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

Get local stories you won't find anywhere else right to your inbox.
Sign up here

Just Posted

People watch burning funeral pyres of their relatives who died of COVID-19 in a ground that has been converted into a crematorium in New Delhi, India, Thursday, May 6, 2021. Infections in India hit another grim daily record that day as demand for medical oxygen jumped seven-fold and the government denied reports that it was slow in distributing life-saving supplies from abroad. (AP Photo/Ishant Chauhan)
Liam’s Lowdown: Tell us more how COVID-19 is impacting B.C.

Compared to other provinces, B.C. releases less data on COVID-19 infections and vaccinations

A health-care worker prepares a dose of the Pfizer-BioNTech COVID-19 vaccine at a COVID-19 vaccine clinic in Toronto on Thursday, January 7, 2021. THE CANADIAN PRESS/Nathan Denette
65 new cases of COVID-19 in Interior Health

Overall, B.C. is seeing a decrease in COVID-19 cases

The five graduating members of the Vernon-based Thompson Okanagan Lakers U18AAA girls hockey team – Jessica Engelbrecht (from left), Makenna Howe, Cheree Peters, Jayden Perpelitz, and Alexis Bishop – have all committed to collegiate hockey programs in Canada and the U.S. (Photo submitted)
Vernon-based hockey squad sends 5 to college ranks

Thompson Okanagan U18AAA Lakers players heading to Canadian and U.S. programs

Richard Green writes poetry under the nom de plume Rick the Poet Warrior. Homeless, Green sometimes spends his summers in Revelstoke but winters in Victoria, travelling to Ontario to visit his sister whenever he can. (Jocelyn Doll - Revelstoke Review)
Revelstoke nomad pens poetry, offers insight into homelessness

Rick the Poet Warrior’s books can be found online as well as at the Revelstoke library

(Pixabay photo)
NHL bracket challenge supporting Indigenous awards at Okanagan College

One or more Indigenous students experiencing financial barriers will be able to receive an award

Sisters Audrey Cunningham and Donna Erdman, join the Vernon Kalamalka Chorus singing in their cars, tuned into the radio, under the direction of Debbie Parmenter. (Jennifer Smith - Morning Star)
VIDEO: Okanagan choir steers around COVID with ‘carbershop’ twist

Singers find a unique way to practice during pandemic restrictions

The RCMP logo is seen outside Royal Canadian Mounted Police “E” Division Headquarters, in Surrey, B.C., on Friday April 13, 2018. Indigenous leaders are calling for an investigation into the conduct of Mounties on Vancouver Island after two police shootings of members of a small First Nations community in three months. THE CANADIAN PRESS/Darryl Dyck
Indigenous leaders call for clarity, investigation into RCMP after B.C. shooting

The RCMP declined to comment on the requests by Indigenous leaders

A property crime map for the month of March shows the hot spot for crimes is centered around the area where the Victory Church homeless shelter is located. (City Submitted)
B.C. Premier asked to intervene in Penticton homeless shelter dispute

Mayor sends letter urging premier to reconsider Eby’s use of paramountcy powers

Join Black Press Media and Do Some Good
Join Black Press Media and Do Some Good

Pay it Forward program supports local businesses in their community giving

Colleen Price, Vancouver Island University’s bachelor of science in nursing program chairperson, says she is impressed with how students have persevered through the COVID-19 pandemic. (Chris Bush/News Bulletin)
Next generation of B.C. nurses already showing resilience

University program head says learning had to be adjusted amidst pandemic

The Vernon Community Arts Centre is seeking member artist submissions for a summer exhibit called Enchanted: A World of Fantasy. Submissions are open until June 30, 2021. (VCAC photo)
Vernon artists’ fantasy worlds wanted for summer exhibit

Vernon Community Arts Centre is seeking submissions for Enchanted: A World of Fantasy

A woman is hoping that her dog Ginger ran away from the fire that erupted in her Osoyoos home Saturday night. The home caught fire twice in two days and is totally destroyed. (Contributed)
Dog missing after saving woman from huge house fire in Osoyoos

The woman escaped the burning home, but she hopes her dog Ginger ran away to safety

Logging is proposed for a portion of Mount Ida, with the industrial park to the right. The purple portions are the proposed cut blocks, the yellowy-green are city-owned properties and the red and black dotted lines are the proposed logging roads. (City of Salmon Arm image)
Salmon Arm council’s concerns eased over Mount Ida logging

Fire chief explains proposed cut complements wildfire risk reduction efforts

The temporary skatepark will be placed between the Capital News Centre (in the parking area) and H20, pictured here (Kelowna Skateboard Association/Contributed).
Kelowna skateboarders hope to get Lower Mission park

The Kelowna Skateboard Association is helping a group of kids get a skatepark for the summer

Most Read