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Office space and office building development


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#161 spanky123

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Posted 26 February 2015 - 06:08 PM

Class C space in the urban core has never rented for anywhere near class A space at any point in time.

Atrium finished five years ago and lease rates were 2.5-3x what the finest class C was going for at the time.

What we're seeing is government going for class A space and vacating class C. Capital Park in James Bay will move a ton of government space into class A and Boardwalk at Selkirk is allowing government offices already there to expand (whole building is now leased by government tenants). The City of Victoria is likely to lease quite a bit of space at 1515, as will other government offices that have a need for more space or plan to move into a bigger space. Ironically all three of the latter projects are by Jawl. And then there's Argus on Fort that was fully leased to a government outfit before construction began, and the tenant there vacated class C.

Meanwhile the one all private project, Midtown by Andrew Sheret, isn't doing nearly as well and Harbour Landing in Vic West fizzled away.

We can expect class A rates to hit $35-$45 per square foot with the new stock, easily, while class C is holding steady at $5-$15.

 

5 years ago class C was $10 - $15 nnn, class B was $15 - $25 and class A was $25+

 

today class C is $0 - $5, class B is $5 - $15 and class C is $15+. The Andrew Sheret space is listed at $22 and there have been no takers from what I understand.

 

My point is that pricing has all shifted down one category. Now if your clients are Government then of course money doesn't matter. 



#162 Mixed365

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Posted 26 February 2015 - 06:13 PM

We did see commercial turn into office space at 601 Herald. Perhaps that's something to take into consideration for the commercial industry, office tenants moving into street level retail spaces. Of course office space tends to lease for far less than retail but ultimately a long term paying tenant is better than an empty storefront.

Just a heads up, "office space" is commercial property.


“To understand cities, we have to deal outright with combinations or mixtures of uses, not separate uses, as the essential phenomena.”
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#163 Mixed365

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Posted 26 February 2015 - 06:14 PM

Does anyone know how many commercial buildings there are in the CRD?

Are you curious about buildings that are entirely commercial, or both residential/commercial too?


“To understand cities, we have to deal outright with combinations or mixtures of uses, not separate uses, as the essential phenomena.”
- Jane Jacobs 


#164 Mike K.

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Posted 26 February 2015 - 06:27 PM

With all due respect those numbers are not in any way reflective of reality in downtown and the urban core. I lease class C and I'm well in excess of $10 NNN.

The CIBC is class B and it's leasing at $18-$22 NNN. 1405 Douglas is leasing the only available unit for $18 NNN and it's class B as well.

Andrew Sheret is starting at $22 NNN, which will likely be the least desirable space in that building. The upper floors will lease for around $30 NNN if not for more. At Uptown offices are leasing from $26 for years 1-5 and $29 for years 5-10. They'll crack $30 for desirable space, no doubt.

I still maintain that 1515 will be at around $35 NNN and possibly as high as $45 NNN. The tower component will no doubt be the most expensive office to lease in the whole region with perhaps the only direct competitor being Customs House.

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#165 Mike K.

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Posted 26 February 2015 - 06:29 PM

Just a heads up, "office space" is commercial property.


For the purpose of describing a space commercial most often identifies retail space and office identifies solely office space. You wouldn't refer to an office tower as a commercial tower, but you'd identify it's podium as commercial space.

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#166 Mike K.

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Posted 26 February 2015 - 06:41 PM

Further to my earlier post, a typical class C space is the building at Fort and Quadra. It's listed at $15NNN.

Harbour Landing in Vic West, a class A, according to Cush Wake's leasing data, was leasing between $23.50 and $45NNN. Obviously that's a moot point as the project never went anywhere but it gives an indication of where developers are targeting brand new class A rates. Andrew Sheret no doubt will be far north of $30 for the top floor, I'd now say.

I don't know where you're finding class C for $0-$5, B for $5-$15 and A for $15+ but it's not in Victoria, that's for sure.

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#167 dasmo

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Posted 26 February 2015 - 06:54 PM

I've seen the future and the future is shared office space. Watch for the growth of this downtown.

#168 Mixed365

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Posted 26 February 2015 - 07:11 PM

For the purpose of describing a space commercial most often identifies retail space and office identifies solely office space. You wouldn't refer to an office tower as a commercial tower, but you'd identify it's podium as commercial space.

Nope, commercial identifies any and all income producing real estate assets - this includes industrial, retail, rental apartments, office etc.

The ground floor is often called commercial, so it can be marketed as a variety of uses, say, as a small restaurant or a law firm. 
 


“To understand cities, we have to deal outright with combinations or mixtures of uses, not separate uses, as the essential phenomena.”
- Jane Jacobs 


#169 Mike K.

