Vancouver Office Building
The number of Vancouver Office building transactions fluctuate greatly from year to year. Stand alone office buildings are multi-tenant properties that are classified in their quality with respect to the highest rental lease rates they can command. For prime office buildings, they are classified as Class A, follow by Class B and Class C buildings.
Over the past 3 years, the number of transactions for office buildings was between 2 to 3 dozen. The dollar value for a Vancouver office building generally ranged from the low $5.0 million to over $30.0 million for the large buildings. The mid-range price is in the $9.0 to $10.0 million.
Office Buildings Sale Activities
Vancouver accounts for about two-third of the office property transactions. Most of the purchases the past year or so were by private investors and these buildings were not considered prime Vancouver office properties at prime locations. Private purchases are seeking out assets in the city, and during the first half of 2015, the office buildings were located east of Granville Street.
The Broadway corridor remains a popular spot for investors looking out for office buildings to buy. Vancouver office building owners and/or landlords, mostly class B and C buildings are investing in improving their properties to help to maintain their rental rates and to retain tenants. The market for rental is more balanced and tenants turnover is not expected to become a problem to the owners.
The keen interest for investors buying multi-tenant commercial buildings is primarily motivated by the steady cash flow from rental incomes, and the future values of the underlying lands.
Asian Office Building Buyers
There is more Chinese buying interest for office buildings in recent years. The entry of Chinese companies into the office building market has heightened the level of competition for office buildings that do come available. The office building market in Vancouver experiences the flow of Mainland Chinese capital as revealed in recent office building transactions, the question is how much more capital is still to come. A weakened Canadian dollar and record low-interest rates are further exacerbating the situation. Both private foreign investors and local investors are keenly seeking assets to outbid each other in an effort to secure office buildings that are for sale on the market.
Hedging For The Future
Local developers are seeking out to invest in office buildings. The assets these developers acquire often serve as potential future redevelopment sites. The recent trend in the development of mixed-used buildings with retail spaces on the ground floor, and high-rise or low-rise residential condos are found to be popular with many home buyers and investors.
If you like to have more info on buying an office building in Vancouver or the surround areas, kindly contact James Wong at 604-721-4817
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