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Vancouver’s skyline to rise amid an office-tower building boom

VANCOUVER — Special to The Globe and Mail
Published Monday, Mar. 28, 2016 9:27PM EDT
Last updated Monday, Mar. 28, 2016 9:29PM EDT

The $240-million Credit Suisse/SwissReal tower in the heart of downtown Vancouver will be completed in less than a year, but so far, only one tenant has signed up to move in.

The tenant has committed for a 10th of the 370,000 square feet – leaving a state of emptiness that is unusual for an office skyscraper in this city. Even so, a huge shift in business tenancy is expected as the region experiences something it has not seen before: an office-tower building boom much of which is speculative construction rather than for specific committed tenants.

“This is kind of uncharted territory for Vancouver,” said Mehdi Shokri, a principal with the capital markets team at Avison Young. “But I don’t see a big disaster occurring.”

The Credit Suisse tower is only the most visible and furthest along of a second wave of new office towers planned for Vancouver and some key suburbs. A first cluster of towers – some two million square feet – was built downtown in the past three years.

Another 11 office developments are proposed within blocks of Credit Suisse’s Exchange tower at Howe and West Pender streets, even while the office-vacancy rate in the region continues to inch up as a result of the first wave of building.

But commercial brokers say the city is not about to be populated by ghost towers.

Mr. Shokri and others say they expect many of the new towers to start signing tenant leases as they get closer to completion. That is partly because companies in Vancouver, which do want to be in new, energy-efficient buildings, tend to operate on short timelines.

As well, he said, prices in the new buildings will likely come down in the next two years due to competition.

The landlords who will likely suffer as a result of the current boom are owners of older buildings, Mr. Shokri said. As well, new developments in the suburbs, which have already experienced higher vacancy rates in recent years, may have trouble as they compete with each other.

In Vancouver, the co-developer of the Credit Suisse tower is optimistic his building will start to fill as the completion date gets closer.

Franz Gehriger, the CEO of SwissReal Group who bought the original historic stock-exchange building in 2002 before partnering with Credit Suisse to develop it, said the main group interested in leasing Vancouver office space these days is the technology sector. Those companies make their decisions just a year before they need to move in.

And, he said, all signs indicate non-Canadian companies are looking for space here.

“Vancouver is on the world map now. We get a lot of calls from California and Seattle of companies that are considering coming here,” Mr. Gehriger said.

Some brokers say the building has had trouble signing tenants because of its unusual design. It is being attached to the existing heritage building, with the new tower starting on a narrow base next to it and then widening out above the older building.

That complicated design did slow construction somewhat, but Mr. Gehriger said “most issues are resolved now.”

He also just switched leasing agents, from CBRE to JLL, at the beginning of the new year, which has prompted local speculation about what is happening with the building.

JLL vice-president Mark Chambers said his company plans to roll out some new strategies for marketing the building, including sophisticated analytical tools that show companies how much they benefit financially by being in energy-efficient buildings that are better designed for their employees.

The Credit Suisse tower will be LEED Platinum, the highest rating on the energy-efficiency scale used for many buildings in North America.

Mr. Chambers, who also marketed the extra space in the recently occupied Telus head office on Georgia Street, said people have been predicting disaster for the Vancouver office market for several years, saying the region would never be able to absorb all the new offices being produced.

But the gloomy predictions turned out to be inaccurate, as new technology companies, notably Amazon, Sony, and Microsoft, arrived to lease big chunks of space.

“I don’t think we’ve reached a limit,” Mr. Chambers said. “We’ve become a global city.”


Credit Suisse, Swiss Real hire new agent to ramp up leasing in Vancouver’s Exchange Building


The real estate investment arm of Credit Suisse and Canadian partner Swiss Real Group Canada have hired JLL Canada to take over leasing of their $240 million Exchange Building office tower project in downtown Vancouver, the companies said Thursday.

To date, the developers have unveiled only one major tenant for the building at the corner of Howe and Pender streets, the Montreal-headquartered National Bank, which, in 2015, pre-leased 45,000 square feet of space in the 31-floor, 372,000-square-foot project.

