Over 80 streetfront businesses closed in downtown Vancouver over the past year

May 14 2021, 1:41 pm

The high density of businesses in downtown Vancouver depends on foot traffic from the critical mass of office workers, tourists, and event attendees. The impact of their absence during the pandemic was highlighted in the Downtown Vancouver Business Improvement’s (DVBIA) newly released annual report on the state of the city centre.

With many office-based businesses adopting work-from-home as a temporary strategy, the office workforce population dropped from 116,000 people in 2019 to as low as 11,600 people during the peak of the pandemic in 2020, with average office occupancy rates ranging between 10% and 30%. This occupancy rate is likely to surge later this year when the pandemic begins to wane and businesses gradually reopen their offices.

But the pandemic’s prolonged economic and workplace effects led to some businesses resorting to releasing their office spaces. Downtown’s office vacancy rate fell from 2.6% in late 2019 to 6.6% in late 2020, which is still considered low. The vacancy rate is forecast to push further upwards to 8.6% in 2021. Most of the new vacancies during this period were from smaller and older spaces.

Downtown Vancouver’s office market has faired far better than most North American centres; at the end of 2020, downtown Vancouver had the lowest office vacancy rate amongst major city centres in Canada and the United States.

New office projects were still pushed forward during the pandemic, with 3.8 million sq ft of office space under construction and an additional 2.6 million sq ft proposed. The first major projects from the office construction boom that began before the pandemic are scheduled for completion in 2022 and 2023, including Oxford’s The Stack at 1133 Melville Street and The Post (Amazon) at 349 West Georgia Street.

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Construction progress of The Stack office tower at 1133 Melville Street, Vancouver. Captured on February 6, 2021. (Kenneth Chan/Daily Hive)

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Construction progress of The Post (Amazon) in downtown Vancouver, as of May 1, 2021. (Kenneth Chan/Daily Hive)

Hotel occupancy downtown also trended downwards from 80% in 2019 to 27% in 2020.

Levels of government took advantage of struggling hotel properties and were responsible for most of the nearly 600 hotel rooms lost in the city. A total of 326 rooms were acquired by governments and converted into emergency housing for the homeless, with more than half located within the downtown peninsula.

Of particular note, the Granville Entertainment District lost the low-end market Howard Johnson Hotel to government acquisition.  At the same time, the Four Seasons Hotel Vancouver closed in January 2020, which was planned prior to the pandemic. The Four Seasons Hotel Vancouver is currently undergoing a major retrofit for a new yet-to-be-named upscale hotel operator.

After just over three years of business, Trump International Vancouver Hotel permanently closed in August 2020. A new operator is expected to be announced at some point in the future.

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Renovation progress of the former Four Seasons Vancouver Hotel tower and the construction of the Apple flagship store pavilion at CF Pacific Centre. Captured on March 27, 2021. (Kenneth Chan/Daily Hive)

Private educational institutions play a role in downtown’s vibrancy as well. However, the pandemic resulted in the permanent closure of at least two major English-language training schools — Global Village and Inlingua. Enrolment at these language schools plummeted in Fall 2020 as most of the students at these institutions were ineligible for the restart of the federal government’s study-work visa program. Downtown has a total of 37 English-language training schools.

There was also a general aversion to downtown for leisure trips, with visits by young singles and couples down by 27%, large families down by 40%, and middle-age families down by 41%.

The depressed economic and social activity is also reflected by significantly lower public transit ridership into downtown.

These conditions contributed to the closure of at least 84 streetfront businesses between early 2020 and the first quarter of 2021. The most impacted area for business closures was along Granville Street, but it also saw more new businesses open during the pandemic than in 2019.

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800 Robson Plaza reopened in late March 2021 with its new permanent design. (Kenneth Chan/Daily Hive)

According to the DVBIA, as a proportion of Vancouver’s total, downtown accounts for 88% of hotel rooms, 70% of office space supply, 41% of jobs, and 23% of property taxes.

The DVBIA’s analysis covers only its jurisdiction, spanning the Central Business District and the Granville Entertainment District. It does not include other areas of the downtown peninsula such as Yaletown, Gastown, West End, and Robson Street, all under separate business improvement associations.

Ample temporary public spaces have been created over the past year, but earlier this year, downtown also saw the much-delayed completion of the permanent public plaza design for 800 Robson Street over Robson Square.

In Fall 2021, the new public park on the former surface parking lot at the northeast corner of the intersection of Smithe and Richards streets will reach completion. The $14.5-million public space features an event-friendly plaza, a playground, a small cafe, and an elevated pedestrian bridge.

Cineplex is also expected to complete its Rec Room entertainment hub at 855 Granville Street (across the street from the Commodore Ballroom) in early 2022.

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Construction progress of the 601 West Hastings Street office tower in downtown Vancouver. Captured on February 20, 2021. (Kenneth Chan/Daily Hive)

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