Over the next 30 years, the Broadway Plan estimates that the population of the Broadway area will grow by up to 50,000 additional residents and that up to 30,000 homes and 42,000 jobs will be created. Major centres for employment will be situated close to transit, establishing an office node within what is anticipated to become Vancouver’s second downtown. Kirk Kuester, Executive Vice President of National Investment Services, and Arjen Heed, Senior Associate, both with Colliers’ Vancouver Brokerage group, share their thoughts on the next generation of office and retail along the Broadway Corridor and growth opportunities stemming from the Plan.
What are the current strengths of the Vancouver office market?
Kirk Kuester: The real estate market is very cyclical. It is becoming clear that we are shifting into a softening cycle as a result of the state of the economy, rising interest rates, and inflation. The impact of layoffs and downsizing, predominantly across the technology sector to date, is becoming evident based on the amount of sublease space coming to market. While we may see some softening in the short term, the long-term prospects for the Vancouver office market remain extremely compelling. With up to 75% of a company’s operating budget attributed to labour, recruiting and retention become major considerations in office space decisions. Vancouver will continue to enjoy the benefit of access to a large skilled labour pool, the ease of importing labour, the many compelling attributes of the city itself, and the Canadian dollar advantage.
Can you share an overview of the current state of Vancouver’s retail market?
Arjen Heed: There is a lot of desire to get into the Vancouver retail market, particularly from new groups coming from outside of British Columbia. The market has shifted since COVID, and tenants have had to adjust to new challenges. The biggest challenges for retailers are supply chain issues, staffing, and delays in permitting and construction. While there is a lot of desire from the tenant side to get into the retail market, these challenges, accompanied by a lack of available space along the Broadway corridor, have made it difficult for tenants to secure space.
In recent years, we have seen quick service and food users performing well. SkipTheDishes and DoorDash are helping small restaurants to expand their line of business. We’ve also seen an increased desire for medical and professional businesses to secure more traditional retail space. Fitness and activity-based uses have remained strong even though these businesses were more directly impacted by COVID.
Can you discuss the growth of the Mount Pleasant office market?
Kirk Kuester: The Mount Pleasant market has been validated over the last five years by way of a number of major occupiers making space commitments in the area, including Animal Logic, AbCellera, Best Buy, and Relic Entertainment, as just a few examples. Best Buy, for instance, relocated to the area to find smaller and more efficient premises and to be able to compete more effectively for labour. The Mount Pleasant market has also been validated by large capital commitments, with several major institutional and pension fund investors making investments in the area.
What gaps in the office market will the Broadway Plan fill, and how will it address these gaps?
Kirk Kuester: The gap has been in very dated planning and zoning guidelines that failed to account for growth projections for the city and the Broadway corridor, along with the massive infrastructure investment underway. There is now a very clear plan and rezoning pathway forward for every property situated within the Broadway Plan area in terms of how it will be developed and how it will be utilized. The Uptown area of Central Broadway is Vancouver’s second downtown; it contains major employers, such as City Hall, Vancouver General Hospital, and an abundance of health-related offices and research facilities, including the BC Cancer Centre. The Broadway Plan will affirm this area as a key office location in the region by providing opportunities for additional job space/density to leverage the amenities in the area as well as the rapid transit investment.
Looking at the Broadway Corridor today, what are the apparent gaps in the retail market?
Arjen Heed: The market is somewhat spotty right now, as more inventory is needed. The Broadway Plan will create focal points where the SkyTrain stations are. We have a preview of what this will look like with the area surrounding the Cambie Canada Line Station. A bigger population in the area and having mixed-use, office, and residential all within a short distance will make a huge impact, in addition to the new retail inventory available. Adding a residential component is invaluable and allows for the creation of a self-sustaining community; we have already seen clear examples of this throughout the Lower Mainland, whether it be Brentwood, Metrotown, Lougheed, or Surrey’s City Centre.
What does the Broadway Plan and resulting office node mean for the future of the workplace?
Kirk Kuester: Central Broadway/Uptown, in relation to Mount Pleasant, will have the ability to accommodate pure office occupiers in a clearly defined core office area, which will contain and be surrounded by amazing amenities, including retail, restaurants, transit, hotel space, and housing, as well as centres for education and health. The plan also supports the long-term planning and expansion of the Civic Campus, the VGH Campus, and the BC Cancer Centre. Uptown is envisioned to comprise the second-largest concentration of job space in the province; it will become a community in itself. Employers will be attracted to the area because of its central location and access to transit and amenities, and perhaps most importantly, the lifestyle employees will enjoy in relation to other office alternatives in the city. The workplace will evolve and will have to take into account this new core Broadway location and its many unique and compelling attributes.
What response to the Broadway Plan are you seeing among current retail landlords and occupiers in the Broadway area, and what does the future hold?
Arjen Heed: The biggest concern for landlords is positioning themselves for growth. Demolition provisions are becoming common because landlords want to have the flexibility to take advantage of the potential growth when the time comes. In the long term, it will be beneficial for everyone. The Broadway Plan, over the next 30 years, will create pockets of density throughout the Broadway corridor where people will have the luxury to live, work, and play within their community. PCI Developments will have one of the first projects in the area on Granville and Broadway, with a 39-storey mixed-use development featuring retail, grocery, office, and rental homes. A 30-year plan is a long time, but we’ll start to see these developments infilling soon.Read on renx