Photo Credit: Wikipedia
The pandemic put all the commercial real estate markets in Canada to the test, but the unprecedented market conditions weren’t enough to cause any serious damage. Most of the markets proved resilient, and they are already on a path to a quick recovery.
Canada’s most resilient CRE submarket seems to be Mount Pleasant, Vancouver’s vibrant and eclectic neighbourhood, known for its historic houses, art galleries and festivals, and a booming commercial market. Vancouver was not hit as hard as some other markets, such as Calgary, which recently witnessed record-high office vacancy rates.
Four decades ago, Mount Pleasant had a largely industrial CRE market, with manufacturers, wholesalers, and repair shops being some of the top tenants occupying the space. The last two decades of Mount Pleasant’s CRE development transformed the neighbourhood into a melting pot of CRE investment.
Ever since Vancouver hosted the Olympic Winter Games in 2010, the city’s real estate market started booming. CRE investors began flocking to the city, which turned to light industrial zoning to meet the growing demand for office space.
The Broadway Subway Project, a 5.7 km extension of the Millennium Line set to open in 2025, is one of the recent developments that will connect the communities and the region. It will create more housing and job opportunities, with the new infrastructure offering more space for residential and commercial buildings. This project is only one example of the city’s innovative and rapidly-growing community.
Mount Pleasant is Vancouver’s tightest office submarket, and it remained such even during the pandemic.
In the second quarter of 2021, Downtown Vancouver had a 6.6% office vacancy rate (the lowest in North America), while Metro Vancouver witnessed the second-lowest industrial availability rate, coming in at 1.1%.
When the pandemic hit, Mount Pleasant’s office vacancy rate was nearly the same as Downtown Vancouver’s CBD (Central Business District). However, the latter submarket has nearly 20 million square feet of office space more than the former, which means that Mount Pleasant’s office space was filled to the brim.
In the second quarter of 2021, its office vacancy rate dropped even further, coming in at 5.4%. The CBD’s office vacancy rate still hasn’t changed.
Thanks to the Broadway Subway Project, Mount Pleasant has a growing number of CRE developments in progress, along with many others still in the planning stage.
Many of them will be light industrial real estate properties, offering spaces for retailers, manufacturers, and business owners.
Ofiswerks, an office and flex strata project by Formwerks, will bring new business offices and help the owners build equity.
Other CRE developers and investors with significant Mount Pleasant projects in the works include PCI Developments, HOOPP, and Lululemon.
Mount Pleasant is set to lead as Canada’s strongest CRE submarket, offering plenty of profitable CRE investment opportunities, which weren’t in shortage even at the onset of the pandemic. Investors looking at the Canadian CRE market are bound to benefit if they set their eyes on Mount Pleasant.