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A Look at the Suburban Office Market Suburban Historical Vacancy 2010-2015 YTD 25.0% 20.0% 19.1% 17.6% 16.3% 15.0% 14.4% 11.6% 10.0% 5.7% 5.0% 0.0% 2010 2011 2012 2013 2014 2015 YTD Burnaby Richmond New Westminster North Shore Surrey Langley 2
A Look at the Suburban Office Market Historical Absorption 2010- 2015 YTD 800,000 600,000 400,000 200,000 Square Feet - 2011 2012 2013 2014 2015 YTD (200,000) (400,000) (600,000) (800,000) (1,000,000) (1,200,000) Suburbs - 485,462 SF Total Absorption Downtown - 275,395 SF Total Absorption 3
Suburbs New Supply Under Construction SOLO District King George TPC at South Gateway 3 Civic Plaza CentreView Office Station Point Place 10341 City Parkway, 1308 Lonsdale Ave, 2025 Willingdon Ave, 9808-9900 King George Surrey North Vancouver 3231 152 nd St, Surrey 13479 108 th Ave, Surrey Burnaby Hwy, Surrey Developer: Developer: Developer: Developer: Developer: Developer: Avondale Onni Group of Appia Group PCI Bosa Properties Century Group Development Companies Estimated Estimated Estimated Estimated Estimated Estimated Completion Date: Completion Date: Q4 Completion Date: Completion Date: Completion Date: Completion Date: Q2 2016 2015 Q1 2017 Q2 2016 Q4 2016 Q4 2017 Approximate Size Approximate Size Approximate Size Approximate Size Approximate Size Approximate Size (SF): 230,000 (SF): 164,000 (SF): 116,000 (SF): 60,000 (SF): 50,000 (SF): 78,800 Approximate % Approximate % Approximate % Approximate % Approximate % Approximate % Preleased: 9% Preleased: 72% Preleased:0% Preleased: 0% Preleased: 60% Preleased: 0% Tenants: Tenants: Kwantlen N/A Coast Capital N/A N/A N/A Polytechnic Savings University 4
Suburbs New Supply Approved Discovery Place Phase GTC Professional City Centre 2 III Building 3555 Gilmore Way 10189 153 rd Street Market: Market: Market: Burnaby Surrey Surrey Developer: Developer: Developer: Kingswood Capital Landview Construction Lark Group Approximate Size (SF): Approximate Size (SF): Approximate Size (SF): 50,000 100,000 180,000 Status: Status: Status: Construction slated to being Waiting for prelease commitment Waiting for prelease commitment in upcoming months 5
Suburbs New Supply Proposed Approximate Size Market Project (SF) Broadway Tech Centre East Campus 975,000 - Phased Development of Five Buildings 4750 Kingsway (Metrotown) Two Office Towers Burnaby Gilmore Station Up to 1,000,000 Brentwood Town Centre One or Two Office Towers 4700 No. 3 Road Nine-Storey Building Richmond Ampri International Gateway Centre 100,000 Surrey 9677/9681 King George Blvd 177,500 New Westminster 1010 Braid Street 360,000 North Vancouver 801 Harbourside 210,000 Total Approximately 3.9 million square feet 6
A Look at the Suburban Office Market 7
A Look at the Suburban Office Market Large Block Availability -Suburbs (40,000 SF+) Market Building Available Area sq. ft. Lease Type Class Headlease Burnaby Metrotower III 299,295 Headlease A Burnaby 3777 Kingsway 199,511 Sublease A Burnaby Nokia Building 62,400 Headlease A Burnaby Glenlyon Business Park 61,833 Headlease A Burnaby Metrotower II 56,518 Headlease A Burnaby 3500 Gilmore Way 56,201 Headlease A New Westminster Anvil Centre 137,330 Headlease A Fraserwood Corporate Richmond Centre 77,000 Headlease B Surrey Central City 77,162 Headlease A Surrey 15117 101st Avenue 56,413 Headlease B Total Space 10 1,083,663 * 9 blocks between 20,000 - 40,000 square feet 8
Suburban Office Insights
Suburban Office Insights - Migration • ! Suburban leases are 75% larger than downtown leases o ! Average suburban lease is 9,600 square feet o ! Average downtown lease is 5,500 square feet • ! Virtually no migration to downtown from suburban areas • ! 94.3% of transaction activity affecting tenants in the suburbs is either relocation to a suburban location or renewal • ! Suburban tenants have a tendency to renew in place (39.0%) or to relocate to another suburban location (40.7%) 10
Suburban Office Insights - Transit • ! Tenants perceive that transit stations primarily offer amenities ! ! Not just transit • ! Many companies less concerned with proximity to mass transit ! ! Bus service is viewed as desirable, parking is essential • ! Be near employees’ homes • ! Suburban tenants have suburban clients, projects ! ! Few downtown contacts 11
Suburban Office Insights - Commuting • ! 33% of workers say they would work an extra three hours per week in exchange for a reasonable commute • ! 50% state commute time would be main deciding factor • ! Most Likely to Move Out of Core ! ! 30-39 Year Olds ! ! New Parents ! ! $70K to $100K Income ! ! College & University Educated (Bachelor’s) ! ! Generation Y in this phase now 12
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