennedy said, “We could have gone anywhere in the world, and we picked Vancouver.” With its ideal position closest to California, Vancouver would be the most logical place for these companies to move to over Toronto. Drawn to the mountains, ocean, and great outdoors, and the fact that they’d be surrounded by an existing tech community, demand for more office space could grow significantly in the near future. Ranked as the third most livable city in the world by The Economist, the fifth most tax competitive by KPMG, and one of the top 20 startup ecosystems in the world, it’s a natural choice for those who don’t shy away from expensive real estate.
Developers are trying to keep up with the pace, with the total potential office construction in the next two years spanning 4,144,000 square feet, which is 16.3% of the current downtown inventory and 27.2% of the current downtown A Class inventory. This surge of construction will create 27,2625 jobs, or 19.1% of the current jobs. But will it be enough?
“We’ve had a great ride, and whether the ride is over is still up for debate. We’ve got to make sure we’re keeping our minds open, and looking in other pond to fish for tenants,” said Jeff Rank, Senior Vice President at Quadreal, who oversees all leasing activity for BC office and industrial assets as well as pre-leasing activity for new developments.
In order to expand the ‘pond’, will organizations have to move out to the suburbs, or would it be more beneficial to renovate B and C class office spaces? Tweet @naiopvancouver and let us know!