Despite predictions that it could take several years for the commercial rental market in Vancouver to recapture pre-pandemic levels, the demand for commercial space for rent in places like North Vancouver has remained steady and growing.

Vancouver Commercial Office Market Defies Expectations

Vancouver and its surroundings have been standouts in the commercial office rental market thereby boasting North America’s lowest office vacancy rates. According to CBRE’s Canada Office Figures Q3 2022 report, office vacancy stood at 7.1% in Vancouver- a number supported by outsized improvement in the demand for commercial space for rent in popular suburbs like North Vancouver.

What is Driving Demand for Commercial Space for Rent Around Vancouver?

Job Growth

As a recent Globe and Mail article highlights, while office attendance remains 25-35% below historical norms, the economy is growing and this growth could offset some commercial vacancies. British Columbia added over 17,000 new jobs in December 2022, and the unemployment rate remains at a record low of 4.2%.

Technology and life sciences are two of the fastest-growing employment segments in Vancouver and both require commercial office space. Even for companies that have opted to provide flexible work arrangements, the need for a physical workspace will continue to drive demand for commercial office rental space through 2023 and beyond. 

Demand for Small Offices with Better Amenities on the Rise

It’s more than just large companies scooping up commercial office space for rent in Vancouver. Smaller companies are also taking advantage of rental opportunities in areas like Vancouver, North Vancouver, and Mount Pleasant with many upgrading their current leases for smaller spaces in more desirable buildings.

Remote and Hybrid Work from Home Models not Stifling Office Demand

Companies that gave up office space during the pandemic and those transitioning from remote working environments to hybrid are supporting demand for new commercial office leases as more workers return to at least part-time office attendance. However, companies are also cognisant that not all employees are eager to return to the office. There has been a discernible trend in companies seeking out commercial office rentals that appeal to employees based on desirable location, environment, amenities, or a combination of the three.

Renters are Prioritizing Quality Over Cost

While the overall outlook for commercial office space remains positive, new and existing tenants are focusing on quality such as better-designed buildings, modern spaces, and more amenities as they look to entice employees back to the office and attract new talent in a tight labour market. Evidence of recent increases in the cost per square foot of office rentals of some class-A Vancouver offices also confirms that companies are willing to pay more for better buildings. 

Top on the list of features previously budget-conscious tenants are now looking for include renovated buildings with modern finishings, prime locations, impressive views, natural light, and extensive amenities like gyms, cafes, and restaurants in or around the area of the building.

Outlook for Commercial Office Space for Rent in North Vancouver

With excellent access to public transit and parking, expansive views of the North Shore mountains and downtown Vancouver, plenty of options for outdoor breaks, and modern, amenity-filled buildings, offices in North Vancouver are uniquely situated to offer the services and environment commercial tenants and their employees want.

While vacancy rates in Vancouver are already low, especially compared to other Canadian markets, suburbs like North Vancouver are also in high demand. Overall commercial office vacancy in North Vancouver for 2022 rested at 4.3%

Throughout 2022, Lower Mainland suburbs such as North Vancouver experienced the most significant decrease in vacancy rates of any Canadian city, and this trend is likely to continue throughout 2023- particularly for prime commercial rental space, albeit at a slower pace.