The commercial real estate scene in Vancouver has clearly been dominated by the celebration and opening of the Waterfront Project in August of 2018. First was the dedication of the Park, with its iconic mast and pier. Then came the opening of two fantastic restaurants, WildFin and Twigs. This was followed by a parade of high-profile office tenants, several of which relocated from the downtown core. With the buzz of ongoing announcements this past quarter for additional restaurants and tenants, the Waterfront seems to be on a steady pace to fulfilling the investor’s vision. It will be great to see what a full summer brings in terms of usage.
This leads to the question of how the core of Vancouver’s downtown has held up. Stepping back a bit to January of 2018, we’ve searched the transactions that have taken place in the past 16 months. We found that 131 leases were signed during this period, involving 60 different buildings and occupying 290,000 square feet. The vast majority were found to be new tenants, showing that there remains a clear steady demand for office and retail space in Vancouver’s downtown.
In the ramp up to the Waterfront opening, and in the months since, many smaller service-type businesses are locating with their eye on a thriving future. A more detailed look at the numbers reveals the average lease signing has been just more than 2,000 square feet. Ninety-four of those leases have been less than 3,000 square feet. Eleven were more than 5,000 square feet, with four being more than 10,000 square feet. The largest is a recent transaction at the Wolf Building, at 11th and Columbia, with DH Sales taking over the industrial warehouse space.
Several familiar downtown tenants shifted locations, but chose to remain in the downtown core. Holt Homes, Occuscreen, LLC, Harper Houf Peterson & Righellis, Gravitate Design, Navigate Law and Cascade Sotheby’s have all found the downtown vibe a great place to grow their companies. The Columbia River Economic Development Council (CREDC), after a concerted search effort, renewed for a five-year term at 805 Broadway, as did DiscoverOrg, and The Holland Partner Group. Newcomers, wanting to take advantage of the accelerating growth and urban environment, are Well Haven Pet Health and the New Day Academy.
Upcoming challenges for landlords are with several downtown office towers showing significant vacancy. Office lease rates appear to remain stable, yet prospective tenants seem to have concerns about ongoing homeless and transient issues, as well as parking remains high on everyone’s radar.
One of the most interesting properties is 911 Main, known as The Quinn, purchased by Cascadia Partners. They have secured a tenant for the entire third floor and anticipate tenant improvement work to begin later this spring. Having this building occupied again will give a nice jolt of momentum to the crossroads corner of Evergreen and Main.
The most active Brokers on both sides of landlord representation and tenant representation have been two of our local firms, Colliers International and Fuller & Associates.
As we move through 2019 into 2020, expect to see this ongoing transition continue and perhaps even accelerate. While not as glamorous as the Waterfront, the downtown district has become a much more “destination-oriented” location. It remains very affordable in rent structure with an expanding supply of amenities to provide both variety and convenience serving residents, visitors and business employees alike.
So, the clear answer to our query is a resounding YES! There is life after the Waterfront!
Jim West is with Jim West Commercial Real Estate and Zenith Properties NW, and is also the Board president of the Southwest Washington Contractors Association. He can be reached via email at email@example.com.