The president and CEO of Chard Development believes slow recovery in the office sector is an aberration and he’s backing up his point of view with an emphatic statement in South Vancouver with a new development called Forum.
“The companies purchasing these strata office units are definitely long-term thinkers,” Byron Chard said of purchasers at Forum, a mixed-use project with a light industrial component in the city’s Marine Gateway neighbourhood. “They have typically sold real estate they previously owned on their balance sheets."
Vancouver isn’t a so-called "headquarters city." Ninety-five per cent of registered companies in the region have 50 or fewer employees, qualifying them as small businesses.
The most mature among this cohort — which Chard described as “established Vancouver brands” ranging from tech firms to not-for-profits and medical-related companies — have long invested in commercial real estate as a growth strategy. That might not come as a surprise considering Vancouver has long had among North America’s lowest office vacancy rates (currently about eight per cent), ensuring steady demand.
According to Chard, such companies feature heavily among Forum’s strata office purchasers thanks to Marine Gateway’s robust market fundamentals, including a nearby SkyTrain station with access to Vancouver International Airport two stops away.
Marine Gateway to see significant growth
He said such factors have conspired to create ideal conditions for buy-and-hold investments.
Moreover, thousands of new homes are to be built in the neighbourhood in coming years, leading to additional development and enterprise that will contribute to Marine Gateway’s overall livability.
“It will be a 15-minute neighbourhood which has a movie theatre, grocery store, shops and restaurants, and a number of new homes will further advance retail,” Chard said.
The area around Forum is slated to received about 2,200 new residents by 2026, and with a slew of planned day-care facilities in the neighbourhood, local businesses will induce young families to work for them.
“Having an accessible neighbourhood and office building in that location brings the right kind of daytime animation, just as the residents will bring during nighttime,” Chard said.
Forum does not have any fixed number of units because purchasers are afforded the flexibility to combine units should they so choose.
Features of the Forum development
The 78,000-square-foot development will stand seven storeys, with flex industrial space on the two lower floors and the commercial component above.
There are also two ground-floor retail strata opportunities totalling about 6,000 square feet, which can be connected to the industrial space to offer additional flexibility.
Another reason Chard chose to develop in Marine Gateway is vacancies in the area have been persistently low.
In building a new office complex, Chard’s offering will be more modern than its neighbouring competition, with amenities ranging from a gym on premises to a rooftop lounge — to say nothing of what Chard calls state-of-the-art mechanical-electrical systems that will contribute to lower hydro expenses for tenants.
Speaking to the nature of Vancouver-based businesses, Dan Jordan, senior vice-president of Colliers’ office division, said they tend to neither grow nor contract too quickly, often remaining well-nigh static for upwards of two decades.
As a result, the city’s office market usually accommodates them easily.
New residents mean new services
And while operating in a rising interest rate environment has created trepidation, Jordan said it’s already begun dissipating.
“We’ve seen a signal that interest rates will hold for some time. When interest rates were rising quickly and all signs were that further hikes were on the horizon, that led to people sitting on the sidelines,” he said.
“But we’re seeing them come back now that there’s more stability. People making these purchases are planning upwards of 15 years ahead, so short-term interest rates won't have much of an impact.”
The aforementioned addition of new residents is already creating a need for services like medical, dental, accounting, financial, and notaries, to name a few, which Chard Development anticipates will comprise much of Forum’s tenancies because it’s the only property in South Vancouver with the zoning required for professional services.
Jordan said Chard can rest easy knowing it's the only current option in this part of town.
“When you have a high congregation of people living in this area, they need services like doctors and dentists,” Jordan said. “Chard is seeing a lot of activity from those kinds of groups.”