A person wearing a face mask to curb the spread of COVID-19 walks over a pedestrian bridge on False Creek, in Vancouver, on Friday, April 2, 2021. THE CANADIAN PRESS/Darryl Dyck

Increased office vacancies offer chance for growing companies to expand

Some companies are preparing for staff to never return, particularly in the tech sector

When COVID-19 began spreading across Canada, the newly formed Broken Heart Love Affair creative agency had set up in a Toronto lightbulb plant-turned office building originally built in 1908.

Now celebrating its first anniversary, the agency is seizing a chance to to leave behind the exposed brick walls and industrial-style ceilings staff fell in love with — not because they’re working remotely, but because the time is right to lock in a deal.

“Frankly, we’ve outgrown it already, so we actually need to find more space … but we are looking at the right time,” said Beverley Hammond, a partner and chief business officer at the agency, which is hiring so much that it’s run out of room.

A number of growing companies are searching for new offices even as the pandemic has forced closures and downsizing elsewhere.

Some businesses are shifting to larger offices months or years before they anticipate outgrowing their current locations. simply because market conditions are so favourable. With more commercial space available, prospective tenants have gained negotiating power.

“There are a lot of companies right now that are accelerating through this challenge,” said Jon Ramscar, Toronto downtown managing director for commercial real estate company CBRE.

The national office vacancy rate climbed to 13.4 per cent in the fourth quarter of 2020, CBRE reported. That’s the country’s highest available amount office space since 2004.

That grew to 14.6 per cent for the first quarter of 2021, up from 10.3 per cent at the same time last year, which covers the period before the worst of pandemic’s economic effects hit.

Some cities appear to be coping: vacancy rates in Vancouver, Waterloo and Ottawa rates were as low as 6.3, 9.3 and 9.6 per cent respectively for the first quarter. But in Alberta, where the devastated oil industry combined with the broader downturn, more than one in four Calgary offices and one in five Edmonton properties remain vacant.

Toronto’s 12.4 vacancy rate is double what it was a year ago — and up from 10.9 per cent last quarter.

While continuous shifts in COVID-19-related public health measures make it difficult to offer an outlook for the sector, Ramscar says the gradual reopening of the country will lead to decreased rates in areas like Toronto.

It’s not clear how long remote work practices will continue and much of the vacant property is available through subleases. It “could cool off the market very quickly if companies decide they want their space back as they explore cost mitigation strategies,” Ramscar warned.

Wojtek Dabrowski, managing partner at Provident Communications Inc., was quick to act early in the pandemic when there was a shift to people working from home and he learned of an available space twice the size of the firm’s current office in the same building.

Dabrowski reached out to the landlord, who agreed to make a deal.

“We said we’re not going to pay you full rate, because we’re just not in the office day to day … but we think that there’s a way to work this out if you’re open to negotiating a little bit,” he recalled.

While Dabrowski and his colleagues weren’t in the office during the pandemic as much as they were prior, he was confident the team would want to return when vaccination is widespread and restrictions ease.

Some companies are preparing for staff to never return, particularly in the tech sector. Shopify Inc., Twitter Inc. and OpenText Inc. are keeping some offices, but launched permanent work from home policies during the pandemic.

Broken Heart Love Affair says the collaborative nature of its business makes in-person work attractive. A staff survey found the majority were eager to be back in a space together as soon as the pandemic allows.

Hammond, however, is warning workers that the larger space they settle into when the agency’s lease is up in July might not be what they’re used to, though they are looking for places with character like its current location.

Hammond says there’s a good chance they’ll set up in a former store, restaurant or bar because those are among the most available locations.

She envisions converting any of those kinds of properties to a working area and perhaps, offering space to clients.

While her hunt has only just begun, she’s excited about the possibilities.

“There’s going to be a lot of vacancy in retail and maybe there’s a way that we can start to bring some life back.”

