A glut of new office towers being built in Vancouver may spell trouble for surrounding cities hoping to attract more jobs in their town centres.
An estimated 2.2 million square feet of new office space is already under construction in downtown Vancouver – enough to satisfy two decades worth of office demand at current absorption rates – and another 2.4 million square feet is proposed, according to Andrew Petrozzi, research vice-president for Avison Young.
It’s the fastest office construction pace seen in Vancouver in decades, Petrozzi told Metro Vancouver’s regional planning committee Friday.
But Burnaby Mayor Derek Corrigan warned the Vancouver office tower boom has serious implications for the rest of the region.
“This massive increase in office space in downtown Vancouver is probably going to suck the air out of any aspirations there are within suburban communities to build up their office space to create jobs closer to the residents in those areas,” he said.
Coquitlam Mayor Richard Stewart said it’s already a problem in his city – even before the newest Vancouver towers come on line.
SkyTrain will arrive in Coquitlam Centre in about 16 months when the Evergreen Line opens, plugging the area into an immense market of workers who could ride transit to offices there, just as transit carries office workers to towers near Sapperton Station in New Westminster and Gateway in Surrey.
But he said developers have so far shunned office buildings for condo towers.
“We can’t get a business tower – an office building – constructed because there’s simply too much oversupply downtown,” Stewart said. “Then we hear millions of square feet are being built downtown.”
Instead of a two-way transit flow on the Evergreen Line, he said, it will be mainly one way out to jobs in Vancouver and elsewhere.
Stewart said Metro must grapple with the problem or else “we’ll end up with bedroom communities that are high-rises instead of the bedroom communities we had 50 years ago.”
One of the key goals of Metro Vancouver’s regional growth strategy is to build complete communities throughout the region where people can live and work, Corrigan said, adding an excessive concentration of office space in Vancouver undermines that strategy and is irresponsible.
“How do we get complete communities if all that growth is concentrated in the downtown core?” Corrigan asked. “We’re going to compound an already problematic situation for municipalities around the Lower Mainland.”
Corrigan said the office increase in Vancouver has transportation implications as well, because “we keep sending people to the small end of the funnel.”
Vancouver Coun. Andrea Reimer responded that a few years earlier Vancouver was being slammed as irresponsible because too few office buildings were being built to accommodate future forecasts.
Metro planners say different types of tenants are typically interested in different parts of the region, so a diverse supply is good.
Petrozzi noted in the past 15 years there was virtually no office development in downtown Vancouver, calling it a case of playing catch up there to some extent.
His projections call for Vancouver office vacancy rates to shoot up from very low levels to as much as 14 per cent over the next few years as new buildings open.
More than half of the 74 million square feet of office space in Metro is in Vancouver. Sixty per cent of office space is near a rapid transit station.