However, Swiss Real CEO Franz Gehriger said the developers are unconcerned that more tenants have not signed on yet because they are starting to get more calls.

“We’ve really had a lot of interest in the last few weeks and months,” Gehriger said.

Gehriger said the developers were pleased with the job their previous leasing agent, CBRE, did in bringing in an initial anchor tenant, but opted to make a change when the leasing contract expired at the end of 2015.

JLL’s Mark Chambers didn’t mention the names of any potential tenants but “a little bit of paperwork fly back and forth between a few groups.”

“I’m a bit superstitious, I don’t like to get excited about it until we’ve got a deal firm, but we’re feeling positive,” said Chambers, an executive vice-president with JLL.

Chambers said leasing activity in new projects typically ramps up 12 to 18 months ahead of completion, which is where the Exchange is now, with a schedule to be complete in the early summer of 2017.

The Exchange, which launched construction in 2014, is unique in that it incorporates the redevelopment of an existing heritage building, the 11-storey neo-Gothic Old Stock Exchange building at 475 Howe St., which will be incorporated into an office tower that will cantilever over top of its roof from the adjoining lot and rise to 31-storeys.

The developers are billing it as Vancouver’s first LEED Platinum heritage-conversion office building.

And while Thursday’s announcement coincided with the announcement of a major shakeup at Credit Suisse’s investment-banking arm, Gehriger said that news has no impact on the Exchange project.

The Wall Street Journal, on Wednesday, reported that Credit Suisse was cutting 2, o00 jobs from its investment-banking operations and has taken almost $1 billion US in writedowns in its operations.

However, it is Credit Suisse Real Estate Asset Management, which Gehriger described as being backed by pension funds, that owns an 80-per-cent stake in the Exchange project.






Thirty-one storey building billed as one of Canada’s most sustainable office towers

VANCOUVER — The developer behind The Exchange, one of several new office buildings emerging in the Vancouver skyline, has locked up a major banking tenant to anchor the 31-storey downtown project that is being billed as one of Canada’s most sustainable office towers.

Credit Suisse, together with SwissReal Group, is developing the $240-million tower at the corner of Howe and West Pender streets.

It announced a deal last week that will see National Bank take on 45,000 square feet of office and service space at The Exchange when its doors open in Spring 2017.

The Exchange is emerging as a conjoined redevelopment of the Old Stock Exchange tower — a neo-gothic heritage building that opened in 1929. It’s among seven office buildings under development in downtown Vancouver at the moment, a list that also includes the MNP Tower, Telus Garden, and the Pacific Centre development on Granville.

Altogether, about 1.85 million sq. ft. of new office space is set to come online in 2015, with about 1.4 million already pre-leased, according to a report by Avison Young earlier this month.

The Exchange represents one of Credit Suisse’s first major build projects outside of Switzerland.

Norm Taylor, CBRE’s managing director in B.C., said National Bank made a wise move to lock up the space, as new downtown offices in that size category remain hard to find, regardless of the projects now being built.

“Everyone sees the cranes (in the Vancouver skyline) and thinks we’ve completely over-built the marketplace,” said Taylor, whose commercial real estate firm is the listing agency for The Exchange. “For the larger tenants, there’s still not a lot of choice.”

CBRE recently conducted a survey to count office vacancies that measure 40,000 sq. ft. or larger, Taylor said. “There’s less than 10 (of those spaces) available in Vancouver and many already have offers going on them,” he said. “Anyone of size and scale is bumping into competitive demand in the market place.”

Much of the current office space inventory is in the 5,000- to 15,000-sq.-ft. range, he said. “If you’re a large tenant in Vancouver — and by large I would define that as anyone over 30,000 square feet, maybe 25,000 square feet — you’ve got limited options,” he said.

At 31 storeys, The Exchange will be Canada’s second-tallest office tower to achieve Leadership in Energy and Environmental Design [LEED] Platinum — the highest sustainability rating from the Canada Green Building Council.

