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Vancouver’s commercial real estate action tilts east

Mount Pleasant and the False Creek Flats lead development as high tech and medical sectors reshape the direction of office space in the city

On the eastern edge of downtown Vancouver, the redevelopment of the former Canada Post site on Georgia Street signals what is being seen as an eastward migration of Vancouver’s commercial real estate.

The Post, by QuadReal Property Group, which completes in 2022 incorporating the old post office into a mammoth mix-use of retail, residential and office towers, has seen U.S. tech giant Amazon take all 1.07 million square feet of office space.

This is more pre-leasing than in the 15 other downtown office towers underway, combined.

East of downtown, the first of nearly a dozen new proposed office projects is complete in Railtown. Across the viaduct into East Vancouver, Strathcona is seeing a development boom, Mount Pleasant is welcoming an explosion in new construction near the new SkyTrain Broadway extension and, in the 450-acre False Creek Flats, developers are staking office sites as the largest medical project in Canada begins construction.

“Vancouver-Broadway is the busiest market in Metro Vancouver in terms of the number of projects underway and/or proposed with nine developments scheduled to complete by 2022,” Avison Young confirmed in its mid-2021 Metro Vancouver Office Market Report. Office construction is located in four nodes: Mount Pleasant, the emerging City Hall District, Railtown and the False Creek Flats.

New office development in these former industrial areas includes light industrial/creative space. A number of new office projects were announced in the first half of 2021, including Kaslo at Renfrew District on East Broadway and the 10-storey, 190,000-square-foot T3 Mount Pleasant, the tallest mass timber office building in Western Canada.

Biotech firm AbCellera Biologics Inc, is currently building its “global headquarters” on 4th Avenue, two blocks from the East Vancouver border, with a block-big tech campus of 380,000 square feet in partnership with the Dayhu Group and Beedie. The facilities are expected to be completed in 2023 and 2024.

Just blocks away, games company Relic has completed a new 43,000-square-foot office building and tech giant Hootsuite is finishing a 60,000-square-foot complex.

In Railtown, a former heavy-industrial enclave northeast of downtown, a city zoning change in 2017 has led to a rush of building proposals. It is estimated that up to 11 projects could proceed with offices and light industrial within a tight four-block area.

In Strathcona, where a vacant 0.21-acre commercial lot on East Pender Street sold in September for $3.35 million, office space will be merged into the new 63,000-square-foot mixed-use project being built by Fabric and Hudson.

Further east near Clark Drive, the sale of two old Powell Street industrial sites raised eyebrows in September when they sold for $24.3 million, the equivalent of more than $15 million per acre.

In between these centres is the emerging new epicentre for Vancouver office development: the 450-acre False Creek Flats, which the city has dedicated as a workspace zone.

Anchoring the Flats is the new St. Paul’s Hospital and Medical Campus, a $2.1 billion project that the B.C. government claims is the largest medical project in Canada. Site preparation began this spring and the campus will complete in 2027.

Right next door to the new hospital, Keltic Canada Development has started the 10-story Class AAA Nexus medical tower where 59,000 square feet of offices will be sold as strata.

Michael Buchan, who is leading a four-person Avison Young sales team selling the space, expects many medical professionals who currently have offices near the 125-year-old St. Paul’s hospital on Burrard Street will move east to the Nexus.

The Flats are already attracting other big players, setting the area up as a leading medical and tech centre in Canada.

Precision NanoSystems Inc.’s revealed August 5 that its new headquarters and $50-million biomanufacturing facility, to be completed by the end of 2022, at 1055 Vernon Drive within the False Creek Flats area.

Vancouver-based AbCellera Biologics Inc. announced in June it will build a new 130,000-square-foot facility specializing in the production of therapeutic antibodies in the 900-block of Evans Avenue in the Flats.

Tech is also expanding into the Flats. When PCI Developments and Low Tide Properties bought the former Mountain Equipment Co-op’s new headquarters in False Creek Flats this year for $103 million ($917 per square foot), Burnaby-based video game giant Electronic Arts immediately leased the entire building.

East Vancouver’s total office inventory currently pales beside the downtown, but its future is looking brighter and bigger every day, commercial agents say.