2017 Mid-Year Office Market Report. Metro Vancouver, BC

Transcription

1 217 Mid-Year Office Market Report Metro Vancouver, BC metro Vancouver vacancy & absorption trends 217F Mid Vacancy Rate.% 2.% 4.% 6.% 8.% 1.% 12.% -4, 92,87 324,32-158,95 Absorption Rate Vacancy 29, ,868 4, 8.2% 7.8% 8, 9.1% 9.7% 9.4% 1% 1,2, Absorption 1,334,64 1,6, 12-month projection based on 1-year average absorption and known net absorption in new inventory Suburban leasing tightens regional vacancy as next Downtown development cycle set to launch Robust suburban demand in the Metro Vancouver office market, particularly in the Vancouver-Broadway and Surrey submarkets, continues to drive a decline in overall vacancy with mostly positive absorption recorded throughout the region in the first half of 217. Of the four Metro Vancouver submarkets that registered negative absorption in the first six months of 217 Burnaby, Richmond, New Westminster and the North Shore three of the four are anticipated to swing to positive absorption and contribute to a further decline in regional vacancy by year-end 217. Vacancy in Metro Vancouver dropped to 9.1% at mid-year 217 the lowest since year-end 213 from 1.4% at mid-year 216. Positive first-half 217 absorption of 324,32 sf represented a 48% decline from first-half 216 absorption, but marked the third year in a row that positive absorption was recorded regionally in the first six months of the year. The year-over-year decline was largely the result of minimal absorption recorded in Downtown Vancouver in the first six months of 217 as a result of buildings being removed from inventory, relocations and fewer occupancies due to a reduced deal flow noted in the second half of 216. This temporary situation will likely conclude by year-end as elevated deal flow in the first half of 217 will fuel tenant occupancies downtown in the second half of 217, strengthening downtown absorption. Approximately 2.2 msf of office space was absorbed in Metro Vancouver in the 24-month period prior to 217. Leasing activity in Yaletown, Vancouver-Broadway and Surrey was responsible for virtually all absorption recorded regionally in the first half of 217. For the urban submarket of Yaletown, which recorded its most first-half absorption since mid-year 21, vacancy dropped steeply to 3.9% from 6.8% just six months earlier. The same can be said for the suburban Vancouver-Broadway market, which registered the most first-half absorption on record and where vacancy declined to 7.5% from 1.7% at year-end 216. Both submarkets, along with Downtown, are expected to see vacancy tighten further by year-end 217, with absorption remaining healthy. continued on back page DISTRICT INVENTORY (SF) Metro Vancouver Office Vacancy Summary (mid-year 217) HEAD LEASE VACANCY (SF) SUBLEASE VACANCY (SF) TOTAL VACANCY (SF) VACANCY RATE (%) 6-MONTH ABSORPTION (SF) Downtown 22,684,775 1,385,78 147,23 1,532, % 31,352 Yaletown 2,29,244 74,442 4,777 79, % 59,647 Vancouver-Broadway 6,477, ,738 23, , % 276,474 Burnaby 9,256,79 938, ,44 1,235, % -81,72 Richmond 4,215,8 373,482 97,83 47, % -2,227 Surrey 2,96,67 373,14 5,12 378,242 13% 92,936 New Westminster 1,688, ,956 2, , % -7,86 North Shore 1,372,98 121,451 13, , % -26,282 TOTAL 5,631,235 4,19,172 59,142 4,69, % 324,32 Vacancy rate June 3, % Vacancy rate December 31, % Absorption (demand) Vacancy (supply) Rental Rates Partnership. Performance.

2 Downtown Vacancy trends Vacancy slipped to 6.8% at mid-year 217 the lowest vacancy rate recorded downtown since 214 from 7.8% 12 months earlier. Class A vacancy declined to 8.4% at mid-year 217 from 1.5% 12 months earlier. Class C vacancy declined by approximately 71, sf (or 25%) in that same 12-month period. Class AAA vacancy remained largely unchanged during the past 12 months with only a modest increase to 5% from 4.8%. The removal of 1166 West Pender (15,943 sf ) from class B inventory due to the building owner considering a medium- to long-term renovation or redevelopment of the property impacted vacancy. A new office building, FiveTen Seymour, was added to class A inventory. Downtown office sublease vacancy represented 9.6% of overall vacancy at mid-year 217, up significantly from 3.6% at mid-year 216, but still below historic norms and not a significant force in the market. The rise in sublease vacancy was primarily located in class B premises (which represented more recent lease deals - Mid-Year 217 (>1, sf) tenant BUILDING SF Oxford Properties is scheduled to deliver 41 West Georgia in late 219. WeWork Bentall 3 77, Lawson Lundell LLP (renewal) Cathedral Place 59, WSP Global Inc. Robson Court 53, BC Artscape Society 268 Keefer Street 49, Scanline VFX 58 Granville Street 41,7 College of Registered Nurses of BC 2 Granville Street 41,68 Anthem Properties Group Ltd. Bentall 4 33,4 Smythe LLP The Exchange 28, Spaces Ormidale Block 23,6 Hyperwallet Systems Inc. The Exchange 22,5 Watson Goepel LLP (renewal) 175 West Georgia Street 19,8 Kuehne + Nagel Inc. 9 Howe Street 16,93 Koffman Kalef LLP (renewal) HSBC Building 16,8 Sony Pictures Imageworks TD Tower 16,4 Altus Group Royal Centre 14,7 Archiact (sublease) Royal Centre 14,69 Charlwood Pacific Group (renewal) 1199 West Pender Street 14,4 BrainStation 717 West Pender Street 12, Bazinga Technologies Inc West Pender Street 11,6 Agreement Express Inc. 625 Howe Street 1,8 HUB International Vancouver TD Tower 1,78 Downtown vacancy lowest since mid-year 214 than two-thirds of total sublease vacancy) and marked a significant increase from 12 months earlier. Sublease vacancy increased slightly in class AAA and A properties, while it declined slightly in class C buildings. Overall vacancy has continued to decline steadily after peaking at 9.8% at mid-year 215. The market remains reasonably balanced although current trends are forecast to begin to favour landlords. There are very few large-block opportunities currently available. Occupancies during the next 12 months, including Sophos, QuadReal Property Group, WeWork and WSP Global, will result in vacancy tightening further, particularly in class AAA and A buildings. Strong deal velocity, including a number of new Downtown leases signed in the first half of 217 by new and existing tenants to the downtown market, signal a further decline in vacancy and a boost in Downtown absorption is likely to occur in the second half of 217. Vacancy Rate / SAF 14.% 12.% 1.% 8.% 6.% 4.% 2.%.% absorption trends Absorption of 31,352 sf was the least amount of first-half positive absorption recorded downtown since Avison Young started tracking the market in1996. However, absorption in the first half was impacted significantly by the departure of Canada Revenue Agency to the Vancouver-Broadway submarket and the subsequent removal of its former office building at 1166 West Pender Street from inventory (which was registered as negative absorption). Postmedia s relocation from 2 Granville Street (backfilled by the College of Registered Nurses of BC) to Broadway Tech Centre also contributed to negative absorption. However, these departures did not completely offset occupancies in the first half, which included Miller Thomson LLP at 725 Granville Street, Bench Accounting in the podium at Vacancy with Space Availability Factor (SAF) and Absorption 3.4% 5.7% 3.4% 6.8% 1,11,41 2.8% 9.3% -27, , ,99 7.2% 6.8% Mid F Vacancy Absorption SAF* Space Availability Factor 12-month projection based on 1-year average absorption and known net absorption in new inventory, and 1-year average SAF. 3.8% 3.4% 2.7% 7.5% 31,352 61,216 1,2, 1,, 8, 6, 4, 2, -2, -4, Absorption Rate 2 Partnership. Performance

