Anthem Properties recently announced the acquisition of the BC Electric Building, a 119,334 square foot office building located at in intersection of Hastings Street and Carrall Street.  The price was undisclosed.

Valuations for office buildings in Burnaby have risen over the past ten years amid declining cap rates and rising rental rates. The average value for office building sales in the past two years has been hovering around $200 / SF.

This market is predominantly characterized by larger office complexes, interspersed with smaller local office and strata business park office. Newly built buildings in the core areas such as Glenlyon office park and Canada Way corridor have achieved values over $250 / SF, with older product in local residential areas and industrial areas reaching below $100 / SF.

Cap rates have generally decline from an average above 8.0% to decline below 6.50%; a trend consistent with other suburbs in Vancouver.

Investment activity in this market has been relatively constrained given a lack of available product. As we reported in July, Bosa acquired a sizeable office asset located just off Canada Way at Sperling Avenue, for $33,000,000.

In terms of new supply, Metrotower 3 is currently under construction and is expected to complete in 2014. The leasing market remains in favour of tenants with a reported Q2 2012 vacancy rate of 11.2% (source: Colliers).

A 7-storey office building at the corner of West Pender and Hornby has sold for $20,300,000, or $495 per sq ft. The 41,000 sq ft building was built in 1968 and had been marketed for sale in early 2012.

The purchaser was a local investor. The top floor has been vacant and can be renovated to allow use as office space.