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A Look at the Suburban Office Market 25.0% Suburban Historical Vacancy 2010-2015 YTD 20.0% 15.0% 19.1% 17.6% 16.3% 14.4% 11.6% 10.0% 5.0% 5.7% 0.0% 2010 2011 2012 2013 2014 2015 YTD Burnaby Richmond New Westminster North Shore Surrey Langley 2
A Look at the Suburban Office Market 800,000 Historical Absorption 2010-2015 YTD 600,000 400,000 200,000 Square Feet - (200,000) 2011 2012 2013 2014 2015 YTD (400,000) (600,000) (800,000) (1,000,000) (1,200,000) Suburbs - 485,462 SF Total Absorption Downtown - 275,395 SF Total Absorption 3
Suburbs New Supply Under Construction SOLO District Office 2025 Willingdon Ave, Burnaby King George Station 9808-9900 King George Hwy, Surrey TPC at South Point 3231 152 nd St, Surrey Gateway Place 13479 108 th Ave, Surrey 3 Civic Plaza 10341 City Parkway, Surrey CentreView 1308 Lonsdale Ave, North Vancouver Appia Group PCI Avondale Development Bosa Properties Century Group Onni Group of Companies Estimated Completion Date: Q2 2016 Estimated Completion Date: Q4 2015 Estimated Completion Date: Q1 2017 Estimated Completion Date: Q2 2016 Estimated Completion Date: Q4 2016 Estimated Completion Date: Q4 2017 (SF): 230,000 (SF): 164,000 (SF): 116,000 (SF): 60,000 (SF): 50,000 (SF): 78,800 Approximate % Preleased: 9% Approximate % Preleased: 72% Approximate % Preleased:0% Approximate % Preleased: 0% Approximate % Preleased: 60% Approximate % Preleased: 0% N/A Tenants: Coast Capital Savings N/A N/A Tenants: Kwantlen Polytechnic University N/A 4
Suburbs New Supply Approved Discovery Place Phase III 3555 Gilmore Way Market: Burnaby GTC Professional Building 10189 153 rd Street Market: Surrey City Centre 2 Market: Surrey Kingswood Capital Landview Construction Lark Group (SF): 50,000 Status: Waiting for prelease commitment (SF): 100,000 Status: Waiting for prelease commitment (SF): 180,000 Status: Construction slated to being in upcoming months 5
Suburbs New Supply Proposed Market Project Broadway Tech Centre East Campus (SF) 975,000 - Phased Development of Five Buildings Burnaby 4750 Kingsway (Metrotown) Two Office Towers Gilmore Station Up to 1,000,000 Brentwood Town Centre One or Two Office Towers Richmond 4700 No. 3 Road Nine-Storey Building Ampri International Gateway Centre 100,000 Surrey 9677/9681 King George Blvd 177,500 New Westminster 1010 Braid Street 360,000 North Vancouver 801 Harbourside 210,000 Total Approximately 3.9 million square feet 6
A Look at the Suburban Office Market 7
A Look at the Suburban Office Market Large Block Availability -Suburbs (40,000 SF+) Market Building Available Area sq. ft. Lease Type Class Headlease Burnaby Metrotower III 299,295 Headlease A Burnaby 3777 Kingsway 199,511 Sublease A Burnaby Nokia Building 62,400 Headlease A Burnaby Glenlyon Business Park 61,833 Headlease A Burnaby Metrotower II 56,518 Headlease A Burnaby 3500 Gilmore Way 56,201 Headlease A New Westminster Anvil Centre 137,330 Headlease A Fraserwood Corporate Richmond Centre 77,000 Headlease B Surrey Central City 77,162 Headlease A Surrey 15117 101st Avenue 56,413 Headlease B Total Space 10 1,083,663 * 9 blocks between 20,000-40,000 square feet 8
Suburban Office Insights
Suburban Office Insights - Migration! Suburban leases are 75% larger than downtown leases o!average suburban lease is 9,600 square feet o!average downtown lease is 5,500 square feet! Virtually no migration to downtown from suburban areas! 94.3% of transaction activity affecting tenants in the suburbs is either relocation to a suburban location or renewal! Suburban tenants have a tendency to renew in place (39.0%) or to relocate to another suburban location (40.7%) 10
Suburban Office Insights - Transit! Tenants perceive that transit stations primarily offer amenities!! Not just transit! Many companies less concerned with proximity to mass transit!! Bus service is viewed as desirable, parking is essential! Be near employees homes! Suburban tenants have suburban clients, projects!! Few downtown contacts 11
Suburban Office Insights - Commuting! 33% of workers say they would work an extra three hours per week in exchange for a reasonable commute! 50% state commute time would be main deciding factor! Most Likely to Move Out of Core!! 30-39 Year Olds!! New Parents!! $70K to $100K Income!! College & University Educated (Bachelor s)!! Generation Y in this phase now 12
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