Tara Deschamps, The Canadian Press

Coronavirus

Just Posted

A young Sicamous Canada Day parade-goer is awed by a colourful float filled with beloved Disney characters during the July 1, 2020 community event. (File photo)
Editorial: Now is the time for Sicamous to shine

Shuswap community might be just what people who work from home are looking for

Greyhound Canada announced May 13 it was closing operations permanently after more than a century of operation. (Black Press file photo)
COLUMN: Goodbye to a never forgotten friend

Greyhound bus trips played a big role in columnist’s life

The BC Conservation Officer Service (COS) handed out fines to two anglers on Shuswap Lake who were both casting more than one line, in violation of provincial regulations, Saturday, May 15, 2021. (COS photo)
Conservation officers snag Shuswap anglers for unlawful fishing

Two anglers were given $150 fines for casting two lines at once, against provincial regulations

The future of the Okanagan Lake watershed land use will be subject of a new study supported by a $300,000 grant from the Vancouver Foundation. (Contributed)
Grant to help develop Okanagan Lake protection strategy

Study receives $300,000 grant from the Vancouver Foundation.

As they carry out a FireSmart assessment in Salmon Arm, firefighters Carmen Guidos and Steve St. Denis show one of the easy-to-rectify fire hazards that can exist for unsuspecting residents. (Martha Wickett-Salmon Arm Observer)
Column: Lessons on welcoming a wildfire into your home

The View From Here by Martha Wickett

Daily confirmed COVID-19 cases reported to B.C. public health, seven-day rolling average in white, to May 12, 2021. (B.C. Centre for Disease Control)
B.C. preparing ‘Restart 2.0’ from COVID-19 as June approaches

Daily infections fall below 500 Friday, down to 387 in hospital

A man and woman, both 33 and from Kelowna, were arrested on Postill Lake Forest Service Road in possession of two stolen vehicles Friday, May 14, 2021. (File photo)
Kelowna duo arrested with stolen vehicles after ‘brief’ bicycle getaway attempt

A man and a woman were arrested on a forest service road on numerous pending charges

On Friday, May 14 at Meadow Gardens Golf Club in Pitt Meadows, Michael Caan joined a very elite club of golfers who have shot under 60 (Instagram)
Crowds at English Bay were blasted with a large beam of light from an RCMP Air-1 helicopter on Friday, May 14. THE CANADIAN PRESS/Marc Grandmaison
Police enlist RCMP helicopter to disperse thousands crowded on Vancouver beach

On Friday night, police were witness to ‘several thousand people staying well into the evening’

Lynda Saundry, born 1961, is charged with the murder of North Okanagan resident Barry Jones in July 2020. Saundry will appear in Vernon court May 17, 2021, to fix a date for a preliminary inquiry. (Facebook public photo)
North Okanagan murder suspect to be tried by judge and jury

Lynda Saundry is charged with the first-degree murder of Barry Jones in July 2020

Vernon Search and Rescue’s Legacy vessel is returning to Okanagan Lake for boating season, the society said Friday, May 14, 2021. (VSAR photo)
Vernon Search and Rescue vessel returns to Okanagan Lake

VSAR’s Legacy is back with a fresh coat of paint and some other upgrades

People shop in Chinatown in Vancouver on Friday, February 5, 2021. THE CANADIAN PRESS/Jonathan Hayward
Vancouver community leaders call for action following 717% rise in anti-Asian hate crimes

‘The alarming rise of anti-Asian hate in Canada and south of the border shows Asians have not been fully accepted in North America,’ says Carol Lee

Sinikka Gay Elliott was reported missing on Salt Spring Island on Wednesday, May 12. (Courtesty Salt Spring RCMP)
Body of UBC professor found on Salt Spring Island, no foul play suspected

Sinikka Elliott taught sociology at the university

The first Black judge named to the BC Supreme Court, Selwyn Romilly, was handcuffed at 9:15 a.m. May 14 while walking along the seawall. (YouTube/Screen grab)
Police apologize after wrongly arresting B.C.’s first Black Supreme Court Justice

At 81 years old, the retired judge was handcuffed in public while out for a walk Friday morning

Most Read