With a mission to inform, empower, celebrate and advocate for British Columbia's current and aspiring business leaders, BCBusiness go behind the headlines and bring readers face to face with the key issues and people driving business in B.C.
Issue link: http://digital.canadawide.com/i/1406705
in the works. Both say there's a lot of inter- est in their developments, which have the advantage of being close to the major mar- kets of Vancouver and Burnaby. Oxford, the property arm of the Ontario Municipal Employees Retirement System ( OMERS), is doing a two-storey project in its Riverbend complex, a 60-acre master- planned business park on the Fraser River in Burnaby. "Finally the rents are high enough to start going vertical," Miller says. "And e-commerce is willing to pay for great locations close to population." It costs two- and-a-half to three times as much to build multistorey, so those higher rents have been critical to making the equation work. To the west, Wesbild is going up to six storeys with Marine Landing, south of Marine Drive near Main Street in Vancou- ver. "We see this as the way industrial users are moving," says senior vice-president Lil- ian Arishenkoff. "They don't want to be in a suburban tilt-up." Being close to a rich pool of labour that can get to work by transit is important to many industrial operators, too. Arishenkoff's team has spent some time working with potential clients on what they can and can't do if they're in an upper-floor space. No to car repair. But yes to furniture manufacturing. One more trend that observers in B.C. are watching carefully: the conversion of anchor-tenant space in some struggling malls into logistics and distribution centres. That phenomenon has been popping up here and there in the U.S., as department- store anchor tenants join the endangered- species list even though midlevel retailers are doing well. Some companies are inquir- ing about it here, but it's a less feasible option in Canada. Eric Carlson, founder and CEO of Vancouver-based powerhouse Anthem Properties Group, says he's looked at the concept but doesn't feel like it will work for anything he owns. Unlike those in the U.S., malls here tend to be relatively more successful because they were never as over- built. Canadian malls are also more embed- ded in urban areas, not at the intersection of two interstates, so truck traffic and other issues would be harder to work with. Still, others are considering it. "A lot of the anchors are having trouble finding their way in the post-Amazon world," says Graeme Silvera, former VP of development for Montreal-headquartered Ivanhoé Cam- bridge, a significant mall owner, and now an independent consultant. "Some [mall owners] are looking at logistics, some at breaking them up to smaller boxes." T H E H Y B R I D W O R K M Y S T E R Y If there's a cliff-hanger in the popular ongoing series Vancouver Real Estate Tiger King Crown Gambit, it's what will happen as work patterns change—or don't—after the pandemic. Millions of anecdotes are blooming in the social media world about who's doing what, along with statistical reports attempt- ing to discern a pattern among early signals. Advocates for the various future solutions—the commercial brokers for the traditional office spaces, the remote- work cheerleaders—are fervently argu- ing their case in public, adding to the muddled picture. So you hear it all. Downtowns will roar back. No, the suburban office mar- ket will take off. No, employees will now work everywhere around the world. Or: Subleasing is on the rise as companies try to bail out of their commitments. No, companies are taking them back as they decide to hang onto space. And: Every- one is moving out of the city. No, they're just moving a little farther out, but not that far. A nd wh at Va ncouver's ever- expanding technology industry—which grew by 36 percent in the past five years and whose talent infrastructure now ranks 11th in North America—will do is crucial. Typically, tech companies have wanted to be downtown or nearby, because that's what their urban-loving, bike-riding, brewpub-visiting employees have wanted. And they've said it's important to be together in person for collaborative inno- vation. But tech is also an industry where remote work is 100-percent feasible. If downtown ceases to be the mag- net it now is, that could spark significant restructuring in the whole region. That's what a rather dire report from the Vancou- ver Economic Commission concluded last December. "Vancouver's downtown core, or central business district, is particularly at risk of decreased economic activity post- COVID due to accelerating trends shifting the spatial characteristics of work, includ- ing shifts to remote work, potential shifts towards satellite offices, shifts to remote learning and increases in online shopping, as well as the downstream effects these changes will have on downtown service- industry businesses." Certainly, some developers see that the way of the future for them is mixed-use projects outside the central city, where people will be living and working in differ- ent ways than the 20th-century model. The suburbs have been changing for decades; the pandemic emphasized their transfor- mation. "Mixed-use is an ongoing trend," says Carlson at Anthem, which is devel- oping such projects in the places that are evolving into much more complex urban pieces of the region, from Burnaby and Coquitlam to Squamish and Chilliwack. But no one knows exactly how big the R E A L E S TAT E R E P O R T 2 0 2 1 OUT OF OFFICE Dallas Fontaine, founder of The Perk Services, ditched his com- pany's Gastown space during the pandemic 40 BCBUSINESS SEPTEMBER/OCTOBER 2021