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News release


Demand remains high for space near rapid transit stations in Metro Vancouver

Report reveals tenants prefer office buildings within walking distance of rapid transit stations

VANCOUVER, B.C.,​ June 20, 2016 - ​​​JLL’s​ (NYSE: JLL) most recent Rapid Transit Office Index (RTI) study reaffirms that office tenants outside of Downtown Vancouver continue to focus on office buildings within walking distance of rapid transit stations when evaluating their real estate requirements. The sixth Metro Vancouver Rapid Transit Office Index released last week provides an in-depth analysis of the peaking market of rapid transit oriented office vacancy, absorption and occupancy cost trends in suburban markets that are serviced by rapid transit.

While demand for transit oriented office space remains steady, vacancy decreased 20 basis points and asking net rents have decreased 1.5 percent. Over the past ten years, there has been an increasing amount of office developments constructed within 500 meters of rapid transit stations. In 2015 to present, there has been a total of 593,067 square feet delivered between four buildings. 

Three of these buildings were built directly on rapid transit lines – Marine Gateway at Marine Drive Station, Renfrew Centre at Renfrew Station, and the HUB at King George Station. The fourth building, Station Square in Burnaby, is located within a ten minute walk of a SkyTrain station. Additionally, there is 520,318 square feet comprised of seven buildings due for delivery in 2016, with a further 474,273 square feet due in 2017.

This substantial amount of inventory has impacted the vacancy rate and created a competitive environment in which rental rates have softened. However, interest for transit oriented office space remains high and a decrease in the vacancy rate is expected as the market adjusts to the new inventory.

“Rapid transit proximity remains one of the most significant considerations for office tenants when evaluating real estate requirements in Metro Vancouver,” said Mark Chambers, Executive Vice President of JLL Vancouver’s Office Leasing team. “With the reduced amount of square feet per person, it has become harder for employers located away from transit to attract talent due to parking space limitations. With demand for transit high, developers are placing an increasing importance on transit orient developments. They are also placing an importance on including urban amenities, such as end of trip facilities, to developments to increase their appeal.”

JLL's study analyses key data in rapid transit serviced submarkets throughout Metro Vancouver including Burnaby, Richmond, New Westminster, Surrey and Vancouver (outside of Downtown). The preference for office space within 500 meters of a rapid transit station outlined is clearly evident in the vacancy and/or occupancy cost differentials of most submarkets. In Vancouver, the delivery of Marine Gateway and Renfrew Centre cause a dramatic increase in vacancy rate. In Burnaby, SOLO District, a large delivery to the RTI market, is set to deliver in 2016, and Metrotower III sells to the Metro Vancouver Regional District. Surrey remains a tale of two markets as transit-oriented vacancy is 9.4 percent lower than buildings further than 500 metres from the nearest station. In New Westminster, RTI vacancy holds steady at 22.9 percent as Anvil Centre remains vacant. Richmond continues to see high demand for office space and new developments are planned for the region. In Coquitlam, construction of office buildings on the new Evergreen Line has begun. 

During the past eighteen months, the overall Rapid Transit Office Index vacancy decreased to 11 percent. This decrease in the overall vacancy rate can be attributed to the continued absorption of the new supply that has been delivered over the past few years. A significant amount of tenant expansions and relocations have contributed to the 20 basis point decrease in vacancy over the past five quarters, despite the addition of multiple new buildings.

For many tenants, locating close to transit stations is a subjective requirement, with some placing more value on it than others. Due to the culmination of Vancouver's most recent development cycle, the new inventory in the market has created a more competitive environment in which we've seen rental rates soften for both the RTI and outside rapid transit index zones.

About JLL
JLL (NYSE: JLL) is a professional services and investment management firm offering specialized real estate services to clients seeking increased value by owning, occupying and investing in real estate. A Fortune 500 company with annual fee revenue of $5.2 billion and gross revenue of $6.0 billion, JLL has more than 280 corporate offices, operates in more than 80 countries and has a global workforce of more than 60,000. On behalf of its clients, the firm provides management and real estate outsourcing services for a property portfolio of 4.0 billion square feet, or 372 million square meters, and completed $138 billion in sales, acquisitions and finance transactions in 2015. Its investment management business, LaSalle Investment Management, has $58.3 billion of real estate assets under management. JLL is the brand name, and a registered trademark, of Jones Lang LaSalle Incorporated. For further information, visit