As the current office boom in Vancouver continues, a new report indicates that Vancouver’s Burrard Street is the country’s third most expensive street for office space, just slightly behind 8th Avenue in Calgary.
JLL’s Most Expensive Streets for Office Space report ranks Canadian cities by their highest office asking rents. Landing in the top three average asking rents this year are: Toronto at $68.52 per square foot; 8th Avenue SW, Calgary at $59.06 per square foot; and Burrard Street, Vancouver at $ 58.87 per square foot.
“The most significant trend that we are seeing across major markets is that there are a large number of new developments underway”, said Brett Miller, President of JLL Canada. “Although we have only seen minor changes to the top market rents thus far in 2014, we anticipate that as the new inventory comes to market, overall rents will decrease in the older class “A” stock whilst headline rents in new developments may raise the top line rents.”
There continues to be clear desire from many companies to pay a premium for the most expensive spaces. The most expensive streets fall into financial, retail or government hubs that are highly prominent and competition to get into those spaces is growing.
The Top Most Expensive Streets for Office Space in Canada (by average asking rents):
Bay Street, Toronto, ON, $68.52 p.s.f.
Bay Street held strong in first place for the fourth year running. It features headquarters of major Canadian Banks and is also home to many investment banks, accounting and law firms. Brookfield Place, at 161 Bay St., continues to command the highest office rents of any building in Canada, maintaining Bay Street’s status as most expensive street.
8th Avenue SW, Calgary, AB, $59.06 p.s.f.
8th Avenue SW hosts the highest average gross office rents in Calgary again. Large vacancies and availabilities along this corridor typically experience significant activity and command market leading rates. Large oil and gas companies have historically clustered around the central business district, in this area.
Burrard Street, Vancouver, BC, $58.87 p.s.f
Burrard Street has dropped to the third place position, despite a slight increase in average asking rent from $58.47 in 2013 to $58.87 this year. Approximately 18.3 percent of downtown Class A office supply is located on Burrard Street between West Georgia Street and Canada Place. Vacancy in these six notable buildings currently sits at 1.6 percent, which justifies why this prominent location commands some of the highest rental rates in the City despite the impending influx of new supply that is putting downward pressure on rents throughout the Central Business District.
Albert Street, Ottawa, ON, $52.10 p.s.f.
Albert Street remained in fourth position with average rents decreasing slightly from $53.40 p.s.f .to $52.10 p.s.f. Albert Street is mainly home to government related office towers, including numerous foreign embassies, and a few of the largest Canadian business law firms. The Ottawa market seems to have taken a wait-and-see approach in anticipation of the federal election in 2015 which will shed more light on the Government’s intensions to lease or return more space to the market.
101st Street NW, Edmonton, AB, $46.71 p.s.f
Edmonton’s average asking rent lowered from $48.19 p.s.f. in 2013 to $46.71 p.s.f. this year. Despite a drop in the average price from last year, 101st Street NW is expected to remain the most expensive street in Edmonton with the recent commitment to build the Arena district, a large-scale mixed-use project incorporating the city’s new NHL arena which will revitalize some of the most important corners on 101st Street NW.
René-Lévesque W, Montreal, QC, $44.28 p.s.f.
René-Lévesque W held sixth place. The average gross rent on the street has not changed significantly year-over-year but we have seen the total value of tenant inducement packages nearly double. The most expensive building on the street (1250 René-Lévesque W) has seen some downward pressure on its net rent (between $2.00 and $4.00 p.s.f.) due to 170,000 square feet of vacant space left behind by Heenan Blaikie.
Upper Water Street, Halifax, NS, $36.42 p.s.f.
Upper Water Street has maintained seventh, despite its average asking rent dropping $0.23 p.s.f. from $36.65 p.s.f. last year to $36.42 p.s.f. this year. Upper Water Street continues to command the highest rents in Halifax, however new construction coming on-stream is expected to put downward pressure on rents in existing office buildings.
Portage Avenue, Winnipeg, MB, $35.67 p.s.f.
Portage Avenue held strong on eighth place, with its average rent increasing $0.50 over last year – from $35.17 p.s.f. to $35.67 p.s.f. The Class A market remains tight and is expected to remain so through 2015.
Laurier Boulevard, Québec City, QC, $27.50 p.s.f.
Laurier Boulevard held its ninth place position; with the average office rent dropping from $28.14 p.s.f. in 2013 to $27.50 this year. There has been no notable increase in the average gross rent and vacancy on the street remains low (5.2 percent) in relation to the rest of the market (7.8 percent).
Image: Burrard Street via Shutterstock