Nadja Gehriger, a vice-president at SwissReal, said The Exchange is being built on spec without an anchor tenant, so the deal with National Bank is not only an important tenancy for the building, but also signals a vote of confidence for Vancouver from the country’s sixth-largest bank.

“I think the market here is still very strong,” she said. “I know other markets like Calgary have been hit, but I think that as far as we can see, and the people we’ve been speaking with on the banking side, things are still going very well and keep moving upward as the economy improves.”

She said The Exchange’s green design matched well with National Bank’s own sustainable commerce mandate. Every office at The Exchange will have fresh air and will be heated and cooled by radiant technology. The building will use LED lighting, and solar panels to heat water. The building is expected to shed 45 per cent of the energy costs and 60 per cent of the energy consumption associated with a conventional office building, Gehriger said.

“Large companies are more and more focused on their (energy) footprint, and if you look at a lot of the big companies’ annual reports, they put a lot of emphasis on that as well,” she said.

A sustainable, comfortable office space is no longer a novelty; it’s a must-have, Taylor echoed. “If you don’t have that, you’re not going into the game.”

Beyond LEED certification, which focuses mainly on building materials and structure, companies are now increasingly considering overall “wellness” in their office spaces, which comes down to healthy and sustainable operating practises, he said.

“Tenants these days are much more sophisticated,” he said. “They look at studies about how productive their employees are, how proud they are of their premises, how comfortable they are. This building was (designed) with this in mind.”









Credit Suisse Real Estate Asset Management has secured its first tenant for its 31-storey, $240 million downtown Vancouver office tower more than a year after breaking ground.

National Bank, one of Canada’s oldest banks, will be The Exchange tower’s anchor tenant, taking 45,000 square feet of the 369,000-square-foot LEED Platinum office building. That includes office space on three floors of the high-rise as well as ground-level and second-floor retail space.

Other tenant announcements are expected in the coming months.

“It is symbolic for The Exchange to secure an anchor tenant that is a financial institution, said SwissReal Group’s Franz Gehriger. SwissReal Group is Credit Suisse’s local development partner for The Exchange.

“Moreover, it is significant for The Exchange – a LEED Platinum building – to welcome a tenant that is globally ranked as one of the top 20 most sustainable banks.”

When Credit Suisse broke ground last year , Credit Suisse director Rainer Scherway said the company usually invests in developed and fully-leased buildings, and this was the first time it developed a project from the ground up in North America.

Partly occupying the space of Vancouver’s former stock exchange building, which was originally built in 1929, the project will be Canada’s first LEED Platinum heritage conversion.

It will also be the country’s second-tallest LEED Platinum office tower.



KENNETH CHAN, VANCITY BUZZ – February 11, 2015
The National Bank of Canada will be the anchor tenant of The Exchange building, a new 31-storey office tower under construction at Howe and West Pender streets in downtown Vancouver.

According to Business In Vancouver, the Montreal-based banking institution will occupy 45,000 square feet of the building’s 369,000 square feet.

This is part of National Bank’s recently implemented business strategy to expand its reach beyond Quebec and Ontario. As of last spring, the bank had 451 branches across the country, with 339 in Quebec, 74 in Ontario, 27 in New Brunswick and only nine branches west of Ontario.

While many Western Canadians may be unfamiliar with National Bank, it was founded in 1859 and is Canada’s sixth largest bank.

“National is looking at growing from being a super- regional bank to having much more of a national presence,” Kash Pashootan, a portfolio manager with First Avenue Advisory of Raymond James Ltd., told Bloomberg News in March 2014.

National Bank’s occupation at The Exchange will not be possible until 2017, when the building is scheduled for completion. Construction on the $240-million building began in January 2014.

The Exchange is designed by Swiss architect Harry Gugger and incorporates Vancouver’s 1929-built Old Stock Exchange building with the addition of office tower floors above the historic structure.