3 Next wave of development preparing to kick off in 217 Downtown Telus Garden and Adler University at 51 Seymour Street, among others. Only class A buildings registered positive absorption in the first half of 217. space availability factor The space availability factor, or SAF, refers to head lease or sublease space that is being marketed but is not physically vacant, and new supply that is nearing completion and available for lease. SAF increased slightly to 3.4% at mid-year 217 from 3.2% 12 months earlier. Combined with vacant space, the amount of space being marketed for lease in the Downtown core is 1.2% (or approximately 2.3 msf ), the lowest overall availability since year-end 213 (9.1% or 1.9 msf ) and the same as recorded at year-end 214. new construction The impact of the completion of The Exchange on downtown vacancy will be more subdued than initially forecast after it was announced in the first half of 217 that 11, sf would be converted from office to hotel use. About two-thirds of the remaining office space in The Exchange was available for lease as of June 3, 217. The building s completion will mark the last delivery from the previous development cycle. Only two other significant downtown office projects remain under construction: The Cardero and The Offices at Burrard Place. While these two developments offer a mix of lease and strata office space totalling 281, sf, 6, sf of the strata space being built in The Offices at Burrard Place has already been presold. The next development cycle, which will likely see at least three office towers break ground by year-end 217, will start to deliver in late 219 with Oxford Properties 41 West Georgia leading the pack. Others will follow in 22/21. market forecast Rates remained stable in the first half of 217, but expect upward pressure on rents by year-end 217, particularly at the higher end of the market. Vacancy in the Downtown office submarket is forecasted to tighten further as tenants continue to expand and new tenants enter the market. Although the delivery of The Exchange by year-end 217 will provide some relief, supply constraints will become a factor during the next six to 24 months. This substantial block of vacancy in The Exchange may temporarily offset absorption and boost availability at year-end 217, but overall, the tightening trend is forecasted to continue into 218/19. Developers are expected to respond to current and projected market fundamentals with three or more towers constructed on a speculative basis and breaking ground by the end of the year. Virtually all new inventory delivered over the last 3 months has been absorbed. Tenant demand is now refocused on availability in the existing inventory, which already remains limited with almost no new supply slated to be completed until 219 at the earliest. DEVELOPER BUILDING SF PRELEASE SF PRELEASE % COMPLETION Credit Suisse AG/ The Exchange, 475 Howe Street 252, (office) 86,25 34% Q4 217 SwissReal Group Canada Bosa Properties/ The Cardero, 1575 West Georgia Street 44,948 (office) Lease/Strata Lease/Strata Q ,375 (office tower) % Q , (office podium) Strata 67% sold Q3 219 Oxford Properties 41 West Georgia Street (redevelopment) 147, % Q4 219 Arpeg Holdings Jim Pattison Developments & 62 Cardero Street (mixed use) 128 Burrard Street (mixed use) Reliance Properties/ The Offices at Burrard Place, Reliance Properties/ Jim Pattison Developments The Offices at Burrard Place, 1281 Hornby Street (mixed use) Morguard sixone, 61 West Hastings Street 227, % Q1 22 Westbank/Allied REIT 4 West Georgia Street and 725 & 731 Homer Street 35,788 % Q1 22 Uptown Property Group 625 West Hastings Street 12, % Q1 221 GWL Realty Advisors Vancouver Centre II, 753 Seymour Street 368,115 % Q2 221 Bentall Kennedy 19 West Pender Street 53, - - Proposed Oxford Properties 1133 Melville Street 495, - - Proposed QuadReal Property Group The Post on Georgia, 349 West Georgia Street (mixed-use) 471,428 (office) - - Proposed Bosa Developments 32 Granville Street TBD - - Proposed Aquilini Development and Construction Aquilini Centre East, 777 Pat Quinn Way First-half positive Absorption lowest since ,3 (office) - - Proposed Low Tide Properties 155 Water Street 69, (office) - - Proposed FDG Properties Water Street 68,576 (office) - - Proposed Terrma GP I Inc. Eight 55 on Granville, 855 Granville Street (mixed use) 29,785 (office) - - Proposed 1488 Robson Street Holdings Ltd Robson Street 28,73 (office) - - Proposed Boffo Developments The Smithe, 885 Cambie Street 28,28 (office) - - Proposed Westbank 72 Beatty Street TBD - - Proposed Cadillac Fairview Waterfront Tower, 555 West Cordova Street TBD - - Proposed Head Lease Sublease Vacancy (%) absorption SAF SAF (%) AAA 4,728,576 29,54 24, ,23 5% -13,52 11, % $28 - $46 $48 - $71 A 8,13, ,925 19,53 677, % 184,13 342,44 4.2% $22 - $4 $4 - $64 B 6,714,262 38,416 99,966 48, % -117, , % $18 - $34 $35 - $56 C 3,138,684 28,863 3, , % -21, ,18 4.6% $14 - $25 $26 - $41 22,684,775 1,385,78 147,23 1,532, % 31, , % - - 3

4 downtown development timeline The exchange 475 howe street The Cardero,1575 w. georgia street & 62 cardero street The Offices at Burrard Place 128 Burrard Street The offices at Burrard Place 1281 Hornby Street 41 West Georgia Street Q4 217 Q1 219 q3 219 Q3 219 Q4 219 Developer Credit Suisse / SwissReal Group Bosa Properties/ Arpeg Holdings Reliance Properties/ Jim Pattison Developments Reliance Properties/ Jim Pattison Developments Oxford Properties Storeys 31 3 floors in mixed-use building storey podium (3 floors) 9 office sf 252, 44,948 (lease/strata) 146,375 (office tower) 9, (strata) 147, tenants 35,75 sf - National Bank of Canada 3, sf - Arpeg Holdings No tenants at this time Sold (phase 1-6, sf) No confirmed tenants at this time 28, sf - Smythe LLP Not released (phase 2-3, sf) 22,5 sf - Hyperwallet Systems 4,25 sf - Serracan Properties Occupancy 34% 7% % 67% % proposed downtown developments 32 Granville Street Bosa Developments TBD Waterfront Tower, 555 West Cordova Street Cadillac Fairview TBD Water Street FDG Properties 7 / 68,576 sf 19 West Pender Street Bentall Kennedy 31 / 415,92 sf Aquilini Centre East, 777 Pat Quinn way Aquilini Development & construction Floors / Office area 9 / 69,3 sf This development site was formerly owned by Carrera Management. Bosa Developments, which acquired the site in early 216, introduced its own design for the site in December 216. Construction timing is not known but the project s development permit application was approved on April 3, 217. The DP application no longer appears on the City of Vancouver website and Bosa Developments remains tight lipped about its plans. The Urban Design Panel (UDP) did not support the original building design in 215. The architect subsequently presented nine alternative concepts in a UDP workshop in June 215, which received a warmer reception. A public engagement session was held in December 215. A revised design has not yet been submitted and work continues on the building but a design consensus has yet to been reached with the City. An update is anticipated in Q A seven-storey, mixed-use commercial/residential building has been proposed on this site that would retain three existing heritage buildings. The development permit application is conditional so it may be permitted, but it requires the decision of the director of planning. The building will feature 68,576 sf of office space on floors 2, 3 and 4 and residential units on 5, 6 and 7. The ground floor would feature retail and restaurant uses. UDP supported the design in February 214. A public hearing related to its rezoning application was set for February 24, 215, and the application was approved by the City. As of June 3, 217, the developer was continuing to work through development permit application requirements. This proposed mixed-use residential/office tower will be the third and final building to form the Aquilini Centre development anchored by Rogers Arena. This building was originally scheduled for completion by the end of 218, but the timing of construction has been delayed due to the forthcoming removal of the Georgia and Dunsmuir viaducts. The east tower as proposed was to feature 69,3 sf of office space on floors 5 thru 13 with residential units on the upper floors. 4 Partnership. Performance

