Vancouver-based technology company Global Relay recently renewed its office lease in Gastown, making it the biggest office lease ever completed in the area.
Expanding from its initial 2,500 square feet in 2005 to a new space of 62,000 square feet, the new lease also reinforces Gastown—the original downtown Vancouver—as a burgeoning technology hub with competitive office space.
Earlier this year, Colliers International, which facilitated the deal along with landlord Talia Jevan Properties, signalled in its second-quarter office market report that tenant demand for offices in Metro Vancouver was mainly fueled by technology companies looking for unique character space that reflects their brand.
Although vacancy rates in downtown Vancouver are now higher than any time since 2005, rising to 9.3 per cent, Kevin McNaney, assistant director of planning for the City of Vancouver, says he’s noticed a demand for Gastown’s office space within the last three years.
“It really is becoming a strong and diverse local economy that’s translating into a high demand for offices,” he says. “We’re seeing a lot of the development community having a strong interest in developing in the area as Vancouver’s high-tech sector is growing so much.”
Colin Scarlett, senior vice president of Colliers International, says the area attracts young, creative types in the technology sector for a number of reasons: beautiful heritage buildings as opposed to office towers, close proximity to transit and the downtown core, and amenities like high-end restaurants, nightlife and coffee shops to name a few.
“It reflects their personalities,” says Scarlett. “It’s a different employee base looking for different things.”
Current spaces are mainly filled by architects and those in the film, editing and post-production industries. This past summer, technology giants Microsoft and Sony Pictures Imageworks announced they would open offices in Gastown’s Pacific Centre in 2015.
Even small start-ups that grew out of Gastown, such as Global Relay and HootSuite, which is now a significant global company, have decided to stay. “Many start-ups move into the area where space is a little cheaper and find they need more space as the company grows,” says McNaney.
But Scarlett says this growth indicates new challenges ahead for what was once a smaller tenant market. “There is only a finite amount of this creative type space that offers immediate access to transit and amenities,” he says. “The biggest challenge we will have going forward is accommodating that demand as the technology community matures. Once you reach a particular size in Gastown, it becomes really difficult to try and find space.”
From a planning perspective, McNaney says the future of Gastown lies in encouraging this growth while maintaining the integrity of its heritage as Vancouver’s first neighbourhood.
“There are still a lot of buildings we’re looking to revitalize,” he says. “There would be opportunities to create more room and build that local economy while protecting that important heritage fabric.”
Rebecca Melnyk is online editor of Canadian Property Management and Building Strategies & Sustainability .