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B.C. commercial real estate has survived worst of recession
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Bentall 5 building (bottom, with clouds on top) has been sold to a German investment company for $300 million in Vancouver, B.C. Photograph by: Bill Keay, Vancouver Sun
VANCOUVER — British Columbia’s commercial real estate markets started their downturn long before the current recession began and have likely passed through the worst of times, a new report from Central 1 Credit Union said Tuesday.
However, the recession, with its job losses and office closings, is continuing to push up vacancies and bring down office rents, which will lead to more contraction before things bounce back.
“The way it works, these market cycles in commercial real estate tend to lead and lag the real economy,” Central 1 economist Dave Hobden said in an interview.
Investors bought heavily into commercial properties starting in 2003 and 2004 in anticipation of the strong economic growth B.C. experienced in 2006 and 2007, the peak years for commercial property transactions (2006) and commercial property values (2007).
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