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.

A commercially designated site near Lougheed and Willingdon in the Brentwood town centre area has sold.

4488 Halifax Street is a 18,299 sq ft site that is located mid-block on Halifax Street west of Willingdon Avenue.

The property, which has been vacant for several years, sold for $3,313,000. Previous development inquiries for the site included office & commercial schemes at densities up to 6.0 FAR.