SkyTrain – increasing rents, but at what cost?
The following item is nothing more than a ‘hard sell’ for the Evergreen Line and for the proposed Broadway subway. Granted that office space near one of Vancouver’s three metro lines have lower vacancy rates and higher rents, but what has not been taken into account is that offices next to the present metro lines are much newer than their neighbours. Also new office buildings are being built on newly rezoned land and thus being new, and being new, command higher prices.
As for the lower vacancy rate, new office space tends to be filled more quickly as it is modern and contains up to date wiring, essential for theAi??modern electronicAi??business office.
What is missing in this study is comparing the age of the offices next to a metro line with offices elsewhere, which I think, would tell its own story.
As Vancouver population rises in the downtown core, due to massive condominium construction, the population has to travel out of the downtown core toAi??go toAi??work and with many families living in the downtown having no car or are one car families, using public transit is a necessity. Here we have a transit dichotomy:
The region is building hugely expensive metro/subway lines out from the city, which residents can commute to workAi??to new offices located near metro stations, in the suburbs;Ai??while residents living in the suburbs areAi??being taxed more to pay for expensive metro lines in Vancouver andAi??are more or less abandoned transit wise, with only skeleton bus services andAi??mostly to the closest metro station and in the end must rely on the car for personal transport.
So here is TransLink’s transit plans, build expensive metro/subway lines in Vancouver/Burnaby, to subsidies property developers in erecting new highrise office towers charging premium rents, paid for by suburban residents payingAi??ever higher gas taxes, property taxesAi??and bridge tolls. And I thought building ‘rail’Ai??transit was to affordable move people, silly me.
Suburban Vancouver office market driven by rapid transit: report
Jones Lang LaSalle notes that offices near SkyTrain and Canada Line have lower vacancies, higher rents
In Richmond, the commercial vacancy rate near the Canada Line is well below half that in the rest of the municipality.
Photograph by: Ric Ernst, Vancouver Sun
METRO VANCOUVER – Proximity to rapid transit is increasingly a key factor in where new offices locate in the suburbs and Vancouverai??i??s outlying areas, according to a report by commercial real estate services firm Jones Lang LaSalle.
ai???The closer, the better,ai??? the companyai??i??s executive vice-president Ray Ahrens said in an interview after Mondayai??i??s release of the Rapid Transit Office Index. ai???The office buildings close to SkyTrain stations are enjoying much lower vacancies. While [it makes sense that] they [are] better occupied, we didnai??i??t know the extent of this until we did the study.ai???
Ahrens said that transit is becoming increasingly popular in Metro Vancouver and ai???our [report] shows clear evidence that office developments located within walking distance of rapid transit have a significant advantage with less vacancy and higher rents.ai??? More people are now commuting from downtown Vancouver to the suburbs for work, he noted.
According to the report, which addressed both suburban municipalities and the city of Vancouverai??i??s outlying area, the direct vacancy rate for buildings within 0.5 kilometres of a rapid transit station is 4.8 per cent compared to 12.3 per cent for the rest of the market, while the average asking rents are approximately eight per cent higher.
The report noted that with a vacancy rate about one-third of areas not served by rapid transit, developers are increasingly looking to build more transit-oriented suburban office complexes.
ai???As downtown and Broadway corridor availability decreases and rents increase, our landlord and tenant clients are becoming more interested in transit-oriented suburban locations,ai??? added Ahrens.
The report cited new office developments taking advantage of the trend, including in New Westminster, where three buildings are scheduled to be ready for occupancy in 2013.
The buildings, which include the new TransLink headquarters, will more than double the areaai??i??s existing ai???Aai??i?? class inventory and be adjacent to the New Westminster and Sapperton SkyTrain stations.
ai???We expect to see continued interest in these [suburban] developments, particularly from employers with back-office operations that do not need to be located downtown,ai??? Ahrens said.
The report noted that a preference for rapid-transit-oriented office space is more muted in the downtown core and Broadway corridor.
ai???Although these markets are serviced by rapid transit, they also benefit from their central location and convenient access to other modes of public transportation such as frequent bus service and the SeaBus. Rapid-transit access, therefore, is not deemed to be a determining factor for tenants in these two regions.ai???
The report cited several benefits of having rapid transit near an office in the suburbs, including the ability for employees to save money on travel costs, and the ability to live in a more affordable suburban neighbourhood.
The report looked at several suburban municipalities, including Surrey, Burnaby, New Westminster and Richmond.
It concluded that the importance of having office space close to SkyTrain appears to be most pronounced in Surrey, where the vacancy rate for office space without rapid transit is 25 per cent, ai???yet buildings near the SkyTrain are a hot commodity, with a direct vacancy rate of just 0.4 per cent.ai???
The index noted that Central City, with 572,778 square feet of office space, is fully occupied.
ai???Gross occupancy costs for buildings with access to the SkyTrain are 33.3 per cent higher than the rest of the Surrey market,ai??? the report added. ai???The combination of high occupancy costs and limited vacancy in buildings with rapid-transit access allows these landlords to negotiate aggressively by seeking high net rental rates and offering modest inducement packages.ai???
For New Westminster, the report said, the direct vacancy rate of buildings along SkyTrain is less than half the rate of the rest of the cityai??i??s office space.
However, the index noted that in Burnaby, there is a much lower discrepancy between vacancy rates of office buildings with SkyTrain access and those located more than half a kilometre away, although vacancies are still lower for buildings near SkyTrain.
In Richmond, the report said, the vacancy rate near Canada Line is well below half the rate of the rest of the municipality.
bmorton@vancouversun.com
Perhaps the new offices being constructed by the three metro lines are due to the metro lines being there…? It would be prudent to take that into consideration.