5 Sixone, 61 West Hastings Street 4 West Georgia Street 625 West Hastings Street Vancouver Centre II, 753 Seymour Street Q1 22 Q1 22 Q1 221 Q2 221 Developer Morguard Westbank/Allied REIT Uptown Property Group GWL Realty Advisors Storeys office sf 227, 35,788 12, 368,115 tenants No tenants at this time No tenants at this time No tenants at this time No tenants at this time Not released (phase 2-3, sf) Occupancy % % % % 1133 Melville Street Oxford Properties 34 / 495, SF The Post on Georgia, 349 West Georgia Street QuadReal Property Group 19 / 471,428 sf The Smithe, 885 Cambie Street Boffo Developments 3 / 28,2 sf 155 Water Street Low Tide Properties 7 / 69, sf Eight 55 on Granville, 855 Granville Street Terrma gp I inc. 3 / 29,78 sf Rezoning application was filed on July 8, 215. The application went before the UDP during the week of October 19, 215. The UDP did not support the initial building design as proposed, but subsequently supported a new design at a May 31, 217 UDP review meeting. Oxford Properties is currently updating its 215 rezoning application, but as of June 21, 217, had not resubmitted that updated application to the city. New renderings were released in June 217. A public open house was held in November 216 as part of the rezoning application process, which was originally submitted to the City in June 216. The office component of the mixed-use development will be in podium and tower forms. The proposed19-storey office tower includes 381,428 sf of office space with another 9, sf in the podium. A revised rezoning application was filed in May 217 that reduced overall density & building massing and slimmed tower design. The rezoning application for current design was filed May 5, 215. A community open house was held June 15, 215 and the rezoning application was approved by council at public hearing on January 19, 216. The project went before the UDP on August 1, 216 as part of its development permit application and was supported. The application has received approval-in-principle and Boffo is working through the outstanding conditions before a permit can be issued. The development was supported by the UDP on August 12, 215 and the rezoning application was subsequently approved directly by the director of planning with numerous significant conditions. Those conditions were addressed and the project received its development permit in spring 217 and was awaiting its building permit. There is currently no time frame for construction to start and would only proceed with a meaningful amount of preleasing in place. A development permit application was filed to provide interior and exterior alterations and a change of use of the existing movie theatre to include 27,11 sf of retail in the basement/ ground floor and 29,78 sf of office space on the 2nd and 3rd floors. The development permit application was approved by the city with conditions on January 27, 217. A building permit was applied for in July 217 with construction slated to start in the third quarter of

6 Vancouver-Broadway Vacancy rapidly declining as absorption rises Vacancy Rate 12.% 1.% 8.% 6.% 4.% 2.%.% 5.1% -16,768 The Vancouver-Broadway submarket has historically encompassed the office space located along the Broadway corridor as well as smaller ancillary office nodes scattered throughout Vancouver. As office development has spread throughout Vancouver and the Broadway corridor assumed greater importance, the submarket s statistics were increasingly skewed by development in East and South Vancouver. In an effort to address these diverging submarkets, Avison Young began separating Vancouver-Broadway into two submarkets the Core and Periphery in 217. While the core will focus on office space located along the traditional Broadway corridor, the periphery will include office space located throughout the rest of Vancouver. Vacancy trends 41,466 Overall vacancy fell to 7.5% at mid-year 217 from 1.5% a year earlier as tenants started to occupy the wave of new construction delivered in 216 as well as more traditional office space in both Core and Periphery submarkets. Vacancy in the Core rose slightly to 2.4% (up from 1.7% at year-end 216) whereas vacancy in the Periphery plunged to13.8% at mid-year 217 from 21.2% six months ago. Vacancy in the Periphery tightened as a result of Postmedia relocating from downtown to Broadway Tech Centre (BTC) and HSBC expanding its footprint at BTC after shuttering its Burnaby operations. The occupancies of Vacancy and Absorption (overall) 4.6% 4.5% Vacancy - -38, % 15,187 Absorption 276, % 5.6% 58, Mid F 45, 4, 35, 3, 25, 2, 15, 1, 5, -5, -1, 12-month projection based on 1-year average absorption and known net absorption in new inventory Absorption Rate Columbia College and smaller tenants at 333 Terminal Avenue also contributed to the decline in Periphery vacancy as did Westport s expansion at 175 West 75th Avenue. Occupancy at Marine Gateway by Intel and Townline Group reduced vacancy even further. The sublease space that had been formerly offered by Westport in Marine Gateway has reverted to head lease availability. All of these occupancies helped offset Rocky Mountaineer s relocation to downtown and the removal of Arbutus Village from inventory due to the property s redevelopment. The occupancy of Renfrew Centre by the BC Safety Authority and Associated Engineering in the second half of 217 along with the City of Vancouver occupying a floor in Marine Gateway will further reduce overall vacancy, in the Periphery specifically, by year-end 217. While vacancy in the Core increased slightly at mid-year 217 from year-end 216, vacancy is likely to remain tight with limited availability in the new developments being delivered in the next 12 months. In the first half of 217, DHX Media occupied the entirety of the Fifth at 38 West 5th Avenue, while Creative BC and Native Canada Footwear occupied the Mirror at 7 West 6th Avenue, both in Mount Pleasant. Vacancy remains low and new inventory has been absorbed quickly since mid-year 216, particularly along the tight core Broadway corridor. First-Half absorption of 276,474 sf most recorded since 1996 absorption trends Overall first-half absorption of 276,474 sf marked the most absorption recorded in the first half of the year in the Vancouver-Broadway submarket since Avison Young started tracking the market in Absorption of 82,636 sf in the Vancouver-Broadway Core was primarily recorded in Mount Pleasant, while positive absorption of 193,838 sf in the Periphery was largely registered at Marine Gateway and Broadway Tech Centre. Columbia College s occupancy at Vantech Centre at 333 Terminal Avenue largely offset the relocation of Rocky Mountaineer. new construction BlueSky Properties Broadway Commercial development is scheduled for completion by the end of 217. The project is mostly leased to a single tenant. PC Urban Properties Lightworks Building, slated for completion in early 218, is primarily leased to a single tenant. What was planned to be office space in Rize Alliance s The Independent at Main will now mostly be used to accommodate a 3,-sf grocery store and is estimated to be completed in the first quarter of 218. Construction continues on PCI Group s project at 565 Great Northern Way and Rendition Developments development at 24 West 6th Avenue, which has been acquired in a forward sale by MDC Property Services. Both are scheduled for completion in the second quarter of 218. Chard Development s strata office project, 34 W7, is 75% sold, while PC Urban Properties development at 275 West 5th Avenue has been largely preleased and is scheduled for completion by year-end 218. Porte Commercial recently launched a new four-storey, recent lease deals - Mid-Year 217 tenant BUILDING SF BC Emergency Health Services 292 Virtual Way 49,5 SEGA Games Co. Ltd. 275 West 5th Avenue 48, Saje Natural Wellness 22 East 5th Avenue 46,8 Atomic Cartoons 123 West 7th Avenue 35, Rainmaker Entertainment (renewal) 225 West Broadway 22,91 City of Vancouver Marine Gateway 21,59 AbCellera Biologics Inc Yukon Street 21, NetApp VTC Inc. (renewal) 268 Granville Street 7,7 6 Partnership. Performance

