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

South Okanagan MP Richard Cannings wants to see dental coverage for all Canadians. (courtesy of Pixabay)
OPINION: South Okanagan MP fights for universal dental care

One in three Canadians have no dental coverage, with COVID making it even worse

Dep. Fire Chiefs Rich Piché (left) and Stephane Dionne said they were disappointed that only one person showed up at the George Evans fire hall’s recruitment drive Tuesday evening, May. 11. Photo: Laurie Tritschler
Grand Forks Fire/Rescue says rural fire hall at risk of closing

Home insurance could spike across North Fork if George Evans fire hall loses fire protection status

Adam Hamdan has been living in Christina Lake since November 2020. Photo: Laurie Tritschler
Christina Lake man given temporary residence in Canada

Adam Hamdan had been facing deportation to Jordan, where he holds citizenship through his Palestinian parents

Ted Invictus (left) pulls a piano through the crosswalk between Market Avenue and 2nd Street as Nathan Vogel plays a few notes Monday morning, May 10. Photo: Laurie Tritschler
Music-lovers deliver street piano in Grand Forks

Musician gives one-handed performance as volunteers rolled the Heintzman through the city’s main street

Thursday, Feb. 4: RDKB Chief Engineer Darryl Funk hoists a banner commemorating last year’s championship season by the Bantam House Bruins. Photo: Laurie Tritschler
Bantam Bruins honoured at hair-raising banner ceremony at Grand Forks’ Jack Goddard Arena

Asst. coach Mike Tollis said he reluctantly gave in to the team’s victory wish that he cut his pony tale

The bodies of Carlo and Erick Fryer were discovered by a local couple walking on a remote forest road in Naramata on May 10. (Submitted)
Kamloops brothers identified as pair found dead near Penticton

The bodies of Carlo and Erick Fryer were discovered by a local couple walking

Municipal governments around B.C. have emergency authority to conduct meetings online, use mail voting and spend reserve funds on operation expenses. (Penticton Western News)
Online council meetings, mail-in voting option to be extended in B.C.

Proposed law makes municipal COVID-19 exceptions permanent

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

A nurse prepares a dose of the COVID-19 vaccine in Kelowna on Tuesday, March 16. (Phil McLachlan/Black Press)
British Columbians aged 20+ can book for vaccine Saturday, those 18+ on Sunday

‘We are also actively working to to incorporate the ages 12 to 17 into our immunization program’

The AstraZeneca-Oxford University vaccine. (AP/Eranga Jayawardena)
2nd person in B.C. diagnosed with rare blood clotting after AstraZeneca vaccine

The man, in his 40s, is currently receiving care at a hospital in the Fraser Health region

Brian Peach rescues ducklings from a storm drain in Smithers May 12. (Lauren L’Orsa video screen shot)
VIDEO: Smithers neighbours rescue ducklings from storm drain

Momma and babies made it safely back to the creek that runs behind Turner Way

Signage for ICBC, the Insurance Corporation of British Columbia, is shown in Victoria, B.C., on February 6, 2018. THE CANADIAN PRESS/Chad Hipolito
$150 refunds issued to eligible customers following ICBC’s switch to ‘enhanced care’

Savings amassed from the insurance policy change will lead to one-time rebates for close to 4 million customers

The Libby Dam on the Kootenai River in Montana. The dam created the Koocanusa Reservoir, which straddles the B.C./Montana border. (photo courtesy Wikipedia)
Outflow at Libby Dam to be increased

Volume increase to aid migration and spawning conditions for endangered white sturgeon in the Kootenai River

Most Read