While the tech industry in Vancouver has seen a dramatic growth over the past five years, like all things in real estate, nothing is guaranteed. And though we have many factors in our favour, there are some significant threats that could steer this industry away from the west coast.
According to Kraig Doherty, Director of Talent Programs and Hub Operations at BC Tech, “Seattle just sees Vancouver as an immigration landing page. They train employees here, wait for the U.S. permit to be approved, and then migrate them down south once they’re approved. We should be creating an environment that keeps talent here.”
Here are three major threats that our city faces in today’s tech industry:
1. Lack of supply and slow approval
When it comes to square footage, it’s no secret that Vancouver is in very short supply, but very high in demand. This becomes particularly challenging when tech giants like Amazon need at least 50-70,000 square feet to accommodate their staff.
“We are losing business because of lack of space,” said Gavin Reynolds, Executive Vice President at JLL. “We need clusters like the False Creek Flats for these companies to move in to.”
Since pre-existing buildings are difficult to come by, some tech brands have decided to take matters into their own hands by building their offices from the ground up. But taking this route isn’t without its obstacles – the most notable: permits.
“Amazon is just starting to break ground on [401 West Georgia Street]. It took ten years to get a permit,” said Steffan Smith, Director of Leasing at GWL Realty Advisors. “There are so many buildings in the queue behind us. It takes a long time get new space built.”
2. Lack of education and talent
“By 2021 there will be 30,000 empty positions in Vancouver,” said Reynolds. “Education plays a massive part in order to fill these roles. Currently we’re playing the catch-up game, with more grads in Ontario than B.C
Having only a small pool of professionals to choose from may be a deal breaker for companies looking to move north, deterred by having to recruit international talent. This would then have a domino effect, as Vancouverites will have to look outside of B.C. to work for big names in the industry.
3. Lack of marketing and promotion of our city
We’re not the only town that’s garnering new commercial real estate interest from the tech industry. Charlotte, Tampa Bay, Toronto, and Montreal are all vying for I.T. attention.
“We really need to market our city,” said Doherty. “Vancouver is just a beneficiary to these super-tenants. We have a lot of work to do.”
Reynolds agrees, saying that we are losing key business because we’re failing to invest resources in promoting ourselves.
“New York City is giving a $20 million tax break to companies that employ more than 2,000 people. For companies like Google and Facebook, this is huge. If a city like New York, who is notorious for real estate demand, is starting to promote themselves and offer benefits, we should be no different.”
Want to hear more from our experts? Head to our previous blogs for further reads on Vancouver’s tech scene and how it’s affecting commercial real estate.