Ozzie Jurock on Global TV
We told you so on the Michael Campbell show ... Buy your own strata office.
We told you last year to buy at $200 and $250 a foot… When a 1,000 sq.ft office would cost you around $220,000. Monthly payment $1,300.
The effect on strata office values has been dramatic. An example is the Conference Plaza on West Pender Street.
- In 2000 when it opened, office space sold for an average of $142 per square foot.
- By 2004, as the office vacancy rate downtown ballooned to 13%, the average price per square foot in the building had dropped to $136.
- By 2005, the average price had shot up to $288 psf. and last year it hit $466.
- It is now projected to be $510 per square foot by the end this year, according to Barclay Street Real Estate, which provided the information.
Now, new strata offices are appearing, such as Concert Properties Harbourside in North Vancouver, and the British-backed Jameson House in downtown Vancouver, where office space is being listed at $800 and $750 per square foot, respectively.
The market shift to a seller’s market is due to a lack of office space in downtown Vancouver, which has seen the vacancy rate fall to a record low of around 2%, even in Class B buildings, and soaring lease rates for the remaining space.
For investors who bought in a few years ago, there is a further payoff. Due to the current tight office market, some units are renting for $30-$35 per square foot, or two to three times what they were just two years ago.
Another example is the Electra tower on Burrard Street (Where JREI has its offices). There the price per square foot of office space has risen from an average of $231 per square foot in 2002 and $256 in 2006 to $360 last year.
One subject sale for 6 units clocked in at $510 per sq. foot a month ago.
Major Point: Our position is, that no matter the market you should own your own home and whenever possible your own place of business. You would be hard pressed to find any business in the Lower Mainland in the last 15 years that would not have been better off owning their premises than renting them. Some have made more money in their commercial/industrial space than the made in their business.
Owning an office, rather than renting, makes good sense for even a small owner-occupier because you control your monthly costs and slowly build up equity. For investors, a downtown strata office in all major cities in Canada with prevailing very low office vacancy rates may also make sense (given the above caveat).
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