Smaller Office Spaces Dominate New Additions and Leasing Transactions
Mark Kurkdjian & Sukh Pannu | March 31st 2023.
Increased Supply in Downtown Vancouver
Downtown Vancouver's office market witnessed an increase in supply in March, as 99 new spaces were added within the past 30 days. While the number of new additions exceeded the leasing activity, which saw 55 spaces being leased during the same period, it showcased the area's capacity to accommodate a variety of businesses.
Trends in Leasing Activity: Smaller Spaces in Demand
The data reveals a clear trend towards smaller office spaces, as these units dominated additions and leasing transactions. In March, most of the leased spaces fell under the 2,000 square feet category, with 27 out of the 55 leased spaces within this range. This trend is consistent with the 38 new spaces added in the same category, indicating a strong demand for smaller office spaces suitable for startups and smaller enterprises.
Medium-Sized Office Spaces Remain Consistent
The next significant category in leasing activity featured spaces between 2,000 and 4,999 square feet, accounting for 17 of the 55 leased spaces. This segment aligns with the 26 new additions in the same range, demonstrating a consistent demand for medium-sized office spaces for growing businesses.
Larger Spaces: Limited Activity but Room for Growth
As for the larger spaces, eight leases were signed for units between 5,000 and 9,999 square feet and three leases for spaces between 10,000 and 19,999 square feet. Despite the limited leasing activity in these categories, 18 new spaces between 5,000 and 9,999 square feet and 17 new spaces between 10,000 and 19,999 square feet were added to the market, potentially catering to future demand for larger office spaces.
Absence of the Largest Spaces: A Shift in Focus
The March snapshot showed no new additions or leasing activity for spaces between 20,000 and 49,999 square feet or larger than 50,000 square feet. The presence of larger spaces indicates that the focus is currently on meeting the demand for small to medium-sized offices in the Downtown Vancouver market.
Conclusion: Catering to Small and Medium-Sized Businesses
In conclusion, amidst steady leasing activity, the Downtown Vancouver office market experienced a rising supply of new spaces, particularly in the smaller size categories. The data suggests that the market primarily caters to the needs of small and medium-sized businesses, with larger spaces taking a backseat for now. As the area continues to attract new enterprises, it is essential to monitor these trends to understand the evolving needs of the commercial property landscape.
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