7 Almost 1.4 msf of new construction proposed Vancouver-broadway Reliance Properties/Porte communities is proposing a 144,216- sf 6-storey office/retail building on East 1st Avenue. 34,38-sf office/showroom/flex industrial project, The George, in Strathcona that is estimated to be complete by the end of 218. New office development in Vancouver-Broadway continues to flourish with projects proposed in both the core and periphery from well-known developers such as QuadReal Property Group, Onni Group, Westbank, PCI Group, Reliance Properties and Conwest along with smaller developers such as the CRS Group, Vivagrand Development, Champion Development, Vanlux Development and Pacific Crown Management. market forecast Rental rates are likely to remain stable in all classes in 217, but ongoing limited availability will begin to exert upward pressure on rates in 218 as tenants relocate or renew. Deal velocity has slowed considerably due to a lack of available space, particularly in the Core. This has served to keep rate increases limited as fewer deals are being completed. However, overall vacancy will continue to tighten, particularly in the Periphery, as Renfrew Centre is occupied. Overall vacancy is forecast to tighten considerably by year-end 217. The majority of new space being delivered in Vancouver-Broadway during the next 12 to 18 months (much of it located within Mount Pleasant) is already preleased, which will further hamper leasing activity as tenants have limited options. It is highly likely that new developments along the Broadway corridor and in the Periphery will be announced before year s end. Mount Pleasant Employment Area (I-1 Zoning) Tightening vacancy (3.7% at mid-year 217) and rising lease rates remain the story in Mount Pleasant the most in-demand emerging office node for tech firms in Metro Vancouver. Despite significant new supply being delivered in the next 18 months, most is already preleased or presold. As the building inventory in Mount Pleasant expands, vacancy will stabilize or tighten further as many new projects are preleased prior to completion. DEVELOPER BUILDING SF PRELEASE % COMPLETION BlueSky Properties Broadway Commercial, 988 West Broadway 94,12 8% Q4 217 PC Urban Properties The Lightworks Building, 22 East 5th Avenue 53,2 (office/light industrial) 95% Q1 218 Rize Alliance The Independent at Main, 288 East Broadway 17, (office) % Q1 218 Rendition Developments / MDC Property Services 24 West 6th Avenue 27,8 (office/light industrial) % Q2 218 PCI Group 565 Great Northern Way 17, 56% Q2 218 Chard Development 34 W7, 34 West 7th Avenue 54,347 (office/light industrial) Strata: 75% sold Q3 218 PC Urban Properties 275 West 5th Avenue 7,915 (office/light industrial) 68% Q4 218 Porte Commercial The George, 1157 Parker Street 34,38 (office/light industrial) % Q4 218 QuadReal Property Group Broadway Tech Centre, 33 East Broadway (five buildings) 962,3 % Proposed Onni Group Voxel, 399 East 1st Avenue 8, % Proposed Vanlux Development West 8th Avenue 61,65 (office) % Proposed Champion Development Group 151 West 5th Avenue 54,29 (office/light industrial) % Proposed Conwest Group of Companies West 6th Avenue 52, (office/light industrial) % Proposed Pacific Crown Management Ltd. 51 West Broadway 43,425 (office) % Proposed Reliance Properties/ Porte Communities 339 East 1st Avenue 144,216 % Proposed Vivagrand Development Corp Cambie Street 21,657 (office) % Proposed Periphery Core Head Lease Head Lease Sublease Sublease Lease rates in existing buildings are achieving high $2s to low $3s psf, while new buildings are commanding low $3s to high $3s psf. With potentially more than 1 msf of new office space proposed or contemplated during the next 36 months, the submarket will remain dynamic as the parade of new product further densifies the area, which will soon rival Yaletown and surpass the New Westminster and North Shore submarkets in terms of size. Vacancy (%) Vacancy (%) absorption absorption A 1,996,863 28,971 7,182 36, % 97,525 $25 - $32 $42 - $5 B 1,19,893 49,332 2,15 51, % -14,889 $18 - $25 $31 - $41 C 417,14.% $15 - $19 $28 - $33 3,64,896 78,33 9,287 87,59 2.4% 82, A 2,181, ,527 13, , % 162,271 $24 - $32 $39 - $5 B 625,797 34,98 34,98 5.6% 2,83 $18 - $23 $31 - $38 C 65,498 1,928 1, % 1,737 $15 - $19 $28 - $33 2,872, ,435 13, , % 193, Head Lease Vacancy Sublease Vacancy Vacancy (%) absorption Overall A 4,178,21 373,498 21, , % 259,796 $24 - $32 $39 - $5 B 1,816,69 84,312 2,15 86, % 5,941 $18 - $23 $31- $41 C 482,638 1,928 1,928.4% 1,737 $15 - $19 $28 - $33 6,477, ,738 23, , % 276,

