Discover the Next Chapter of the Vancouver Office Market | RENX
Ask the Expert: Colin Scarlett
1. Why is Vancouver a great place for office occupiers?
The talent pool in Vancouver is one of the main draws for organizations in the region.
High-caliber talent choose Vancouver for the lifestyle it offers, from convenient access to nature and outdoor activities, to its waterfront, diverse culture, gourmet cuisine and vibrant social life. . These factors allow people to find the right work-life balance and various financially rewarding jobs.
For employers, office space represents only 4-8% of their overhead costs, while labor can represent up to 90%, especially for some technology companies. Global and US tech organizations are happy to pay what we perceive to be premium rents for office space to gain access to affordable top talent. This dynamic will not change any time soon. Canada’s political landscape, progressive society, health care system and friendly immigration policy offer significant advantages to organizations looking for a stable destination to grow or start their business.
2. What major developments have you seen in this market over the past 5 years?
Geographically, Vancouver is a well-positioned alternative for the technology sector. The most recognized technology companies have invested in Vancouver for its shared time zone with their headquarters in San Francisco, Los Angeles or Seattle; its accessible and convenient transportation hub; and its renowned talent pool, resulting in increased and sustained interest in the city. A good example of this is companies like Microsoft, Apple, Amazon, Fortinet and Animal Logic that are expanding in Vancouver significantly.
Vancouver has also been a favorite of the entertainment industry, with the visual effects and gaming sectors benefiting from tax incentives and currency exchange. Thus, local businesses that support the industry have grown.
Professional services organizations such as law and accounting firms have grown to guide clients through the intricacies of cross-border and trans-Pacific transactions, as well as to manage the significant mergers and acquisitions activity that Vancouver generates. These companies continue to invest in Vancouver to manage the seemingly endless workload.
3. What are the key elements to remember to understand your clients’ future vision of their organization?
It is important for the company to drive real estate rather than the other way around. I work with my clients’ management teams to understand their long-term vision and create a real estate strategy based on their business objectives. I use a proprietary, data-driven methodology to fully understand my clients’ businesses. I provide them with unique insights into their operations and industry to help them make informed decisions that positively impact culture, recruitment, retention and productivity. Good data leads to good decisions.
4. Historically, professional services firms have used office space to recognize and reward employees. Does this still play a dominant factor in companies’ plans to size their space based on their talent pool, or has the culture around space and recognition shifted?
A third of law firms in London, England have open space with no offices; Australia has also taken a similar approach. In North America, the market experimented with this trend and generally considered it a failure. The future of professional services firms remains individual desktops with modifications to incorporate greater usability and cross-team collaboration.
Equity, diversity and inclusion (EDI) has rightly become a priority when designing spaces. Careful consideration of accessibility, not just physical, but at different levels of the organization, helps drive recruitment, ensure retention, and cultivate a positive culture. The days of large corner desks for executives are over; an equal workplace is the future. For more information, read my full EDI report here.
5. What trends have you seen in terms of rental conditions and space before and after the pandemic? Are there any unique post-pandemic trends for subletting based on the hybrid work model?
The elements of the hybrid working model are here to stay. The pandemic was proof of concept with a two-year experimentation period. However, as we return to the office, many organizations are taking a variety of approaches. It is not a one-size-fits-all solution, but rather a tailor-made solution for each organization and even each regional office. Many organizations choose to bring all employees back to the office at least three days a week, every day, which requires a workstation for each person. This means minimal or no reduction in their space.
We are seeing very large leases executed post-pandemic, by large, thoughtful organizations aligning their long-term business goals with the physical spaces needed for their people to excel. In these cases, we don’t just see square footage for the space, but best-in-class offices with high-quality amenities that create a positive, innovative, and collaborative culture.
Throughout the pandemic, feelings of isolation and its impact on mental health have been a major concern for businesses. Organizations understand the benefits of employee mental health and are doing their part by providing both the tools and the space to foster it. Bringing people together in vibrant community spaces is just one of the strategies they are implementing to restore connection and a sense of unity among their staff.
6. Does the concentration of professional services firms continue to reside in the major market financial centers or have there been other trends towards hub-and-spoke models?
Business continues to be centralized downtown for easy access to customers and banks. It also allows a dedicated transit hub.
Vancouver benefits from a strong public transit network serving its surrounding area, which contributes to the work-life balance valued by the city’s talent pool. Efficient and accessible public transit allows employees to choose a neighborhood that matches their lifestyle outside of the office.
7. How long have you been serving office occupants and what unique expertise do you bring to your clients?
I have specialized in finding real estate solutions to business challenges for over 25 years, focusing on technology and professional services companies, and working with some of the largest companies in Metro Vancouver. Over the past 10 years, I’ve traveled to 21 cities around the world to research the future of office space and see first-hand global best practices. I have completed transactions for 20 new developments in Metro Vancouver. For me, it’s exciting to have helped build Vancouver’s skyline as the city continues its trajectory of growth and success.