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

Get local stories you won't find anywhere else right to your inbox.
Sign up here

Just Posted

The College of Massage Therapists of B.C. says Van (William) Dinh, a registered massage therapist in Surrey and Langley, has had his licence suspended while an inquiry committee panel investigates allegations of sexual misconduct. (Unsplash photo)
Surrey massage therapist suspended amid sexual misconduct investigation

CMTBC received complaint Van (William) Dinh allegedly exposed ‘sensitive areas of the patient’s body’

Hundreds gathered for a candlelight vigil Friday evening (May 7) to remember 29-year-old corrections officer Bikramdeep Randhawa, who was killed in last weekend’s brazen daylight shooting outside North Delta’s Scottsdale Centre mall. (James Smith photo)
Hundreds gather to remember victim of North Delta shooting

Corrections officer Bikramdeep Randhawa, 29, was killed in what police say was a targeted incident

TEASER PHOTO ONLY
Surrey woman a face of World Ovarian Cancer Day campaign in London, New York

‘It’s so important we find better treatments,’ Catherine Eiswerth says

Flags flown at half mast out front of Fraser Regional Correctional Centre for slain corrections officer Bikramdeep Randhawa. (Neil Corbett/ The News)
Public vigil and flying flags at half mast done to honour slain prison guard

Maple Ridge corrections officer Bikramdeep Randhawa, 29, is being remembered in a number of ways

Surrey-White Rock MLA Trevor Halford and Surrey South MLA Stephanie Cadieux. (Contributed photos)
BC NDP ‘chose to create a system of chaos’ by holding back COVID-19 data: Cadieux

South Surrey MLAs criticize provincial government after BCCDC documents leak

(The Canadian Press)
Trudeau won’t say whether Canada supports patent waiver for COVID-19 vaccines

‘Canada is at the table to help find a solution’

Gord Judson steers his log truck down a forest service road, using two-way radio and call signals to mark his position for oncoming traffic. (B.C. Forest Safety Council)
Planning some B.C. wilderness fishing? Don’t catch a log truck

Remote recreation areas bracing for heavy pandemic pressure

Former University of British Columbia student Stephanie Hale, 22. THE CANADIAN PRESS/Jeff Bassett
Human Rights Tribunal to hear complaint against UBC Okanagan for ‘mishandling’ sexual assault report

Stephanie Hale did not return to campus after the student she alleges attacked her was cleared of wrongdoing

Cannabis bought in British Columbia (Ashley Wadhwani/Black Press Media)
Is it time to start thinking about greener ways to package cannabis?

Packaging suppliers are still figuring eco-friendly and affordable packaging options that fit the mandates of Cannabis Regulations

Jennifer Coffman, owner of Truffle Pigs in Field, B.C., poses beside her business sign on Thursday, May 6, 2021, in this handout photo. Her restaurant and lodge have been hit hard by a closure of a section of the Trans-Canada Highway and by the British Columbia government discouraging Alberta residents from visiting during the pandemic. THE CANADIAN PRESS/HO-Jennifer Coffman, *MANDATORY CREDIT*
‘Why we survive’: B.C. boundary towns struggle without Albertans during pandemic

Jennifer Coffman’s restaurant is located in the tiny community of Field, which relies on tourism

A sign indicating face coverings are required by the establishment is pictured on the front door of a business in Vancouver, B.C., Friday, April 9, 2021. COVID-19 cases have been on a steady increase in the province of British Columbia over the past week. THE CANADIAN PRESS/Jonathan Hayward
A sign indicating face coverings are required by the establishment is pictured on the front door of a business in Vancouver, B.C., Friday, April 9, 2021. COVID-19 cases have been on a steady increase in the province of British Columbia over the past week. THE CANADIAN PRESS/Jonathan Hayward
B.C. to start releasing neighbourhood-specific COVID numbers after data leak

Documents obtained by the Vancouver Sun show cases broken down by neighbourhoods

Provincial health officer Dr. Bonnie Henry and Health Minister Adrian Dix update B.C.’s COVID-19 situation at the B.C. legislature, April 29, 2021. (B.C. government)
B.C.’s COVID-19 case count creeps up, seven more deaths

445 people in hospital, 157 in intensive care

Summerland’s positive test rate is much higher than surrounding local health areas, according to internal BC CDC documents. (BC CDC)
Summerland 3rd behind Surrey, Abbotsford in daily per capita COVID-19 cases

Interior Health is rolling out additional vaccine availability to the community

Mandeep Grewal was gunned down outside an Abbotsford bank in October 2018. Police said a violent gang war to control drug-line territory was going on at that time. Drug charges have now been announced against seven people. (FILE PHOTO: John Morrow/Abbotsford News)
7 people face 38 charges related to gang drug activity in Abbotsford and Mission

Police say investigation began in 2018 into expansion of Brothers Keepers’ drug line

Most Read