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As the national office vacancy rate sat at about 16.2 percent at the end of November, demand for office space in downtown Vancouver remains much more competitive.
“We are seeing good, stable activity,” said Tamara Fuller, senior vice president at Capacity Commercial, going so far as to call the local office market robust.
“Buildings that are leased are still producing, and they’re meeting their performance,” Fuller added.
The office vacancy rate in downtown Vancouver is sitting at about 5.8 percent, said Andi Costello, a commercial real estate broker with Knipe Realty.
Over the past three years, companies have adopted work-from-home or hybrid work policies. That explains some of why the national vacancy rate, which was reported in December by Commercial Edge, is so high.
Meanwhile, companies are looking to get out of downtown Portland and relocate to Clark County, Costello said.
“If you live over here, like I do, you know this side is better anyway,” she said, smiling.
The Portland picture
The latest office market report from Kidder Matthews showed Portland’s direct vacancy rates rose to 11.1 percent at the end of the fourth quarter. The same report showed asking lease rates increased to $28.32 a square foot on a full-service basis.
The report also showed leasing activity in Portland was at an all-time record low, with only 574,000 square feet leased, which is down 35 percent over 2021.
With companies continuing to shrink their office footprints, the report read, sublease availability in Portland’s office market is at a record high with 2.36 million square feet available.
“We are definitely seeing more activity coming our way from the Portland area, particularly downtown,” Fuller said.
The future
Despite the COVID-19 pandemic, office space demand in downtown Vancouver has been constant.
“I would say that we didn’t have that many tenants go dark because of the last couple of years,” Fuller said.
The Murdock building at The Waterfront Vancouver was completely leased in 2020. That waterfront area did a lot for the local office market, Fuller said.
“It brought a lot of attention to the area,” she said. “It’s also pushed out rates.”
Those seeking office space in the area span industries — financial, engineering, medical, professional, legal, accounting and so on.
Costello said she expects more and more companies to go the way of Tesla and Disney and start requiring employees to come back to the office.
“I’ve always had a very strong feeling that the office market will rebound,” Costello said. Demand may not go back to where it was before the pandemic, but she said she does see it growing.
Still, Costello said it’s not difficult to find office space downtown if clients’ parameters are open, or they can take more time to find an ideal space.
Coming into the new year, Fuller is cautiously optimistic about downtown Vancouver’s office prospects.
“We still feel that we’re going to see a steady stream, which we already are, even at the beginning of this year,” she said
There’s construction underway, and Fuller has already had new outfits looking at spaces here.
“Overall, our market is sitting in a comfortable position for office,” Fuller said. “There’s still stuff out there, but it doesn’t sit as long as it used to.”
