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

(Pixabay photo)
Morning Start: Scotland’s national animal is the unicorn

Your morning start for Friday, May 14, 2021

Phil Hotzon gets surprised with a brand new e-bike after family and friends raise money to replace his broken one (Amandalina Letterio/Capital News).
Friends and family rally to replace Kelowna man’s broken electric tricycle

After crashing his e-bike into Mill Creek, loved ones raised fundraised and replaced it

Young Federico “Fred” Lenzi. (Raymond Lenzi/Contributed)
Italian moved to Okanagan with hope; he ended up being sent to a WWII internment camp

Raymond Lenzi shares his grandfather’s story ahead of Canada’s planned formal apology to Italian-Canadians

City of West Kelowna. (Phil McLachlan/Black Press Media file)
City of West Kelowna sued over developer fees

Ironclad Developments alleges they didn’t get a chance to provide feedback on the fees

Doses of the Pfizer coronavirus vaccine are seen being prepared on Wednesday, May 12, 2021, in Decatur, Ga. Hundreds of children, ages 12 to 15, received the Pfizer vaccine at the DeKalb Pediatric Center, just days after it was approved for use within their age group. (AP Photo/Ron Harris)
One death, 60 new cases of COVID-19 in Interior Health

The death is connected to the outbreak at Spring Valley long-term care in Kelowna

Prince Rupert was one of the first B.C. communities targeted for mass vaccination after a steep rise in infections. Grey area marks community-wide vaccine distribution. (B.C. Centre for Disease Control)
B.C. tracks big drop in COVID-19 infections after vaccination

Prince Rupert, Indigenous communities show improvement

Jonathan Prest had to climb way up to the top of a dead red cedar tree to rescue a terrified cat, but he made it up and down successfully. (Facebook photos)
Tree cutter rescues cat stuck 100 feet up a dead and dried-out cedar

Jonathan Prest put himself in extreme peril to get a terrified cat out of a dangerous situation

KCR Migrant Support Worker, Javier, had an exciting day escorting his son Ian with him during ‘Take your Child to Work Day’!
KCR: Volunteering is being part of a whole

KCR Community Resources shares stories of its volunteers in a weekly column

The Greater Victoria School District continues to face backlash over its wording and approach to Indigenous learners in its 2021-2022 budget talks. (Black Press Media file photo)
School district’s approach to Indigenous learners leaves Victoria teachers ‘disgusted’

Backlash grows over ‘pattern of colonial thinking permeating the leadership’

Joyce and John Henderson were among 25 British Columbians named 2021 BC Achievement Community Award winners by the BC Achievement Foundation. (Martha Wickett-Salmon Arm Observer)
Salmon Arm couple recognized for their decades of contributions to community

Joyce and John Henderson receive provincial achievement award

Then-minister Rich Coleman, escorted by Victoria Police, makes his way to the east wing amid a protest blocking the legislature entrances before the throne speech in Victoria, B.C., Tuesday, Feb. 11, 2020. THE CANADIAN PRESS/Chad Hipolito
B.C. money laundering inquiry testimony ends today with reappearance of Rich Coleman

Responsible for the gaming file off and on from 2001 to 2013, Coleman been recalled after his initial testimony to the Cullen Commission last month

Cannabis bought in British Columbia (Ashley Wadhwani/Black Press Media)
Is it time to start thinking about greener ways to package cannabis?

Packaging suppliers are still figuring eco-friendly and affordable packaging options that fit the mandates of Cannabis Regulations

Colin Dowler rests in hospital recuperating from wounds suffered from a grizzly bear attack north of Campbell River. He was able to end the struggle by stabbing the bear in the neck with a knife like the one he is holding. Photo submitted
‘Bad-ass dude that took on a grizzly bear’ doesn’t let 2019 B.C. attack bring him down

Campbell River’s Colin Dowler gets on with his life as his rehabilitation continues

A bullet hole is seen in the windshield of an RCMP vehicle approximately 4 km from Vancouver International Airport after a one person was killed during a shooting outside the international departures terminal at the airport in Richmond, B.C. on Sunday, May 9, 2021. THE CANADIAN PRESS/Darryl Dyck
Meeting police chance to get sense of ‘frustrating’ gang violence situation: minister

Mike Farnworth met with police representatives Thursday following a recent spate of shootings

Most Read