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

Robert’s column
Robert Barron Column: Poachers in forest reserve should be treated harshly

‘Poachers need to be rounded up and prosecuted as soon as possible’

Can you dig it? Crofton In Bloom volunteers certainly can. From left: Trayci Lepp, Tony Lamley, Bonnie Lamley, Mary Patient and Jane Grueber. (Photo by Don Bodger)
Community pride grows from volunteer group’s beautification efforts

All ages contribute to Crofton In Bloom’s objectives

An object in motion stays in motion. An object at rest stays at rest. (Sarah Simpson/Citizen)
Sarah Simpson Column: This mother is grinning and bearing it

News broke the other day that, after months in hibernation, Grouse Mountain’s… Continue reading

An online cooking lesson with Ian Blom, the Red Seal Chef from the Ainslie Restaurant, is one of the items on auction in a fundraiser for the Duncan Curling Club and other causes. (Submitted photo)
Online action being held to assist Duncan Curling Club and other causes

Auction, run by the Duncan Rotary Club, closes May 22

Daily confirmed COVID-19 cases reported to B.C. public health, seven-day rolling average in white, to May 12, 2021. (B.C. Centre for Disease Control)
B.C. preparing ‘Restart 2.0’ from COVID-19 as June approaches

Daily infections fall below 500 Friday, down to 387 in hospital

On Friday, May 14 at Meadow Gardens Golf Club in Pitt Meadows, Michael Caan joined a very elite club of golfers who have shot under 60 (Instagram)
Crowds at English Bay were blasted with a large beam of light from an RCMP Air-1 helicopter on Friday, May 14. THE CANADIAN PRESS/Marc Grandmaison
Police enlist RCMP helicopter to disperse thousands crowded on Vancouver beach

On Friday night, police were witness to ‘several thousand people staying well into the evening’

Sinikka Gay Elliott was reported missing on Salt Spring Island on Wednesday, May 12. (Courtesty Salt Spring RCMP)
Body of UBC professor found on Salt Spring Island, no foul play suspected

Sinikka Elliott taught sociology at the university

The first Black judge named to the BC Supreme Court, Selwyn Romilly, was handcuffed at 9:15 a.m. May 14 while walking along the seawall. (YouTube/Screen grab)
Police apologize after wrongly arresting B.C.’s first Black Supreme Court Justice

At 81 years old, the retired judge was handcuffed in public while out for a walk Friday morning

Queen Elizabeth II and Clive Holland, deputy commonwealth president of the Royal Life Saving Society, top left, virtually present Dr. Steve Beerman, top right, with the King Edward VII Cup for his drowning-prevention work. Tanner Gorille and Sarah Downs were honoured with Russell Medals for their life-saving resuscitation. (Buckingham Palace photo)
Queen presents Vancouver Island doctor with award for global drowning prevention

Dr. Steve Beerman receives Royal Life Saving Society’s King Edward VII Cup at virtual ceremony

Former UFV Cascades wrestling coach Arjan Singh Bhullar is now the ONE heavyweight champion after defeating Brandon Vera via TKO in round two on Saturday in Singapore. (ONE Championship)
Former UFV wrestling coach wins MMA championship

Arjan Singh Bhullar captures ONE heavyweight title, first Indian origin fighter to achieve honour

Astra Zeneca vaccine waits for injection in a Feb. 3, 2021 file photo. A Langley man has become the second B.C. resident to suffer a blood clot following an injection. (AP Photo/Frank Augstein)
B.C. man required emergency surgery after AstraZeneca vaccination

Shaun Mulldoon suffered ‘massive blood clot’ after jab

Chilliwack’s Kile Brown, performing as drag queen Hailey Adler, dances and lip syncs in front of hundreds of people during the inaugural Chilliwack Pride Barbecue at the Neighbourhood Learning Centre on Aug. 24, 2019. Monday, May 17 is International Day Against Homophobia, Transphobia and Biphobia. (Jenna Hauck/ Chilliwack Progress file)
Unofficial holidays: Here’s what people are celebrating for the week of May 16 to 22

International Day Against Homophobia, Talk Like Yoda Day, Sea Monkey Day all coming up this week

Most Read