Downtown Vancouver shakes off leasing slump
Top floors of City Hall fill; analysts expect that to help nearby buildings
Monday, July 16, 2012
Vancouver's downtown office real estate market may be in a slump. But expansions for tenants in the top two floors of downtown's newest office building could signal a change.
Apple Inc. and AHA!, two occupants of the fifth and sixth floors, are spreading out to take up more space in the glass and brick building that faces Esther Short Park with windows looking out over the Columbia River.
Experts say filling vacancies in the building at 401 W. Sixth St., one of the city's most upscale downtown buildings, could bode well for other properties.
"Now, it's going to help the other existing buildings. That's pure Real Estate 101," said Bob Bernhardt, a broker with Coldwell Banker Commercial Jenkins-Bernhardt & Associates.
Apple Inc. will nearly double its space, going from about 8,860 square feet to about 15,170 square feet of office space on the fifth floor, according to Linda Carlson, property management specialist for the city.
It is unclear whether the Cupertino, Calif., company, known for iPads, iPhones, and other computer devices, plans to increase its Vancouver staff. The company did not return calls Monday.
Apple Inc. moved into the building in 2008 with approximately 30 employees. It has maintained a Clark County presence for several years but has been unwilling to say much about the business unit because of its below-the-radar engineering mission.
City officials expect to generate additional revenue from the extra square footage being leased to Apple, an action approved by the city council last month.
Apple's agreement to lease additional space means the entire fifth floor will be occupied by tenants, including IGI, a natural gas broker, which leases about 3,000 square feet on the same floor.
Meanwhile, sixth-floor tenant Alling Henning Associates Inc. is preparing to spread out as well. The marketing and communications firm has expanded to take up nearly all the office space on the 18,200-square-foot sixth floor.
Tim Haldeman, the city's general services director, said CVTV, the city's public broadcasting television station, will keep its 600-square-foot office on the sixth floor.
Alling Henning Associates Inc., also called AHA!, confirmed in an earlier Columbian article that it plans to hire additional staff.
$22 per square foot
The newly leased space in the top two floors will bring in about $22 per square foot, Haldeman said.
With market leasing rates in the $20 per-square-foot range, companies are taking advantage of the somewhat lower rates now, said Roger Qualman, a Vancouver commercial real estate broker.
"They're planning ahead, trying to get those rates locked in," he said.
City employees moved last year into the first four floors of the building. It was originally built for The Columbian staff, which vacated the structure in late 2008 as part of a bankruptcy filing by the building's owners, Downtown Vitality Partners, which includes Columbian Publisher Scott Campbell.
The city purchased the building for $18.5 million from Bank of America.