Allied REIT has entered into an agreement to purchase the Sun Tower, located at 100 West Pender Street in the trendy Crosstown area of Vancouver.
The Sun Tower is a heritage building with a gross leasable area of 81,590 square feet. The building was fully renovated and leased up in 2009.
Richmond continues to attract companies based on its centrality within the Metro Vancouver region, as well as its accessibility to transit and the Vancouver International Airport. The outlook for the Richmond office market remains optimistic due primarily to two factors which have only recently affected the area:
There has been no new supply in the Richmond submarket since the introduction of 211,000 square feet of supply in 2008. Furthermore, no new supply is anticipated over the next 2 years. Given ongoing population and employment growth, Richmond’s relatively affordable office rents will appear increasingly attractive.
The completion of the Canada Line in 2009 greatly increased Richmond’s accessibility not only to the City ofmVancouver, but within the entire region. With 4 centrally located stations, the line is an important piece of infrastructure that will benefit the Richmond office market, particularly those buildings located in and around the City Centre area.
Richmond’s overall office vacancy rate was 21.2% in Q1 2011, down slightly from the previous quarter. Ongoing vacancy has persisted in large part due to low levels of leasing activity combined with new suburban product.
For strata office sales, there are basically two markets: suburban office parks, and urban office buildings in the City Centre area. These two groups exhibit very different pricing, but both are increasing at a steady rate.
One of the more land constrained markets in the Lower Mainland, there has not been a lot of opportunity for new multi-family residential development in West Vancouver over the past several years.
With the exception of some standing inventory in two small lowrise and townhouse projects, there are no actively selling projects. However, there are several large scale developments in various stages of planning and approval.
These include:
None of the above projects are straightforward development processes from an approvals standpoint. This combined with West Vancouver’s notoriety as a difficult municipality to deal with the public may push out the timelines that projects are delivered to market.
This dearth in new supply on the horizon is pushing sales prices well above $800 per sq ft in most locations. The lack of opportunity to live in West Vancouver on an affordable basis is likely to reinforce pricing for the foreseeable future.
Despite being a highly attractive destination for end users, many developers do not even place West Van on their radar due to the lack of opportunity and a negative perception in getting projects approved.