8 Yaletown Strong leasing activity sends vacancy tumbling Vacancy and Absorption Vacancy Rate / SAF 14.% 12.% 1.% 8.% 6.% 4.% 2.%.% 19,732 3% 4% Vacancy trends 23, % 3.8% 3.1% 4.1% -2,91 Vacancy dropped to 3.9% at mid-year 217, down from 6% a year earlier and the lowest vacancy recorded since year-end 214. The main reasons for the decline in vacancy was SAP occupying 53, sf at 91 Mainland and 99 Homer, as well as several other smaller tenants such as Klei Entertainment and Conconi Holdings moving into their new premises. Demand from the tech sector, in particular, has pushed vacancy lower in the submarket. Visier Workforce Analytics, currently located in the Vancouver-Broadway submarket, leased more than 39, sf at 858 Beatty Street. With Stellar Creative Lab leasing 17,4 sf at 1128 Homer Street, one of the last remaining large blocks of space that had been available, for occupancy in the second half of 217, and Kokko Luxury Boutique opening in third-quarter 217 after leasing 21, sf in 948 Homer Street, vacancy will continue to tighten in this landlord s market. There are very limited options available or coming available in the near future for mid- to large-sized blocks of space as vacancy approaches 4.9% -41,953 47, % 3.9% Vacancy Absorption SAF* Space Availability Factor record lows. There is virtually no sublease space available in the submarket. absorption trends 2.3% Mid F 1, month projection based on 1-year average absorption and 1-year average SAF 6.8% 3% Positive absorption was recorded in the first half of the year for the first time since mid-213 as Yaletown businesses occupied 59,647 sf in the first six months of 217, the most since mid-year 21. Strong leasing activity in the submarket since mid-216 has exerted downward pressure on availabilities in all property classes and limited lease options. Absorption will very likely remain positive in 217 with several tenants set to occupy in the second half of 217. space availability factor 6, 5, 4, 3, 2, 1, The space availability factor (SAF) refers to head lease and/or sublease space that is being marketed, but is not physically vacant. The SAF plunged to 2.4% (47,833 sf ) at mid-year 217 from 6.1% (124,58 sf ) at mid-year 216 (which had been the most SAF since year-end 214 when the indicator reached a record high of 6.9% (139,11 sf )). Hence the amount of available space currently being marketed (occupied and vacant) in Yaletown is 6.3% or approximately 127, sf. -1, -2, -3, -4, -5, Absorption Rate Visier Workforce Analytics has leased the balance of 858 Beatty Street. new construction No new construction is currently planned. market forecast Rental rates are trending upwards in all building classes in Yaletown as vacancy tightens with no new supply under construction (or proposed) in the popular submarket. This trend will continue through 217 as landlords continue to benefit from a resurgence in leasing activity after vacancy spiked at mid-year 214 and had remained elevated as tenants relocated to other submarkets such as Downtown, Mount Pleasant and Gastown/Railtown. With no obvious large blocks of space coming available besides 3, sf at 78 Beatty Street, vacancy is expected to remain low with tenants looking to locate in Yaletown having to contend with very limited options in all sizes and building classes. recent lease deals - Mid-Year 217 tenant BUILDING SF Visier Workforce Analytics 858 Beatty Street 39,11 Stellar Creative Lab 1128 Homer Street 17,4 EF Language School 75 Cambie Street 13,28 Tuangru (sublease) 111 Hamilton Street 5,5 Grosvenor Americas 15 Homer Street 3,98 Globalme Localization Inc. 18 Homer Street 3,9 Head Lease Sublease Vacancy (%) absorption SAF SAF (%) A 576,938 19,61 19,61 3.3% 38.% $28 - $33 $46 - $52 B 998,357 38,21 4,777 42, % 42,795 17,56 1.8% $25 - $28 $42 - $44 C 453,949 17,18 17,18 3.8% 16,544 3, % $2 - $25 $35 - $4 2,29,244 74,442 4,777 79, % 59,647 47, % Partnership. Performance

9 Vacancy forecast to tighten despite elevated sublease availability Burnaby Vacancy Rate 14.% 12.% 1.% 8.% 6.% 4.% 2.%.% 9.1% -114,783 Vacancy trends Vacancy dropped to 13.3% at mid-year 217 from 14.6% a year earlier due primarily to tenants occupying Solo District; however, the departure of HSBC, which vacated more than 146, sf at 3383 Gilmore Way, offset further tightening. Deal velocity in the first half was limited by the sluggish lease-up of small pockets of vacancy despite larger blocks of space being backfilled. While more than 61, sf of vacant sublease space was leased at 3777 Kingsway and will be occupied in the second half of 217 by Kinder Morgan, Raymond James and Optimum West Insurance, more than 132, sf of sublease space is being marketed at 3777 Kingsway as available (with 74,753 sf of that available but occupied). FortisBC is also offering a significant block of space for sublease in Willingdon Park. Despite a decline in vacancy and limited options on rapid transit, Burnaby remains a tenant s market with a range of options available. absorption trends 12.6% 34,39 Negative absorption of -81,72 sf in the first half of 217 was largely the result of HSBC vacating the submarket, tenants relocating from Willingdon Park, and three more vacant floors being released for sublease at 3777 Kingsway. Much of the backfill space created in Willingdon Park Vacancy and Absorption 12.9% 32, , month projection based on 1-year average absorption and known net absorption in new inventory 12.5% Head Lease Vacancy 13.3% -81,72 1.4% 29, Mid F Vacancy Absorption has been occupied. While Capcom relocated to Solo District from Willingdon Park, Huawei Technologies and the Sherwin-William Company all leased space in the park and will occupy in the second half. H.Y. Louie will occupy in 218. New Construction Anthem Properties mixed-use Station Square will feature 52,8 sf of office space on two floors in the project s podium. One floor has been sold in Cressey Developments eight-storey, 7,43-sf strata office project, Kings Crossing. Onni Group continues to work on its phased mixed-use project, Gilmore Place, which will feature 34, sf of office space when complete. Onni Group is also proposing an 11-storey mixed-use building at 3355 North Road. Plans call for a three-storey retail/office podium and eight floors of office space to break ground by year-end 218. DEVELOPER BUILDING SF PRELEASE SF PRELEASE % COMPLETION Anthem Properties Station Square, 66 Silver Avenue 52,84 (office) % Q3 218 Cressey Development Group Kings Crossing, 735 Edmonds Street 7,43 (office) Lease/Strata 15% sold Q2 219 Kingswood Capital Discovery Place Business Park, 3555 Gilmore Way 5, % Awaiting prelease Belford Properties The Centre at Sun Towers, 4458 Beresford Street 7, (office) Strata Strata Proposed Shape Properties The Amazing Brentwood (redevelopment) 5, (office) % Proposed Onni Group Gilmore Place, Gilmore Avenue & Lougheed Highway 34, (office - second phase) % Proposed Onni Group 3355 North Road 161,239 (office) % Proposed Sublease Vacancy 3, 25, 2, 15, 1, 5, -5, -1, -15, recent lease deals - Mid-Year 217 tenant BUILDING SF Grantham Holdings Ltd. 27 Production Way 36,25 Kinder Morgan (sublease) 3777 Kingsway 35,88 Binnie Consulting Ltd. 494 Canada Way 27,8 H.Y. Louie Co. Ltd. 441 Still Creek Drive 25, SCM Insurance Services 8333 Eastlake Drive 2,74 RDH Building Science Inc Still Creek Drive 2,5 Ventana Construction (renewal) 3875 Henning Drive 2,25 Raymond James Ltd. (sublease) 3777 Kingsway 17,865 MaxLinear 437 Still Creek Drive 14, Wondershare 4445 Lougheed Highway 13, Traction on Demand (expansion) 8555 Baxter Place 1, Huawei Technologies Co. Ltd Still Creek Drive 1, Optimum West Insurance (sublease) 3777 Kingsway 8,2 The Sherwin-Williams Company 437 Still Creek Drive 7,275 Vacancy (%) absorption Market Forecast Rental rates will remain stable in 217 as landlords continue to induce tenants to complete a new deal or renew. Large blocks of space are leasing up at a faster pace than smaller pockets, where numerous options remain. Vacancy will decline by year-end 217 with absorption recorded in 3777 Kingsway and Willingdon Park. Metro Vancouver s relocation to Metrotower III and the likely redevelopment of its former head office will reduce vacancy and boost absorption by year-end. Sublease space will remain a factor impacting rates, absorption and vacancy as additional floors in 3777 Kingsway are released slowly over time. A 6,36,81 674, ,24 969, % -55,31 $17 - $27 $33 - $43 B 2,81, ,746 2,2 197, % -4,554 $14 - $18 $26 - $3 C 869,38 68,155 68, % 14,135 $12 - $18 $22 - $28 9,256,79 938, ,44 1,235, % -81, Absorption Rate sublease space to remain a factor beyond 217 9

