CBRE's managing director Norm Taylor takes in the view from the 35-storey MNP Tower
This year will see an unprecedented increase in prime office space for downtown Vancouver. It reflects a decade of pent-up desire finally being realized—and also a fundamental shift in how we work and view the workplace
Moving offices—much like moving homes—is the sort of thing that you only do by threat or incentive. For management, it’s expensive, disruptive and punishingly time-consuming. And for employees, it triggers dread of the unknown. Where will I park my car? Is there anywhere decent nearby to grab lunch? And do I get to keep my favourite chair?
Until recently, at least in the downtown Vancouver office market, these weren’t questions being asked with any regularity. While Vancouver has traditionally added about 200,000 square feet of new office space per year, there has been scant new supply since the economic downturn in 2008. Then, in 2015, that all changed—and in rather dramatic fashion. With the retrofit of the old Sears/new Nordstrom building at 725 Granville and the new Telus Garden on West Georgia leading the way, Vancouver is enjoying an injection of new space that will amount to 2.1 million square feet over the next two years—most of it by this Christmas. That’s twice as much new space as has ever been introduced into the Vancouver market in a single year.
It is also an overdue burst of breathing room, most of which is already booked by eager new tenants. They’re choosing from boutique-style tiny floorplates to sprawling football fields, from stylish—and sustainable—heritage retrofits to the most prestigious (and ostentatious) new address in the city. Even their leftovers will be tempting enough to trigger an excited round of musical offices—one where the last player standing still finds someplace amiable to sit.
One of those companies on the move is commercial real estate brokerage CBRE. Two years ago, company management came to the realization that their Vancouver office, with its 125 employees, had long outgrown its space in the Fortis Building at West Georgia and Thurlow. Knowing that a move would strain its staff, the leadership team was determined to make the hassle worthwhile. With the foresight that comes when it’s your business to track every centimetre of office space in the city, CBRE looked into the hottest construction project on the horizon and chose the MNP Tower—a slender, sweeping black form that now flatters the Marine Building at Burrard and West Pender.
The MNP space is open and airy, both austere in design and surprisingly natural, with real trees growing just off the centre core of every floor. At 35 storeys—and with nine-foot windows wrapping the building—the Tower offers breathtaking vistas in every direction, perhaps most spectacularly to the north, where you look out between the Shaw Tower and the Fairmont Pacific Rim to Burrard Inlet and the North Shore mountains. “I’ve yet to see a single person sit down on the furniture in our waiting room,” says Norm Taylor, managing director of CBRE’s vertiginous Vancouver office. “Everyone just stands right up to the window and stares at the view.”
One of the challenges with the tower is its surprisingly tiny floorplate. According to Ashley O’Neill, CBRE’s vice president of corporate strategy, who helped manage CBRE’s move, the average Vancouver office building has a floorplate of between 12,000 and 15,000 square feet; the MNP Tower, by contrast, is just 8,000 square feet—with only 6,500 square feet of it actually rentable (once you subtract room taken up by elevators, etc.). This is a great space for a small firm that still wants to give you that we-own-the-floor feeling when you step off the elevator. But it’s a potential nightmare for a big organization that wants an open office with huge teams of people, all within shouting distance. Think of Microsoft and Sony, which have taken the top three floors of 725 Granville Street—at 72,000 square feet per floor.
But CBRE chose to make merit of what might have been a liability, connecting its staff vertically rather than horizontally. Working with the architects and builders, they arranged for a building floorplan that would allow for much bigger staircases—four feet wide with two landings each. Then they distributed the staff strategically throughout their four floors—and locked off the elevators on the upper storeys. Want a coffee? Step away from the sit-stand desk and walk the stairs. Want to chat with the investment staff on 28 or the retail brokers on 26? Walk the stairs. And everybody, coming and going, must pass through reception on 25.
“Ours is a business of information—of the exchange of ideas and strategies,” Taylor says. “We need to know what’s happening. We want people talking all the time, and not just in structured meetings. So we want those collisions.” And the stairway landings turn out to be the best impromptu meeting spaces any office worker has ever used. Employees started moving in late spring, and by the end of summer, workers were finishing off the last splashy art installations. And the reviews are all raves. Employees are alternatively sitting, standing, stopping on the staircase, staring out the window and generally bragging about the space. CBRE even hired Loren Bergman, who had been head of interior design at the architecture firm Perkins + Will, to be their new director of workplace strategies so they could share the lessons they’ve learned with new clients on the move.
Of course, if you’re looking for an address to boast about—space with serious swagger—you pretty much have to look at Telus Garden. At 448,000 square feet, it’s the largest of the new buildings opening this year (MNP is 270,000; 725 Granville is 300,000). In its effort to re-orient the city and to reset the bar for environmentally progressive construction, it’s also the most ambitious.
Given the principals involved, that ambition is no surprise. The project was a collaboration between one of the city’s corporate titans, Telus CEO Darren Entwistle, and Westbank Projects Corp. president Ian Gillespie, the developer behind such Vancouver landmarks as the Shaw Tower on Cordova, the neighbouring Fairmont Pacific Rim and the Shangri-La. Gillespie enlisted his long-time collaborator Gregory Henriquez, the architect responsible for Gillespie’s Woodwards redevelopment and 60 West Cordova, to help design a building that would raise the bar for environmental accomplishment and reset the emotional centre and principal orientation of Vancouver’s increasingly pedestrian-friendly downtown.
