Lululemon Athletica Inc. has secured additional office space in Vancouver with one of the largest lease deals on the downtown peninsula since 2018.
The apparel retailer is taking 120,000 square feet on nine floors at Burrard Place, developed by Reliance Properties Ltd. The deal is the largest commitment since Amazon preleased 1.1 million square feet at The Post in 2018.
“This transaction signals that large firms are committed to office space, which changes the pervasive pandemic narrative that cast into doubt the need for office space,” said Blair Quinn, vice-chair of CBRE Ltd., which brokered the transaction.
The deal gives Lululemon space just across the Burrard Bridge from its current headquarters on Cornwall Avenue in Kitsilano. Tenant improvements are in progress, with occupancy scheduled for late 2022.
Lululemon was not immediately available to comment on the arrangement. Sources declined to characterize the space as a new headquarters for the company.
In addition to Lululemon, Harrison Healthcare is also taking space in Burrard Place.
Lululemon’s commitment bears out early hopes for the project, which Reliance announced in February 2018.
Reliance previously enjoyed success with 60,000 square feet of strata space in an adjacent tower, but president Jon Stovell saw an opportunity to develop space for larger companies. The answer was a purpose-built office tower with 146,375 square feet.
“Space to meet the growth projections of large companies currently doesn’t exist in Vancouver,” he said at the time. “This is an era when developers like Reliance can build offices without any prelease agreements.”
While tenant demand softened during the pandemic as remote work arrangements took precedence, the return of in-person activities has led to increased leasing activity and confirmed Reliance’s initial confidence.
Downtown Vancouver office vacancies averaged 6.2% in the first quarter, according to CBRE, on par with vacancies when Reliance launched the project. Space under construction was two-thirds preleased at the time, creating constrained supply conditions.
This led to rising speculative development, a dynamic that’s reasserting itself.
Reliance, for its part, recently broke ground on 1166 West Pender, a 32-storey office tower being developed in partnership with Houston-based partner Hines. The tower features several amenities designed to appeal to a more collaborative and social work environment.
Similarly, Burrard Place office workers will have to access to 30,000 square feet of luxury amenities at One Burrard Place, a 60-storey residential building that is part of the Burrard Place complex.
In total, Reliance said it has more than a million square feet of commercial space in Vancouver and Victoria in various stages of predevelopment or construction.
