At the corner of W. Hastings and Seymour in downtown Vancouver, the first few floors of a major new 25-storey office tower are underway.
To the north it is connected to a 1980s-era, 17-storey office tower at 333 Seymour. That building is undergoing a major renovation at the podium level to add more office and gathering spaces.
Both are centrally located, across from the major transit hub that is the Waterfront Station.
PCI Developments’ latest projects have office, residential strata units and residential rental units underway. Providing the impact of the current COVID-19 crisis doesn’t hit too deeply, for too long, the projects seem to be coming online at a good time.
Downtown Vancouver office space is tight; the residential condo market should get a boost from the plummeting interest rate; and the residential rental market has seen increased demand, thanks to a new tech workforce and the ultra-low borrowing rate.
“Things look great, aside from the Coronavirus effect in the last 10 days or so. We feel pretty confident,” said Jarvis Rouillard, PCI vice-president, acquisitions and leasing.
PCI Developments and 601 West Hastings
Leasing for 333 Seymour is complete, with major tenant WeWork occupying seven floors for 1,178 co-working desks.
However, 601 West Hastings has yet to be pre-leased, and Rouillard is sufficiently confident in the location and striking design of the new tower that he isn’t concerned.
“We proceeded on that one without any pre-leasing, given the exceptional location of our complex.
“In this market, there’s no question it allows you to sit back and not be as concerned maybe as in other markets — where if you are approaching completion and you don’t have any tenants, maybe there is cause for concern,” Rouillard observed.
“But, we are over a year out from construction completion, and there is very, very limited existing space options for tenants who are either looking to come to the market as new entrants or looking to relocate and expand.
“So we feel really confident that 601 will be a solution for a lot of them.”
King George Hub in Surrey
Rouillard says he takes pride that his “lean” company can deliver a complex project like 601 Hastings on schedule.
PCI, which has fewer than 30 employees, is also bringing the massive four- or five-phase King George Hub in Surrey to completion on time. The complex is part of Surrey’s growth spurt as B.C.’s second largest city, with a rapidly expanding downtown core.
PCI is delivering more than 760,000 square feet of office and retail space, as well as 1.2 million square feet of residential to the new downtown.
Phase A of the Hub is a completed office building for Coast Capital Credit Union. It is being followed by Phase B, two towers that include 738 units of strata condos that sold out three years ago within the space of a month.
Phase B includes a 165,000-square-foot, 15-storey office tower that is 80 per cent pre-leased, with 100,000 square feet of retail anchored by Save-on Foods.
‘We have strong interest on that one,” said Rouillard.
Phase B is under construction and scheduled to complete in the fall of 2021.
Because purpose-built rental is in high demand, work has already begun on Phase C to the east of the Coast Capital Savings public plaza.
The tower will bring 371 residential rental units online, scheduled for completion by early 2022.
Phase D is a significant condo component PCI hopes to market by the fall. There is potential for a Phase E, which would comprise more residential and retail.
Once complete, the entire budget for the project will exceed $1.2 billion, Rouillard estimated.
Retail key to mixed-use projects
“We will moderate the market, absolutely. It’s all about timing. You’ve got to hit pre-sales to get financing. But we feel really confident now with (phases) B and C.
“In this hot kind of construction market, the other office buildings out there are kind of falling behind on schedule and we are priding ourselves on being able to deliver on time. That’s what we are hoping, anyway.”
The key to a mixed-use project like the Hub — adjacent to the King George Expo Line station as well as two future rapid transit lines — is the retail component, said Rouillard.
It’s an approach that began with PCI’s Crossroads project at Broadway and Cambie, which mixed significant retail (Whole Foods, London Drugs) at ground level with 85,000 square feet of office and 85,000 square feet of market condominiums and townhomes.
The firm applied the concept again at Marine Gateway, another transit-oriented project that combined living, working, shopping and amenities into a comprehensive urban complex.
“We’ve built kind of a village (at King George) there now that is really going to stand on its own,” he said.
“In terms of marketing it, whether office or residential, it really comes down to location and the amenity package.
“If you can get everything in order, which we feel we have at King George now with transit, with two fully leased office buildings, and a bunch of retail, including a grocery anchor, that really starts to tell the story of it.”