Manulife bets new office tower will find tenants
Office vacancy rates in that area are at a 10-year high
The 100-pound dumbbells in the fitness centre might be a bit over the top, but the brass behind Manulife Real Estate’s new Vancouver office tower believe they have the right mix of state-of-the art amenities to attract tenants amid record-high vacancy rates in the downtown office market.
The 16-storey, 250,000-square-foot tower at the corner of Howe and Nelson Streets had its grand opening reception Nov. 18. The designers and owners aim to achieve LEED Gold certification, with the building featuring rainwater harvesting, triple-paned windows for energy efficiency, and electric vehicle charging stations.
Manulife Real Estate, the global real estate arm of Toronto-based Manulife, built the tower with CEI Architecture and Endall Elliot Associates. With several properties totalling more than 3 million square-feet in Greater Vancouver under its ownership, Manulife’s aim is to expand its stable of West Coast assets.
“We want to have more of a presence in Vancouver, we want to have more investment in the west,” said Ted Willcocks, global head of asset management, real estate, for Manulife, while taking The Sun on a tour of the building. “We felt the time was right to develop. We saw the tenant demand. We had the land.”
He said they saw erecting a new tower as more economical than buying space.
“When we surveyed the investment market you’re paying $600 and $700 a (square) foot for 40-year-old A-class space, versus being able to build new space on land that we already owned,” he said. “It made economic sense and allows us to essentially meet our investment returns and our goals.”
The new space at 980 Howe joins roughly 1.5 million square feet of new office space downtown over the last yearand-a-half, with the vacancy rate around 10 per cent — a 10-year high.
Steve Smith, Manulife Real Estate’s managing director for Western Canada, said they have so far leased about twothirds of the space at the new building.
“As much as there are always cars on the road, there is always someone who wants a new car,” he said. “We meet the market for the proverbial new car … This is newgeneration space.”
Willcocks said filling up the rest would be an “incremental” challenge.
“We have 60 million square feet (of building space) around the world,” he said. “We have 3.5 million feet in the Greater Vancouver area and so having another 50,000 to 70,000 (square feet) to lease is not a daunting task for us.”
Key office tenants at the new building include BGC Engineering, ACL services and Jarvis McGee Rice Trial Lawyers.
Willcocks said Vancouver’s tenants tend to have high expectations for their work spaces. To meet those needs, the building features a rooftop terrace, a fully equipped fitness centre, end-of-trip facilities, a state-of-the art conference area, and clear glass elevator cars that lead to a parking garage with automatic light sensors for extra safety.
The City also has strict requirements for new builds, Willcocks said.
“The light harvesting, the triple-pane glass, some of the rainwater harvesting — Vancouver and its forward-thinking culture demands these kind of necessities in buildings, more so than other cities around North America,” he said. “It’s leading edge.”
Bart Corbett, senior vice-president of office leasing at Cushman & Wakefield in Vancouver, has been in and out of 980 Howe many times showing the space to potential tenants.
“Generally, my tenant clients are reasonably impressed with the building and mainly because of the lobby,” he said. “Manulife didn’t spare too much expense with the lobby. And they have great amenities — the rooftop deck being one of them.”
Most of the space on the higher floors with views is already taken. The challenge leasing agents face trying to fill the rest will be selling the location, he said.
“It’s not a traditional downtown core location so they have to work a bit to build up the proximity to Yaletown and the sense that they’re fairly close to the Canada Line.”