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episode # 119

The Vancouver Housing Market, Hotel Industry & Commercial Real Estate Boom with Evan Duggan

The residential real estate boom has corresponded with a transformation of the hotel industry and explosive growth in commercial real estate values. But are these seemingly separate markets connected?  Vancouver journalist Evan Duggan sits down with Adam & Matt to talk about his experiences working the real estate beat. His insights point to broader global trends in which Vancouver is inextricably linked.

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Episode Summary


About Evan:

Evan is a freelance journalist, based in Vancouver, who covers commercial real estate for the Vancouver Sun, along with the Real Estate News Exchange, an online publication. Evan also covers various topics for Business in Vancouver. In addition, he is the Vancouver correspondent, doing TV correspondence and wire service reporting, for Xinhua (China’s national news service).

Evan did not have a particular interest in real estate, but was working as a news sub-editor for the Bangkok Post. After a year or so, he came back to Vancouver and an editor from the Sun mentioned a permanent freelance gig, which he took on and has been doing for over five years.

On how the hotel and commercial real estate markets have performed over the past 4-5 years:

Hotels are a small part of commercial real estate. Every story about property is one of supply and demand—almost every asset class on the commercial side has been about robust and diverse demand and the market struggling to provide enough of the right kind of supply.

For instance, offices are at the end of a supply boom from 2014-2016 which added 2.5 million square feet. Now, the vacancy rate is at an all-time low of 4.8%, the lowest in North America. We won’t see more supply until 2021-2024. Industrial has an even lower vacancy rate. We have skyrocketing land values and are running out of developable land along the Fraser River. There is lots of activity from logistics firms, light manufacturing, and port-related businesses. Stakeholders are frustrated with the lack of properties to lease and buy (without hundreds of millions of dollars).

Retail is more complicated: retail space is evolving with many people shopping online, more and more. There is robust growth in urban shopping centres and high-end boutiques (like those on Alberni and Robson Streets). Dollarama and stores like it are doing well. Department stores and fast-fashion (especially Canadian brands) are disappearing. High streets, like shops on Main and Cambie, are disappearing due to high property tax and lease rates, and “renovictions” are chasing away mom-and-pop stores and restaurants in the places people want to spend time.

On parallels between residential and commercial real estate doing so well on the extreme high and low ends, but not so much in the middle – which seems to be missing:

Residential is more complicated in terms of speculation, supply and demand, and politics. Challenges and issues in commercial include the struggle of trying to keep the property market in balance. It’s already out of whack, meaning [there is not] enough yield-generating commercial real estate that’s sustainable with enough middle-ground (to shop, eat, etc.) and stay afloat for over a year. The other link is where will everyone taking these new jobs, like the 3,000 that Amazon says it will create, afford to live and stay? Tech workers here earn a lot less than their peers do in places like Seattle and Boston.

On the driving economic forces for the boom in commercial real estate:

There is a ton of wealth here. BC and particularly Metro Vancouver are becoming diversified. There is a lot of job growth in logistics, port-related activity like shipping, and tech. Ten or more years ago, about 30% of the downtown office market was taken up by resource and mining companies; now, this proportion consists of tech companies. There is more creative use of industrial space for digital effects and film-related companies. Craft beer is another big industry in Vancouver (especially in the Mt. Pleasant and Hastings areas)—this business model didn’t even exist ten years ago. Also, people are always going to want to be here. They will find ways to adapt, and to invest and buy; they will create businesses just to stay here.

On his article, Metro Vancouver’s booming hotel industry won’t slow down any time soon, and how Vancouver has transformed to another level in the past 5-7 years: hotel prices for downtown this weekend, for two nights, was cheapest at the Riviera on Robson at $698. The Ramada was priced at $714. Occupancy from last year, according to commercial real estate and investment firm, CBRE, was 79% which is incredibly high, and they think it will climb to 80%. This is basically at capacity when you take the low seasons into account. Massive daily room rates and revenue per available room are other factors. Rooms are full and they’re turning a huge profit. This is because of the low Canadian dollar keeping Canadians here and bringing Americans in. The cruise ship industry also brings people here, and Vancouver’s brand as an international tourist destination is strong.

Airbnb and stratas cracking down on it has not been a threat or taken business from hotels. There must not be enough space to keep up with demand. There are about 820 new rooms (of mostly premium brands) opening by the end of 2019, but we have also recently lost 357 rooms and the Four Seasons downtown will close in January 2020.

On if a larger process is happening, such as with things like the Olympics, that enables the hotel industry to mirror the rise in residential real estate:

The Olympics has come up as having helped Vancouver become an international brand, but it’s hard to measure this. The motivation to develop a new hotel in downtown Vancouver isn’t there—it costs a lot. High density sites downtown are condos and mixed-use projects; developers can make more money selling these, rather than hotels.

On some of the biggest challenges Vancouver is facing:

Keeping the property market in balance: having enough space to accommodate growth and for people to live affordably. This goes back to the Amazon example mentioned earlier. Also, the general land shortage; we need solutions for this. One thing that often comes up is to take land out of the ALR (Agricultural Land Reserve) to accommodate more industrial development. We need to get more creative; we need more density and more efficiency. Many of the residential challenges are also being faced on the commercial side.

On some of the most exciting moves to respond or capitalize on with these dramatic commercial changes:

Strata offices came up at the Vancouver Real Estate Forum last week. The Bosa tower near the waterfront downtown is our largest-scale office strata project. They’re getting astronomical rates. People wonder how this will work long-term and if there’s enough appreciation for these owner-users to make money. It might work better in smaller neighbourhoods like Mt. Pleasant, with smaller-scale projects. It’s hard to say what the most exciting moves are—if Evan knew, he’d likely be a commercial real estate investor, not a reporter!


  1. Favorite neighbourhood in Vancouver: Main Street and Commercial Drive/Hastings for craft breweries (Powell Street is a favorite)
  2. Favorite bar or restaurant: Alibi Room
  3. West-side mansion or downtown penthouse: West-side mansion, to have a yard
  4. First place he takes out-of-town guests: Alibi Room or the breweries
  5. Best thing he bought in the past year for under $500: Running shoes

To find out more about Evan:

Check out the Vancouver Sun’s commercial real estate section every other Wednesday, and

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