Exactly, the goal of our regional transit planning is redevelopment and rezoning land to greater density to to move people. By building expensive metro on three transit lines, we have literally cannibalized the rest of the transit system to achieve this.
Metro by itself doesn’t cause land to be rezoned for development, politicians on city council’s do.
Here is the problem, if i don’t live near a metro line, I will have to drive to the new office. Look at the traffic in greater Vancouver, gridlock everywhere because we have spent well over %8 billion on three metro lines that haven’t done anything to reduce gridlock, but instead promote high rise construction including expensive new offices.
There are so many variables with this story not considered that I begin to wonder if the reporter did any research at all but was told to write a “puff” story on rapid transit.
With the Canada Line in Richmond, where are all the new office’s along the line? There isn’t much except at the terminus station which has been greatly redeveloped in the past two decades. The other stations along the line have not. This poses the question, has new office (and how much of it) space been built because of the Canada Line, or part of the redevelopment of central Richmond, which the Canada Line came later?
well…ultimately only time will tell. However, given the Expo line is decades old….and the offices around metrotown and surrey aren’t the newest either (eg….lots of very new suburban office parks), i think the study’s conclusion is correct. Furthermore, if that’s what the developers and the businesses renting the office say (that they are building/renting because it is close to a skytrain station)…..then who am I or you to argue with them?
So, we build multi billion dollar subways to subsidies developers to rezone and increase density in the region and not to move people? I guess that is why the Vancouver region has endemic gridlock.
What I see is developers drooling at the prospect of a Vancouver subway under Broadway, where they can assemble land, have it rezoned for much higher densities, throwing existing merchants into economic chaos. My Friends who live on Cambie St. say that since the Canada line opened, the ambiance of the street has yet to return.
I was an independent merchant in the 80’s to early 2000 in Vancouver and newly built stores drove the independent merchants out of business with the higher rents. Also, many businesses with offices in the downtown core are leaving Vancouver altogether and relocating up the valley to Abbotsford or Chilliwack, where taxes are cheaper. We may tax the Vancouver region to death, to build expensive metros on routes that cannot be justified like the Evergreen Line, while at the same time forcing scores of major businesses to relocate elsewhere, study or no study.
Your love for the light rail is laughable. I just hope you’re not serious questioning the efficiency of the skytrain/canada line? A light rail mixing with cars and pedestrians? oh yeeee way too efficient!
Trouble is Daniel, you haven’t a clue what you are talking about.
The Canada line is not SkyTrain, nor is it compatible in operation, but leaving that aside, modern LRT (which is a streetcar/tram) operates on a reserved rights-of-ways, free of cars and pedestrians. Guess what, no builds with SkyTrain and no one in North America has copied our elevated EMU’s on the Canada line.
As for efficiency, SkyTrain/Canada line metro’s are less efficient in operation than LRT. time to get your facts straight!
LRT takes up land space… which takes away from car space and this pisses car users off. Even with “reserved rights-of-way” LRT must operates slower than if it were underground or in the air. That’s a fact.
Built underground, more expensive, but faster, and doesn’t piss off car users. Built in the air, takes away car space but faster.
Why would you push for LRT on Broadway.
And the person who said after the Canada Line was built “Broadway lost its ambience”. Yeah, let’s just take the opinion of one person and generalize every single person’s opinion who lives or works near or around Broadway. Good one.
What a terrible story. Poorly researched and lots of generalizations.
“Trouble is Daniel, you haven’t a clue what you are talking about.”
Really? You’re going to tell people they’re uneducated because their opinion differs from yours?
The facts are on the table. There’s no point having any further discussion when it clearly shows that rapid transit is less efficient, yet you say “time to get your facts straight!”.
In addition, “no builds with SkyTrain and no one in North America has copied our elevated EMU’s on the Canada line” is incorrect. Furthermore, how is that a valid point? No one copying us must mean the system sucks? what?
Your facts are merely opinions based on a lack of research. LRT operating at-grade/on-street tends to be slower than elevated or underground metros is because LRT has many more stops per route/km than a subway or “El”. More stops = more passengers.
Light rail on Broadway would reduce auto traffic, thus easing congestion and pollution, it would also give merchants an edge as people traveling by tram actually see businesses and knowing that there is a stop close at hand, can get off the tram to shop with ease. Businesses along new LRT lines tend to see turnover increase by 10%. This never happens with subways or El’s.
Cambie Street has lost its ambiance as merchants struggle to stay in business as the 1000’s of extra customers that were supposed to come via the subway never materialized.
It forever amazes me, that those who support metro construction haven’t a clue about the financial cost of metro construction and the assumptions they make about SkyTrain are simply breathtaking.
SkyTrain sales are important because the system was sold to us as the system for the future. Being a proprietary light-metro (LRT has made light-metro obsolete), we are tied to one supplier, Bombardier Inc. and the concept that transit must be elevated.
Well that was the 1970’s and only seven SkyTrain type systems have been built, under four different names (ICTS,ALRT,ALM,ART) of which only two are used seriously for urban transit. As for the Canada Line, it is merely a grade separated heavy rail EMU, which very few people are building these days due to costs.
Vancouver has a very expensive light-metro building philosophy and one can only close so many schools and hospitals in order to build them. There is only one taxpayer.
 A light rail mixing with cars and pedestrians?
 LRT takes up land space… which takes away from car space and this pisses car users off. Even with “reserved rights-of-way†LRT must operates slower than if it were underground or in the air. That’s a fact.
 Built underground, more expensive, but faster, and doesn’t piss off car users. Built in the air, takes away car space but faster.
Listen children, do everyone a favour, learn to do with out the car in a city before it totally takes you over & rules you.
Both Daniel & Bro, you couldn’t be more wrong
If you don’t like my opinion of you – improve yourself!