The eye-stopping result is both lavish and literal, especially if you’re looking north or south on the adjacent streets. With a 300-foot east-west, street-level canopy and a four-storey cantilevered free form that runs through the building and extends, controversially, from the middle of Seymour to the middle of Richards, Telus Garden has broken the north-south dominion of those two traffic streets and, finally, connected West Georgia from the pedestrian thoroughfare on Granville toward the library, the Queen Elizabeth Theatre and, soon, the big park where the viaducts once stood.
Inside, the spaces feel capacious and the construction is all LEED (Leadership in Energy and Environmental Design) Platinum. Thanks to a triple-glazed building envelope, supplemented by sunshades and solar panels, Telus Garden will consume 80 per cent less energy than a conventional building. And tapped into the waste heat from the Telus server farm across the alley, it will actually draw 97 per cent less energy from the grid. It, too, has nine-foot windows and, with pressurized, raised floors that contain both the 100-per-cent fresh air ventilation system and all services (from wiring and plumbing to computer cabling), the 10-foot-six ceiling height is clear and unobstructed, underfoot and overhead. It’s even got 23,000 square feet of exterior deck space, equal to an additional floor, given that its floorplate is a little more than 22,000 square feet.
Then again, not everyone has the budget to outbid Amazon, Capstone Mining or law firm Bull Housser for the most prestigious new space in town, nor the appetite to relocate in this kind of splashy new building. Consider HCMA, an architecture firm that recently moved from what was—when they designed and built it themselves in 1986—a boldly avant-garde concrete and glass space under the Granville Street Bridge. With that history, you might imagine HCMA’s new home to be some experimental structure in the latest trendy neighbourhood. Instead, they now occupy the fourth floor of 16 in the 84-year-old art deco Royal Bank building at Granville and Hastings.
The former bank—at 685 West Hastings—was designed as the first of two mirrored parts, but when it was completed in 1931, the Depression left it an orphaned twin. The main-floor Florentine banking hall is still fantastic, with towering ceilings and 900-kilogram brass chandeliers. But when Uptown Properties bought the building four years ago, it was dowdy and distressed, with a 40 per cent vacancy rate. When you think of the rating system for commercial space, MNP and Telus Garden certainly earned their AAA status, while the run-down Royal Bank building richly deserved its bottom-drawer C-class designation.
(The building class system is about what you’d expect: A is state of the art; it’s the top class in Toronto. But the strivers in Alberta (AA) and Vancouver (AAA) have added extra letters to indicate which are the most up-to-date and prestigious addresses. According to a primer shared by CBRE, B-class buildings are “adequate (but not state of the art)” in their mechanical, electrical and life safety systems, with a mid-quality level of interior finish. And C-class buildings “are generally dated and the quality of finish is often below average.” This is where you get the good deals on space.)
But Uptown vice-president Bart Slotman bristles if you call his building C-class today. “It’s C-class by age,” he admits, grudgingly. “But we’re getting rental rates comparable to rates in A or even triple-A buildings.”
The reason is the renovation. Over the last 18 months, Uptown has been going through, floor-by-floor, and scraping the space back to bare concrete. They tore out T-bar ceilings and cut four-inch trenches in the floor to run all new services, and they installed the same variable refrigerant flow air exchange and conditioning system as in the MNP Tower, as well as the same style of indirect (often LED) lighting. With new double-paned windows and the original 1.5-foot, massive walls, Slotman says the building actually performs remarkably well from an energy and efficiency standpoint. “You have high-tech, state-of-the-art interiors in this beautiful heritage building.” And you’re a block from SkyTrain and the SeaBus and at a central connecting point for every bus route in the city.
Unlike CBRE’s vertical move, HCMA associate Paul Fast says it was “an absolute deal breaker” for the firm to be on one floor—which, given its size, was accomplished nicely in the building’s 7,500-square-foot floorplate. And the space is, as you’d expect of an architecture office, exquisitely tasteful and perfectly efficient.
In a year of such new-building splash, there remains a concern that, when the music stops, a lot of space will be standing empty. Colliers shows that Vancouver’s vacancy rate has already crept up to 10 per cent (still the envy of Calgary, which Colliers predicts will be facing a vacancy rate of more than 17 per cent within the next two years). But Norm Taylor says CBRE’s analysis shows the market fully absorbing all the new room—helped by steady growth among existing businesses and the arrival of big new high-tech tenants. Microsoft, Amazon and Sony have absorbed 300,000 square feet—that’s net new space—just this year.
And even old buildings, well managed, are holding their own. Slotman says that with the pace of renovations and current commitments, the Royal Bank building will be 95 per cent full by December. And Mark Rahal of Equitable Properties says their four C-class structures, with a combined total of 310,000 square feet, currently have a vacancy rate of just 2.5 per cent. Some of that can be explained by location and a historic allure: the Equitable portfolio includes the Vancouver Block across from Nordstrom and the Rogers Building at Granville and Pender. But Rahal says the Duncan Building, on West Pender kitty-corner from Tinseltown, “has been zero per cent for some time”—bustling with high-tech start-ups rather than established majors.
Offices are no longer just a place where people come to work; they are increasingly a critical part of staff attraction and retention. When showing buildings, Uptown’s Bart Slotman says he used to tour around the CEO or CFO. Not these days. “Now we’re seeing the head of HR. It’s not just real estate anymore. You really need the right environment to be successful.” ■