In addition to restoring the historic facade and old trading floor, project proponents are aiming to achieve a LEED Platinum certification with “seriously green” elements such as rooftop solar panels, integrated geo-exchange thermal regulators, storm water retention and reuse, and hydronic heating and cooling systems.

The office tower project is funded by Credit Suisse, one of the largest private real estate investors in the world.


GREEN OFFICES & COST SAVINGS by the Integral Group

December 3, 2014

1. Introduction: Green buildings add value 

The state-of-the-art Exchange office tower is among the greenest office buildings in North America. Green offices are in increasingly high demand as companies recognize the business benefits of superior working conditions, and employees demand better quality offices. Health and comfort have become a priority in the modern work environment. Employees are happier in a bright and healthy work environment, and research shows that, as a result, they are more productive, take fewer sick days and are apt to stay longer with an organization. The following is a summary of the specific features of the Exchange office tower that contribute to a high quality work environment, and how those characteristics translate to better value and significant savings to the tenant.

Click here to read the full story: Integral Productivity Study


LEED Platinum tower first with triple-paned curtain wall


The 31-storey Exchange tower: first LEED Platinum office high rise in Vancouver sports triple-pane curtain walls.
The Exchange office tower arising in downtown Vancouver marks not only the first LEED (Leadership in Energy and Environmental Design) Platinum office high-rise in British Columbia but also the first Canadian skyscraper encased in a triple-glazed curtain wall.

Developed by global financial giant Credit Suisse of Switzerland, all 400,000-square foot of the building will be sheathed in an aluminum-framed three-pane glazing custom fabricated by Gamma, an international curtain wall supplier with an office in Delta.

The $200 million tower at the corner of Howe and Pender is targeted to achieve LEED Platinum with features such as on-site waste water treatment, energy consumption at a rate about half that of similar towers and a high-efficiency heating, cooling and ventilation system.

But it is the innovative curtain wall that will set a new standard in Vancouver.

Read more:


Green construction means ‘good business’ for new downtown Vancouver office tower.


Environmental certification signals a healthier, more energy-efficient building.
Rooftop solar energy panels will heat the water at The Exchange, the new office tower going up at Howe and Pender. Storm water will be retained and reused. Heat will come from deep in the earth. Every office will have fresh air and will be heated and cooled by advanced radiant technology.

The expected results: a 35-per-cent reduction in energy costs, a 50-per-cent reduction in energy consumption, higher employee satisfaction, and an 85-per-cent decrease in greenhouse gas emissions compared with conventional buildings.

“We are long-term investors and we believe that everybody has to go this way. We can no longer waste energy and water as we have done in the past,” says Franz Gehriger, the CEO of SwissReal Group, which is developing the building along with Credit Suisse.

“In Europe, this is normal,” Gehriger says. “They are ahead of us because their energy consciousness is better than ours. But we will get there.”

Read more:


New building in downtown Vancouver will help to ease office vacancy concerns

January 23, 2014

Credit Suisse, one of the top 10 real estate investors in the world, have announced they will build a $200 million 31-storey office tower on the old stock exchange building site in the 400-block of Howe Street.

“As one of the top 10 real estate investors in the world, Credit Suisse is proud to make its first investment in British Columbia,” Director of Credit Suisse Real Estate Rainer Scherwey said today.

That building will be LEED platinum certified. LEED is a rating system that categorizes green buildings.

There are also six other office buildings under construction in the city, but even these spaces will not satisfy the demand for office space in Vancouver.

The city’s vacancy rate is currently at 5.5 per cent. Compare that to Midtown Manhattan, which is about 8 per cent and San Francisco, which is the tightest commercial market in the U.S., at 7.6 per cent.

Downtown Vancouver is now near the bottom of the vacancy rate of any major city in North America.

“The demand for new buildings is rising very quickly,” Mark Renzoni, CBRE Canada President and CEO, said. “Tenants are looking for new sustainable environments for their work space.”

Vancouver Mayor Gregor Robertson hopes these new buildings will help end the vacancy concerns.

The seven new towers that are still under construction will provide more than 2 million square feet of new office space.

See complete article at