10 Richmond New development looms as recovery officially ends Vacancy Rate Vacancy trends Vacancy in Richmond s office market rose to 11.2% at mid-year 217 from 11% 12 months earlier the first increase in vacancy in more than six years. The anticipated relocations of Tetra Tech and Procurify from Airport Executive Park offset expansions and new leases that would otherwise have contributed to vacancy tightening had the two firms not departed. Deal velocity increased slightly from the fourth quarter of 216 and is expected to remain steady throughout 217. A large sublease availability at 36 Lysander offered to the market by Syscon Justice Systems also contributed to the increase in vacancy. A few large blocks of space remain available within both Crestwood Corporate Centre and Airport Executive Park. absorption trends Negative absorption of -2,227 sf in the first half of 217 was the first time since mid-year 214 that negative absorption was recorded in the first six months of the year. The departure of Tetra Tech and Procurify, which both relocated to Downtown Vancouver, vacated approximately 56,9 sf in Airport Executive Park. 18.% 16.% 14.% 12.% 1.% 8.% 6.% 4.% 2.%.% 167, % 15.2% Vacancy and Absorption 12% Vacancy 1.7% 11.2% Absorption 12-month projection based on 1-year average absorption and known net absorption in new inventory new construction 9.9% Mid F 7, ,883 Head Lease Vacancy 54,82-2,227 25,87 2, 15, 1, 5, -5, With no new construction of buildings for lease since 28, developers are positioning themselves to be the first to break ground. Yuanheng Holdings three-phase mixed-use ViewStar development will include a 12-storey, 25,141-sf office tower in its second phase. The earliest occupancy date is late 22. ifortune Homes rezoning application for its 15,422-sf, 11-storey office tower has received its third reading and its development permit application has been submitted. Bene (No. 3) Road Development Ltd. s rezoning application is being reviewed. Its development permit application will start being processed after a public hearing. The nine-storey Sublease Vacancy Absorption Vacancy (%) absorption office tower will include 63,475 sf of office space and ground-floor retail. The rezoning application for New Continental Properties mixed-use project was expected to be referred to public hearing in July 217 and calls for a 5,483-sf office tower. Completion dates for the three projects are not known. market forecast Ongoing availabilities within Crestwood Corporate Centre and Airport Executive Park are expected to help keep rental rates stable over the next six months. Loyaleaf Financial and CBE LLP are scheduled to occupy their new premises in the second half of 217 and vacancy will likely tighten slightly as a result. The Richmond submarket continues to offer tenants expansion space and multiple options for businesses considering relocating. Lease rates remain among the lowest in Metro Vancouver. DEVELOPER BUILDING SF PRELEASE SF PRELEASE % COMPLETION Yuanheng Holdings New Continental Properties ViewStar, No. 3 Road, 8151 Capstan Way & 851/81 River Road 832, 834 & 844 Bridgeport Way and 8311 & 8351 Sea Island Way 25,141 (office - second phase) % Q4 22 5,483 % Proposed Bene (No. 3) Development Ltd. 47 No. 3 Road 63,475 (office) % Proposed ifortune Homes Inc. MYIE Development Vacancy Rises for first time in 6 years ifortune Center, 684 & 686 No. 3 Road and 851 Anderson Road International Trade Centre at Versante, 8451 Bridgeport Road recent lease deals - Mid-Year 217 tenant BUILDING SF Vancouver Coastal Health (expansion) 7671 Alderbridge Way 26,12 PressReader (expansion & renewal) Vanier Place 25, Loyaleaf Financial Services Crestwood Corporate #5 17,815 Developmental Disabilities Association (renewal) USANA Health Sciences (expansion & renewal) 15,422 % Proposed 1, (office) Strata NA 3851 Shell Road 13, Commerce Parkway 1,4 Cohen Buchan Edwards LLP Crestwood Corporate #8 7,76 Sedgwick CMS Canada Inc. Airport Executive Park #1 3, Under construction Vanprop Investments Lansdowne Centre (redevelopment) TBD % Proposed A 2,895, ,693 75, , % -5,357 $16 - $18 $27 - $29 B 972,346 62,581 2,397 82, % -16,27 $ $15.5 $ $27.5 C 348,198 28,28 1,137 29, % 1,4 $9.5 - $11.5 $ $23.5 4,215,8 373,482 97,83 47, % -2, Partnership. Performance

11 Market conditions improving as vacancy tightens surrey Vacancy Rate Vacancy trends Vacancy slipped to 13% at mid-year 217, its lowest point since year-end 212 and down from 17.5% just 12 months earlier. Deal velocity has been rising as improved market activity and an increase in tours resulted in leases being completed. TransLink reoccupied space that it had listed for sublease in Station Tower, while McQuarrie Hunter occupied its new premises in Central City. Several small- to mid-sized occupancies combined to exert further downward pressure on vacancy. With the market tightening, there are limited large-block opportunities, although several options remain for small- to mid-sized tenants. absorption trends First-half absorption of 92,936 sf represented the third consecutive occurrence of positive absorption during the first six months of the year in Surrey. TransLink re-occupied much of the space it had previously listed for sublease in Station Tower, while McQuarrie Hunter absorbed more than 7,64 sf at Central City. More than 22, sf was absorbed in Surrey 25.% 2.% 15.% 1.% 5.%.% 17.3% -137, % Vacancy and Absorption 17.5% Vacancy Absorption 12-month projection based on 1-year average absorption and known net absorption in new inventory 15% 13% 1.5% Mid F 14,475 36,751 Head Lease Vacancy 237,51 92,936 Central Business Park by a range of tenants. Leasing activity also occurred at the former Coast Capital Savings Building where S.U.C.C.E.S.S. occupied 9,817 sf, and at the former RCMP headquarters, where Pattison Sign Group (3,4 sf ) and DMC LLP (2,5 sf ) took occupancy. new construction 24,269 3, 25, 2, 15, 1, 5, -5, -1, -15, -2, Absorption Lark Group s City Centre 2 is under construction and set for completion in early 218. The 12-storey strata office/ retail building is 75% occupied with 1% of the office space sold. Some retail space remains available. The Professional South Point is to break ground in the third quarter of 217. The four-storey mixed-use building contains almost 72, sf of office space, 3% of which is preleased prior to its scheduled completion in the last quarter of 218. The long-proposed GTC Professional Building, a five-storey, 1,55-sf office building, will now apparently proceed on spec when it breaks ground in the second quarter of 218. market forecast Rental rates have remained flat, but with vacancy in decline since 215, landlords are looking to push rates. Upward pressure on rates is expected in the next six to 12 months as landlords grow more bullish. Absorption is anticipated to remain positive in 217 and vacancy will likely decline further by year-end as deal activity remains healthy and the market continues to improve. recent lease deals - Mid-Year 217 DEVELOPER BUILDING SF PRELEASE SF PRELEASE % COMPLETION Century Group 3 Civic Plaza 5, (office) Strata 1% Sold Q4 217 Lark Group City Centre 2, A Street 172, (office) Strata 1% Sold Q1 218 Avondale Development / Monark Group Sublease Vacancy The Professional South Point, nd Street Vacancy (%) 71,78 21,534 3% Q4 218 Landview Construction GTC Professional Building, rd Street 1,55 % PCI Group The Hub at King George (phase 2), 99 King George Boulevard (office/retail) Gateway Place was delivered to the market fully leased. tenant BUILDING SF Undisclosed tenant Gateway Place 5, Metis Family Services Surrey Central Business Park 15,2 Stenberg College International 16 King George Highway 11,5 ParaMed Surrey Central Business Park 9,57 McQuarrie Hunter LLP Central City 7,64 absorption A 2,74, ,458 5,12 258, % 55,35 $2 - $3 $34 - $43 B 626,1 89,34 89, % 28,325 $15 - $19 $28 - $31 C 25,629 3,342 3, % 9,576 $11 - $13 $25 - $27 2,96,67 373,14 5,12 378,242 13% 92, Awaiting prelease 17, % Planned 11

