tech vancouver cent says downtown office per

techsuch May 9, 2021 0 Comments

Vancouver’s emerging tech sector poised for accelerated growthShopify is taking over four floors of Vancouver’s Bentall Centre.HandoutVancouver has attracted the attention of several major tech firms that want totap into a growing technology sector, including small- to mid-size companies,property managers, investors and other spinoff services and businesses.A few companies, such as Microsoft Corp. and Sony Pictures Imageworks Inc.,are already settled in. By the end of the year, Shopify will have taken overfour floors at the city’s Bentall Centre, which will draw about 1,000 workersto the downtown core.And once Seattle-based Inc. moves into its proposed 1.1 millionsquare feet of leased downtown office space, it will become the city’s largestcorporate tenant, attracting thousands more employees.Story continues below advertisementThe pressure is on Vancouver’s commercial real estate sector to prepare forthe growth, particularly in the downtown area, where tech industries typicallygravitate.According to CBRE Group Inc., Vancouver’s downtown office space is expected tohit a record low vacancy rate of 1.7 per cent this year, down from 2.3 percent in the fourth quarter of 2019.A number of factors have made the city ripe for a major influx of jobs in thenext few years, including American immigration policy that has closed doors totalented workers who would otherwise have gone stateside.As well, educational institutions in British Columbia and Washington arechurning out talent that is highly skilled in digital technology. Governmentfunding and support programs in B.C. have also fostered a thriving industry.Randall Lucas, an investor with Seattle-based venture capital firm VoyagerCapital, had been checking out Vancouver since 2007, but it wasn’t until 2016that he saw opportunities.“In 2016 we decided the time was right to bet on Vancouver; now we hold [it]up alongside Portland and Seattle as one of the three main areas that we focuson,” Mr. Lucas says. “[The city] has come miles in those years since we werelooking at it in 2007.“This is a place that we are interested in sticking with for the long haul andmaking it a first-class part of our investing practice. It’s one of the threepillars of the Pacific Northwest.”Story continues below advertisementAnother cost advantage driving the Vancouver tech sector is that the jobs aregenerally lower paying compared with American jobs. The average salary for atech worker in Vancouver is $83,200, according to the BC Tech Association. InSeattle, a tech worker quite new to the field typically makes aboutUS$130,000.But those incomes will grow as the big companies continue to move intoVancouver with many positions to fill, thereby creating a highly competitiveenvironment, Mr. Lucas says.“You can expect an uptick in the salaries of developers in Vancouver as theselarge employers come in,” he explains.The key to any tech industry is the ecosystem that develops. The presence ofmajor companies helps build the overall ecosystem because then the startupscan attract talent who will have other employment as a fallback, Mr. Lucasadds.For example, employees may be more inclined to move to Vancouver to join astartup because even if it fails, they can find work with another one, or fora big company.“It’s important for them to be able to rub shoulders and be in proximity toother startup people,” Mr. Lucas says.Story continues below advertisementWhile about 80 per cent of the startups he visits in Vancouver are located inor around the downtown core, he says that tech office clusters also need toform outside the pricey and slick office tower areas.A case in point is the ecosystem that has formed out of older, low-scalebuildings in Mount Pleasant, a former heavy industrial area on the east sideof the city.Andy Yan, director of the City Program at Simon Fraser University, says about41 per cent of Metro Vancouver’s jobs in information and cultural industries(including tech) are concentrated in the city of Vancouver.Around 10 per cent of workers are in urban areas of Burnaby and another 10 percent in Surrey, he adds.“High-tech companies have rediscovered the city as opposed to isolated officeparks,” Mr. Yan says. “They want proximity and connectivity. It goes back tothe concept of ‘agglomeration externalities,’ which is body heat.“The idea is that when you put people together, particularly people with ideasand networks, they [will] innovate to build new products. They furthereconomic development and, hopefully, create new companies.”Story continues below advertisementWeWork operates this co-working space at 333 Seymour.HandoutU.S. company Hudson Pacific Properties purchased the four-building downtownBentall Centre last year with an eye to growth throughout the region. TheBentall site also allows for a fifth tower, which made it a particularlyattractive asset. Chuck We, Hudson Pacific’s senior vice-president for WesternCanada, says the company has been repositioning Bentall, in large part to tapinto the tech sector.“We have hit a tipping point and have a lot of gravity now with the kinds ofjobs that this talent is looking for,” Mr. We says.He says Hudson Pacific can play a key role in helping other tech companies andbusinesses recruit and retain talent in a competitive job market by offering amore exciting work experience. The complex is already home to several techcompanies, and last fall rideshare company Lyft moved its 20 employees intothe Bentall Centre.Hudson Pacific is updating public areas, looking into locally sourced food inthe food courts and offering outdoor events in the summer.The new strategy has already paid off: The Shopify deal was a result of itsrepositioning effort. Mr. We says he has been getting calls from techcompanies in West Coast U.S. cities that now see Vancouver as an alternativemarket.Co-working company WeWork aims to provide central office space for startupsthat would otherwise be priced out of the market. Although the market istight, the company will have 10 spaces open in the region by end of the year.Story continues below advertisementStephen Tapp, vice-president for WeWork Canada, says the company has beenstrategic as it moves into Metro Vancouver. “We have essentially been fullsince we started because that demand is there.”

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