Commercial Real Estate: The Stack to go up on Melville

Oxford's project at 1133 Melville is called The Stack and will be the tallest office tower in downtown Vancouver.

Oxford Properties has started demolition on a site that will eventually be home to the tallest office tower in downtown Vancouver.

Eight years after buying 1133 Melville, Oxford, which is the real estate arm of the Ontario Municipal Employees Retirement System, has started work on The Stack and announced three of its initial tenants of the 36-storey building.

Ernst & Young, Blakes law firm and DLA Piper law firm have signed pre-leases to take up a total of 207,000 sq. ft. of the building that will rise to 161 metres and will add about 540,000 sq. ft. of class-AAA office space to the tight downtown market.

Demolition of the existing 35-year-old, 10-storey office building and parking garage at the site is underway and construction on the new tower is set to start in early 2019 with expected completion in the first quarter of 2022, said Chuck We, Oxford’s vice-president of office leasing.

James Cheng Architects and Adamson Associates Architects designed The Stack, which features a climbing, twisting box design.

The building is zoned within the City’s Policy for Higher Buildings (GPHB), which requires architectural and sustainable designs of a higher standard in exchange for extra height allowance.

“In that policy the city actually pre-designated a number of sites downtown to achieve taller heights provided they met a number of conditions,” he said.

“If you look at the downtown skyline, what you’ll see is obviously the Trump (International Hotel and Tower) and Shangri-La (Hotel), which sort of pierce the table top. Our building will fall just under those two,” We said.

Oxford Properties purchased the site in 2010. In July, 2015, the developers submitted a rezoning application for the site. It was presented to the Urban Design Panel on Oct. 21, 2015, but was not supported, according to city permitting documents.

The developers revised their proposal in response to the city’s advice over public realm improvements, reduction in the building’s size and passive elements to improve the tower’s energy sustainability strategy.

The Urban Design Panel reviewed and supported the revised proposal on May 31, 2017 ahead of the revised rezoning application.

“Both Vancouver and Toronto have shown some of the highest degrees of office space demand in North America and you see that in the vacancy rates,” We said. “The fundamentals that we see in the Vancouver market are incredibly strong.”

The building so far is pre-leased 40 per cent, said Norm Taylor executive vice-president with CBRE Vancouver, which represented Blakes and DLA Piper.

“The downtown core has an aging inventory, with 67 per cent of our office buildings constructed more than 35 years ago,” he said. “Businesses are craving forward-thinking healthy office buildings like The Stack.”

We declined to reveal the asking rental rates for the new building. “They’re case by case,” he said.

“We’re happy to be pushing 40-per-cent lease and the amount of momentum we have today, we’re hoping to be as close to 100 per cent as possible by completion,” he said.

We said demand in Vancouver’s downtown office supply continues to outpace new supply as the vacancy rate has dropped to 4.7 per cent.

But additional relief is coming. More than 4.3 million sq. ft. of downtown office space is expected to be delivered to the market by the end of 2022, representing a 19-per-cent increase to the current downtown office inventory.

The Stack is targeting LEED Platinum status and is one of only two high-rise towers in Canada to be part of the Canadian Green Building Council’s Net Zero Carbon Pilot program.

With the initial pre-leases in place, the top two boxes of The Stack are now almost full.

The remaining bottom two boxes feature higher-than-normal ceiling heights and larger floor plates, ranging from 15,000 to 22,000 sq. ft.

Ernst & Young will lease a total of 60,000 sq. ft. across floors 19 to 23; Blakes will occupy floors 31 to 36 for a total of 80,000 sq. ft.; and DLA Piper is leasing 67,000 sq. ft. of space on floors 24 to 28.

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