The recent bankruptcy of WeWork is causing significant discussions among Vancouver’s office market stakeholders. WeWork, an international co-working giant, filed for Chapter 11 bankruptcy in the U.S. and entered into a restructuring agreement to reduce debt and reevaluate leases. This has led to the planned closure of four Canadian spaces in Toronto, Vancouver, and Burnaby, along with other locations in the U.S.
At the Vancouver Strategy & Leasing Conference, experts discussed the potential impacts on Vancouver’s office market, which is already facing higher vacancy rates and demand challenges due to remote work trends and economic uncertainty. Luke Moran from Peterson Real Estate predicts that the fallout from WeWork’s situation could manifest in three ways: giving back some office spaces, renegotiating certain locations, or having other companies step in to take over. Jeff Rank from QuadReal Property Group anticipates increased vacancy in the Vancouver market as a result.
The panellists noted that the market had undergone significant changes since 2019, with more movement among tenants and changes in office usage due to the pandemic. Current office vacancy in Vancouver is around 8.6%, with a mix of sublease and head-lease options available, offering tenants more opportunities to find suitable spaces.
The full impact of changing office usage patterns and the WeWork bankruptcy on the future of office space in Vancouver remains uncertain. Stakeholders are observing varying trends, from companies reducing their office footprints to others expanding or returning their workforce to the office. The timing for the next major office project in Vancouver is also a subject of debate among insiders, with predictions ranging from the next two to five years to possibly into the 2030s.
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