12 new Westminster Vacancy elevated but relief possible by year end Vacancy Rate Vacancy trends Vacancy remained elevated at 17.5% at mid-year 217 the highest recorded vacancy since mid-year 26 and up from 16% 12 months earlier. Leasing activity was minimal with only small moves within the submarket during the first half of 217. The vast majority of vacancy exists in class A space 26.5% with two-thirds of that space located in the 137,-sf Anvil Centre, which has been 1% vacant since it was built in 214. Evolution Gaming announced in April 217 that it would lease 16, sf in the Anvil Centre, which may finally represent a turning point for the building and the submarket as a whole with further deals anticipated in the second half of 217. While vacant sublease space remained limited at midyear 217, almost 41, sf is currently being offered at 55 6th Street with the BC Safety Authority occupying the space until December 217 before relocating to the Renfrew Centre in Vancouver. Absorption trends Negative absorption of -7,86 sf was the result of a flat market that recorded limited leasing activity in first-half 2.% 18.% 16.% 14.% 12.% 1.% 8.% 6.% 4.% 2.%.% 178,35 9.3% 16.8% -1,478 Vacancy and Absorption 15% 29,444 Vacancy Absorption 12-month projection based on 1-year average absorption and known net absorption in new inventory 17% -33, % 217. Class A absorption gains due to Manheim Auto Canada and Academics PreKindergarten occupying 628 6th Street were reduced by Dye & Durham downsizing at 62 Royal Avenue. Class B negative absorption of -11,552 sf, which offset modest absorption gains in class A space, was driven largely by Avocette Technologies vacating 8,6 sf in Royal City Centre to relocate to its own building at 422 Sixth Street. Three small tenants who vacated the New Westminster Medical Building also contributed negative class B absorption of -2,465 sf. new construction % 28, Mid F Head Lease Vacancy -7,86 2, 15, 1, 5, -5, Absorption Rate QuadReal Property Group s proposed Sapperton Green development adjacent to the Braid Street SkyTrain station continued to proceed as the developer worked through the rezoning permit application. City council recently endorsed the project s preliminary master plan concept. It is estimated the development will include up to 1.5 msf of commercial space when completed. A valid and Queens Court in New Westminster is one of several options for tenants. active development permit for two office buildings up to 4, sf still remains in place for the property, but a prelease commitment would be necessary to kick-start construction. market forecast Rental rates are likely to remain flat with the potential for some upward pressure as landlords seek to push rates after years of low to no growth. There is potential for the uptick in leasing activity occurring in neighbouring submarkets to spill over into New Westminster. A number of educational groups are said to be considering the submarket and subsequent activity could lead to positive absorption by year-end 217. However, any gains may be offset if BC Safety Authority s premises are returned to the market as vacant sublease space at the end of 217. DEVELOPER BUILDING SF PRELEASE SF PRELEASE % COMPLETION QuadReal Property Group Sublease Vacancy 97 Braid Street (near Braid Street SkyTrain station) part of Sapperton Green mixed-use redevelopment site Vacancy (%) recent lease deals - Mid-Year 217 tenant BUILDING SF Evolution Gaming Anvil Centre 16, Spirit of the Children Society (renewal) 768 Columbia Street 11,5 Academics PreKindergarten Royal City 628 6th Avenue 6,3 Up to 4, (office) absorption % Proposed A 78,114 24,115 2,358 26, % 3,692 $18 - $25 $31 - $38 B 7,684 74,34 74,34 1.6% -11,552 $12 - $18 $25 - $3 C 27,774 14,51 14,51 7% $1 - $12 $22 - $25 1,688, ,956 2, , % -7, Partnership. Performance

13 Vacancy rising as new space set to deliver north shore Vacancy and Absorption 14.% 4, 12.% 16,128 6, % 2, Vacancy Rate 1.% 8.% 6.% 4.% 8.5% 7.8% 7.3% -7, % 9.8% -26,282-4,391-2, -4, -6, Absorption 12-month projection based on 1-year average absorption and known net absorption in new inventory Vacancy trends Office vacancy on the North Shore climbed to 9.8% at mid-year 217 an increase from 7.2% at mid-year 216 primarily as a result of WorkSafeBC relocating to Port Moody and ICBC downsizing. Class A vacancy reached 9% at mid-year 217, up from 6% 12 months earlier. Deal velocity increased slightly during the first half of 217, while sublease vacancy tightened to less than 1% at mid-year 217 from 1.4% 12 months earlier. With a significant amount of new vacant space being delivered at CentreView in the second half of 217, vacancy is expected to rise further by year s end and tenants will have more options than typically available. absorption trends First-half 217 negative absorption of -26,282 sf was the largest negative absorption in the first six months of any given year since Avison Young started tracking this submarket in 22. The departure of Work- SafeBC from 224 West Esplanade and ICBC downsizing by 12, sf at 221 West Esplanade are the primary reasons for the surge in negative absorption. CentreView will add another 78,8 sf of office space in the 2.%.% -86, Mid F Vacancy Head Lease Vacancy Absorption second half of 217. Approximately 58% of the office space in Onni s new building is preleased; however, CentreView s largest tenant, COWI North America, is relocating from its existing premises on the North Shore and will largely negate any positive absorption generated by the move. New Construction Construction will break ground in third-quarter 217 on Hollyburn Properties new mixed-use development in Central Lonsdale and includes 13,89 sf of office space that will be demised into smaller units for lease. While Concert Properties received rezoning approval in 214 along with a subsequent rezoning amendment in 215, a development permit application has not been submitted and the proposed Harbourside development is not anticipated to break ground in 217. Sublease Vacancy Vacancy (%) Hollyburn s New mixed-use development in central Lonsdale will include retail and office space for lease. absorption market forecast Rental rates have remained stable, but downward pressure will likely manifest later in 217 as vacancy rises when new space comes to the market and activity levels increase by way of tenants shifting in the submarket. Tenant inducements are likely to grow due to the rise in vacancy and the transition of the North Shore to more of a tenant s market. Strata office sales will remain strong as values continue to appreciate due in part to a limited inventory and a lack of new supply. recent lease deals - Mid-Year 217 tenant BUILDING SF Pro Arté Performing Arts in Motion Ltd East Keith Road 15,3 (renewal) Acciona Infrastructure Canada Inc. & 98 West 1st Street 6,4 Acciona Canada Inc. (sublease) Park Place Daycare & Montessori 124 East 15th Street 6,34 BA Blacktop (sublease) 111 Forester Street 6,15 Multivista Construction Documentation 111 Forester Street 4,42 Inc. i-worx 152 Barrow Street 3,3 DEVELOPER BUILDING SF PRELEASE SF PRELEASE % COMPLETION Polygon West Quay, 26 West Esplanade (mixed use) 18,34 Strata 1% Sold Q3 217 Onni Group CentreView, 138 Lonsdale Avenue (mixed use) 78,8 46, 58% Q3 217 Harbourview Projects East Esplanade, 35 & 37 East Esplanade 22,443 (office/ showroom) Strata 9% sold Q4 217 Hollyburn Properties Lonsdale Avenue and West 14th Street 13,89 % Q1 22 Concert Properties 81, 889 & 925 Harbourside Drive and 18 Fell Avenue TBD % Proposed A 793,13 61,522 9,61 71,132 9% -3,29 $22 - $3 $35 - $45 B 481,392 51,682 3,552 55, % 3,152 $18 - $2 $31 - $33 C 97,69 8,247 8, % 856 $16 - $17 $29 - $31 1,372,98 121,451 13, , % -26, , -1, 13

