More than $258 million was invested in commercial real estate on the North Shore in 2017, with 90 transactions.
The investment beat the previous record for the market in value terms, 2013’s $249 million, but was short of that year’s transaction record of 93.
Avison Young’s Spring 2018 North Shore, BC Commercial Real Estate Market Report, released Friday, shows that the disposition of retail assets continued its domination of the market in 2017, as it did in 2016.
More than $156 million (46 deals) in retail sales were registered in 2017 following more than $111 million (47 deals) in retail sales in 2016. This marked the first time on the North Shore that a commercial asset class exceeded $100 million in sales in consecutive years.
“The significant volume of residential development transpiring across the North Shore during the past four years, particularly in more transit-friendly nodes such as Lower and Central Lonsdale as well as along Esplanade and segments of Marine Drive, have contributed to increased demand for retail and service amenities along with additional hospitality options in these neighbourhoods,” said Avison Young Principal Terry Thies. “Commercial development has been further encouraged by local, provincial and federal governments investing in infrastructure.”
Lease rates increase amid tight vacancy rates
Lease rates for industrial space on the North Shore remain among the highest in Metro Vancouver in part due to North Vancouver having one of the tightest vacancy rates in the region.
Lease options for office tenants are more plentiful than strata office opportunities on the North Shore as leasing activity (and vacancy) has generally remained stable even as new supply has been delivered.
Office lease rates have also remained largely steady and comparable with rates in suburbs such as Burnaby and Surrey.
“Retail space in Lower Lonsdale has been in demand by North Shore retailers, with rental rates ranging from low $30s to mid $40s psf net. Leasing activity for retail spaces larger than 1,500 sf in Central Lonsdale slowed in 2017, with rates stabilizing in the mid $30s to low $40s psf net. Premium locations can range up to $50 psf net.,” said Matt Thomas, a Principal in Avison Young’s Vancouver office who specializes in North Shore commercial real estate sales and leasing.
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