More Metro businesses take to subleasing to trim costs.
Amount of office space available increases rapidly.
Derrick Penner
Vancouver Sun
Wednesday, November 26, 2008.
More Metro Vancouver businesses are suddenly looking to sublet some of their office space as a way of cutting costs in tough economic times, recent reports from prominent commercial realtors indicate.
Resort company Intrawest is putting two of the floors that it holds in Waterfront Centre at 200 Burrard Street up for sublease. And companies ranging from Rocket Gaming and Intrynsic Software to Weyerhaeuser Canada Inc. and Lundin Mining are giving up some of their offices for others to use on a short-term basis.
Shawna Rogowski, director of research at Colliers International, said in an interview that many tenants are taking a cautious view given the uncertain state of the economy. She said these are companies that perhaps held extra office space with a view to expanding, but are now looking at consolidating and cutting costs, or even downsizing.
"Companies are really pinching every penny that they can," she said. On Tuesday, Rogowski put out an interim report acknowledging the rapid increase in the number of companies putting space up to rent.
Available sublease space rose to nearly 600,000 square feet, with some 150,000 square feet of put on the market in October alone, and another 135,000 square feet added in the first half of November, Rogowski said.
In its last quarterly report, Colliers counted 139,291 square feet of vacant sublease space across Metro Vancouver, with 63,442 square feet of that in downtown Vancouver. By the end of October, that had grown to 578,213 square feet of sublease space across Metro, with 274,396 downtown.
That is a mere blip in Metro Vancouver's 52-million-square-foot office market (by Colliers's count), but it is a telling trend, said Nicholas Westlake, senior analyst with CB Richard Ellis Ltd."The thing that's significant is the number and rate at which they're coming up," Westlake said.
The firms that are rationalizing their space, are "better positioning themselves for the long haul," he said.
On the upside, Westlake said the new circumstances open up some breathing room for tenants wanting to locate downtown. Subleased spaces will also carry the rents of their primary tenants, which will be lower than current rents, helping to moderate recent spikes in downtown rents.
However, demand for that new sublease space "is a tough measure to calculate," said Norm Taylor, an associate vice-president at Colliers.Taylor said many companies are touring the new space, but are wary of making deals in the current climate, especially if they have to appeal to a board of directors or the sentiments of shareholders.
"If they need to hire a moving truck that wasn't budgeted for in this year's capital, they're just not going ahead with it," Taylor said.
Financial/Equity Markets Impact October Home Sales.
Vancouver, BC – November 14, 2008.
British Columbia Real Estate Association (BCREA) reports residential sales dollar volume on the Multiple Listing Service® (MLS®) in BC declined 54 per cent to $1.69 billion in October, compared to October 2007. Residential unit sales were down 51 per cent to 4,018 units during the same period. The average MLS® residential price in the province was $420,259, down 6.5 per cent from October 2007.
“Housing demand was negatively affected by the global financial crisis and a sharp downturn in the equity markets,” said Cameron Muir, BCREA Chief Economist. “These events exacerbated an already low level of consumer confidence, keeping many potential homebuyers on the sidelines.”
Residential sales in October were the lowest since December 2000, on a seasonally adjusted basis. “Home sales are unlikely to fall much further,” added Muir. “While the provincial economy has weakened, the fundamentals support a higher level of home sales than experienced last month.” Year-to-date MLS® residential sales dollar volume in the province declined 27 per cent to $29.2 billion compared to the same period last year.
Provincial MLS® sales declined 30 per cent to 63,760 units, while the average residential price increased 5 per cent to $458,078 over the same period.
I am pleased to annouce the sale of 4321 Greta Street , Burnaby.
Residential housing price decline creates buying opportunities.
VANCOUVER, B.C.
November 3, 2008
Housing price reductions across Greater Vancouver over the last six months have eliminated price gains witnessed in the first quarter of 2008. The Real Estate Board of Greater Vancouver (REBGV) reports that residential benchmark prices, as calculated by the MLSLink Housing Price Index®, declined 8.8 per cent between May and October 2008, resulting in a 3.9 per cent year-to-date price reduction for detached, attached and apartment properties in Greater Vancouver between Octobers 2007 and 2008.
In May 2008, the overall residential benchmark price was $568,411, compared to $518,668 in October 2008.
“Home sales are not keeping pace with the positive economic conditions in BC,” said REBGV president, Dave Watt. “That’s a direct result of a loss of consumer confidence in the overall market. Accordingly, today’s housing market is characterized by moderating home prices and wide selection. It’s definitely a buyer’s market.”
Residential property sales in Greater Vancouver declined 55 per cent in October 2008 to 1,364 from the 3,028 sales recorded in October 2007.
Active listings totalled 19,257 in October 2008, a three per cent decline from the 19,852 active listings reported in September 2008. New listings for detached, attached and apartment properties increased one per cent to 4,867 in October 2008 compared to October 2007, when 4,819 new units were listed.
Sales of detached properties in October 2008 declined 56.5 per cent to 493 from the 1,133 sales recorded during the same period in 2007. The benchmark price for detached properties declined 4.7 per cent from October 2007 to $695,962. Since May 2008, the benchmark price for a detached property in Greater Vancouver has declined 9.8 per cent.
Sales of apartment properties in October 2008 declined 52.7 per cent to 647, compared to 1,368 sales in October 2007. The benchmark price of an apartment property declined 3.5 per cent from October 2007 to $358,359. Since May 2008, the benchmark price for an apartment property in Greater Vancouver has declined eight per cent.
Attached property sales in October 2008 are down 57.5 per cent to 224, compared with the 527 sales in October 2007. The benchmark price of an attached unit declined 1.4 per cent in Greater Vancouver between October 2007 and 2008 to $448,152. Since May 2008, the benchmark price for an attached property in Greater Vancouver has declined 6.4 per cent.
More Metro businesses take to subleasing to trim costs.