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Posted 26 February 2015 - 07:22 PM

I'm going to stick with nomenclature used by the industry and how it is reported by the media and in planning documents.

But yes, an industrial building and a rental residential tower may both be commercial assets, but they are not described as "commercial" for the purposes of planning or describing a piece of real-estate to consumers.

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#170 Mixed365

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Posted 26 February 2015 - 08:14 PM

I'm going to stick with nomenclature used by the industry and how it is reported by the media and in planning documents.

But yes, an industrial building and a rental residential tower may both be commercial assets, but they are not described as "commercial" for the purposes of planning or describing a piece of real-estate to consumers.

Don't be so sure. 

Hudson Mews (rental apartment) listed under commercial and Hudson/Victoria Public Market listed as commercial. 

Townline's website:

 

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“To understand cities, we have to deal outright with combinations or mixtures of uses, not separate uses, as the essential phenomena.”
- Jane Jacobs 


#171 Coreyburger

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Posted 26 February 2015 - 08:42 PM

Does anyone know how many commercial buildings there are in the CRD?

 

The only source for a comprehensive look is BC Assessment. I have played with some of their data but that was as a CRD employee, so can't really share it. No idea what they would release to the general public.



#172 Mike K.

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Posted 27 February 2015 - 08:14 AM

Don't be so sure.

Hudson Mews (rental apartment) listed under commercial and Hudson/Victoria Public Market listed as commercial.

Townline's website:

That's because of the commercial ground floor, not the rental units or the condo units above those buildings. The public market is commercial space.

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#173 spanky123

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Posted 27 February 2015 - 06:03 PM

Further to my earlier post, a typical class C space is the building at Fort and Quadra. It's listed at $15NNN.

Harbour Landing in Vic West, a class A, according to Cush Wake's leasing data, was leasing between $23.50 and $45NNN. Obviously that's a moot point as the project never went anywhere but it gives an indication of where developers are targeting brand new class A rates. Andrew Sheret no doubt will be far north of $30 for the top floor, I'd now say.

I don't know where you're finding class C for $0-$5, B for $5-$15 and A for $15+ but it's not in Victoria, that's for sure.

 

You can ask whatever you want to lease your space. As I have said before, there are some property owners that are quite happy to have their property sit vacant for years over $.50 / sq ft. Right now there are lots of owners that need to generate cashflow and anything is often better than nothing. My friends in commercial real estate tell me that there are no new businesses of any significance taking space in Victoria, all that we are seeing are tenants moving between buildings. If you have vacant office space now you could be waiting years to lease it unless you are willing to be aggressive.

 

For tenants looking for class B for 3 -5 years and not requiring TIs then I maintain that you can have the pick of the litter at $5 - $15 a sq/ft right now. If you have an existing lease then you should be asking for 25%-30% discounts for renewals in my opinion. It sucks if you are a building owner.



#174 Mike K.

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Posted 27 February 2015 - 06:28 PM

My class C lease increased by 20%.

An opinion is one thing, reality something else entirely.

Of course a landlord with an empty building is motivated but few buildings in the downtown core are empty. Victoria is run by old money with paid off assets. Like Paul Lacterman beside Era, he'll carry an empty space until it leases. And eventually it will.

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#175 Mike K.

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Posted 06 May 2015 - 03:34 PM

Mystery solved. It's web design firm Metalab Design that is moving into the space formerly occupied by Spank Clothing on lower Yates across from Lucky Bar.

 

I guess Metalab purchased the unit from Lefevre and Co.

 

metalab-1.jpg

 

metalab-2.jpg

 

metalab-3.jpg


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#176 Mixed365

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Posted 14 May 2015 - 08:32 PM

Mystery solved. It's web design firm Metalab Design that is moving into the space formerly occupied by Spank Clothing on lower Yates across from Lucky Bar.

 

I guess Metalab purchased the unit from Lefevre and Co.

What leads you to believe they purchased it over renting?


“To understand cities, we have to deal outright with combinations or mixtures of uses, not separate uses, as the essential phenomena.”
- Jane Jacobs 


#177 Mike K.

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Posted 14 May 2015 - 09:17 PM

Chris Lefevre told me he sold it.


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#178 Mixed365

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Posted 18 May 2015 - 08:22 PM

Chris Lefevre told me he sold it.

If he sold it to Metalab, wow. Very cool. 


“To understand cities, we have to deal outright with combinations or mixtures of uses, not separate uses, as the essential phenomena.”
- Jane Jacobs 


#179 gumgum

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Posted 19 May 2015 - 08:12 AM

High tech employees want to be downtown. I'm hearing that a lot from high tech friends.

#180 Mike K.

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Posted 19 May 2015 - 08:19 AM

You mean they don't want to be at ex-mental health treatment facility out in the woods?


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