14 suburban development timeline Centreview 138 lonsdale avenue West Quay 26 West Esplanade East Esplanade 35 & 37 East Esplanade Broadway Commercial 988 West Broadway The independent at main 288 East Broadway Q3 217 Q3 217 Q4 217 q4 217 Q1 218 city North Shore North Shore North Shore Vancouver-Broadway Vancouver-Broadway Developer Onni Group Polygon Harbourview Projects BlueSky Properties Rize Alliance Storeys 5 2 floors floor office sf 78,8 18,34 sf 22,443 sf 94,12 17, tenants 37, sf - COWI North America Strata Strata 75, sf - ia Financial Group No tenant at this time 9, sf - medical tenants Occupancy 58% 1% 9% 8% % The Lightworks Building 22 East 5th Avenue City centre A Street 24 West 6th Avenue 565 Great Northern Way 34 w7 34 west 7th Avenue Q1 218 Q1 218 Q2 218 q2 218 q3 218 City Vancouver-Broadway Surrey Vancouver-Broadway Vancouver-Broadway Vancouver-Broadway Developer PC Urban Properties Corp. Lark Group Rendition Developments / PCI Group Chard Development MDC Property Services Storeys office sf 53,2 172, 27,8 17, sf 54,347 tenants 46, sf - Saje Natural Wellness Strata No tenant at this time 95, sf - Kit and Ace Strata 3,884 sf - Tacofino Occupancy 95% 1% % 56% 75% Station Square 66 Silver Avenue 275 WEst 5th Avenue The George 1157 Parker Street South Point nd Street Kings Crossing 735 Edmonds Street q3 218 q4 218 Q4 218 Q4 218 Q2 219 City Burnaby Vancouver-Broadway Vancouver-Broadway Surrey Burnaby Developer Anthem Properties PC Urban Properties Corp. Porte Commercial Avondale Development / Cressey Development Group Monark Group Storeys Two floors office sf 52,84 sf (office) 7,915 34,38 sf 71,78 sf 7,43 sf (lease/strata) tenants No tenant at this time 48, sf - SEGA No tenant at this time Undisclosed tenants Strata Occupancy % 68% % 3% 15% 14 Partnership. Performance

15 rapid transit en route to Broadway corridor Source: TransLink special feature Demand for office space along the Broadway corridor is boosting the business case for delivery of a rapid transit line that appears to be finally moving forward after years of discussions and negotiations. Both the federal and provincial governments have agreed to provide 8% (or $4.4B) of the proposed budget for the SkyTrain Millennium Line extension and Surrey s LRT plan. The remaining 2% will be covered by local municipalities. The Broadway corridor, which is home to the second largest job centre in BC and connects the largest university and largest hospital in Western Canada, is widely considered the busiest bus route in Canada and the U.S. Existing transit service on the corridor is deemed insufficient to meet current demand and wholly incapable of matching future demand. Rapid transit along the Broadway corridor will be required if the growing demand for office space and other commercial amenities in the area is to be met. Demand for office space along the Broadway corridor (aka the core) pushed vacancy up to 2.4% at mid-year 217 an increase from 1.7% at yearend 216 as rents for class A space approach levels comparable to the Downtown core. The 3.6-msf submarket which is larger than the Yaletown, Surrey, New Westminster and North Shore submarkets has the tightest office vacancy rate in Metro Vancouver. Yaletown is the next closest at 3.9%. The six-kilometre Millennium Line extension would be primarily tunneled below Broadway and would start at the existing VCC-Clark SkyTrain station and run on an elevated track for about 8 metres to the first of six new stations, Great Northern Way. The extension would then tunnel under Broadway with underground stations at Main Street, Cambie Street, Oak Street, Granville Street and Arbutus Street. The Cambie Street station would feature full underground integration with the existing Broadway- City Hall station of the Canada Line. While this first phase would initially end at Arbutus, subsequent phase(s) could see rapid transit eventually extended to the University of British Columbia. The majority of new office development in the Vancouver-Broadway submarket has clustered along the Broadway corridor (or the core), including Broadway Commercial at Oak Street, the Independent at Main at Main Street and Broadway and 565 Great Northern Way near the proposed Great Northern Way station. More than half a dozen office/light industrial buildings are under construction in Mount Pleasant, which is located between the proposed Cambie Street and Main Street stations. There are also three new office buildings proposed within a block or two of Broadway and Cambie Street as well as additional Millennium Line Extension by the numbers: Length: 6 km stations: six cost: $2B+ completion date: 224 Source: TransLink office/light industrial projects in Mount Pleasant. All of this new employment space further reinforces the need for the expansion of transit capabilities serving the Broadway corridor. From an investment perspective, dozens of commercial real estate deals along the Broadway corridor have been concluded in the past 24 months. Many of these deals were concluded in anticipation of a rapid transit line being constructed and the likelihood of increased density that would accompany such a transit infrastructure project. However, this significant investment in developing additional residential and commercial space will also further strengthen the need and demand for rapid transit service along the corridor. Benefits of the Millennium Line extension include improving transit connectivity, reduced commute times, more road space for goods movement, a reduction in operating costs and an increase in transit capacity, according to the City of Vancouver and TransLink s most recent Millennium Line Broadway Extension Project Update released June 19. It should be added that just the potential of this transit infrastructure investment has served as a catalyst for development of office space along the Broadway corridor. This investment activity, which is already taking place with office projects under construction, will also spur additional commercial and residential development that benefit citizens and business alike. 15