Langley’s 200th Street Corridor Office Market Update 2020

Langley’s 200^th Street Corridor: The business hub of the Fraser Valley

Langley’s 200^th Street Corridor will see the current development and price trends continue over the coming years with over 1 million square feet of office space either under construction in the area or in the design/planning phase. As the area becomes built-out, we predict Langley’s 200th Street Corridor will rival Surrey City Centre as the business hub of the Fraser Valley, especially considering its superior accessibility to Highway 1, Lougheed Highway, and the connecting routes to communities across the Lower Mainland.

Lifestyle shifts, many put into high gear by the COVID-19 pandemic, have caused a continuous stream of people to move to the Fraser Valley in search of more space, in their homes and communities. Over the summer months, typically a quieter time in the residential market, the Fraser Valley Real Estate Board recorded record-breaking sales volume and if September’s home sales statistics are any indication, the Fall residential market will be a busy one. With more residents comes a higher demand for services and amenities, not to mention a growing workforce of people. Langley’s 200^th Street will become a targeted area for new satellite offices for downtown brands.

2020 OFFICE MARKET RECAP

Despite the global pandemic and some economic uncertainty, Langley’s 200^th Street Corridor’s office market continues to boom with prices and lease rates on the rise. Market activity did slow in mid-March but the second half of Q3 saw many people returning to the office and picking up their pencils again. The full economic and social fallout of the pandemic may yet to be seen but, so far, the 200^th Street Corridor continues to see strong interest as well as sales and lease statistics.

Strata Office Sales: 11 Transactions

As predicted in last year’s report, the only new strata development to come to market in the last year (West 200) has been selling quickly and achieving new record high pricing for shell office space in the area. West 200 accounted for 10 of the 11 strata office sales in the area and sales have been reported as high as $700 per square foot. $700 per square foot is more than a 50% increase from late 2018 when the last new strata office project, Spire Professional Centre, sold out with prices in the $400-450 per square foot range, which was record-breaking at that time.

The 1 resale strata office that has transacted this year is located in the Spire Professional Centre. That transaction also achieved $700 per square foot, which marked a new record price per square foot for resale strata office units in the area.

Office Lease Rates: $25-35 Average Price Per Square Foot

Lease rates have continued to increase with the launch of new lease projects, which always fetch higher rates than older offices. Lease rates for AAA class office space, like the new construction that is located on the northern end of the corridor near the interchange, are fetching lease rates between $31 and $40 per square foot. On the other hand, A-class office space that may be older and further from the interchange is securing lease rates in the $23 to $29 per square foot range. While this range is comparable to the lease rates we saw last year, the top end of the scale has continued to edge upwards every few months.

Commercial Land Sales: 0 Transactions

So far in 2020, the area hasn’t seen any commercial land sales. This is due to a lack of supply as most parcels designated for commercial development have been secured by developers. That being said, we have run development proformas and based on the strata sale prices and lease rates we are seeing new projects achieve, land could trade for approximately $6.5 million per acre, depending on land use designation. That would be a huge increase from the last land transactions we saw back in 2018 which were ranging from $1.85 to $2.44 million per acre.

CURRENT & FUTURE OFFICE DEVELOPMENT

Langley’s 200^th Street Corridor continues to experience a development boom in 2020 with TheXchange and Latimer Village breaking ground as well as the First West building completing construction. Along the corridor, there is currently over 1 million square feet of office space under construction or in the design/planning phase.

The below map highlights all of these developments. It is colour coded to showcase the different timelines to development of each site. We have also indicated what type of development and, for office development, whether it will be available for lease or sale (if known).

OFFICE DEVELOPMENT HIGHLIGHTS

Carvolth Business Park
200 Street & 86 – 88 Avenue

• Two eleven storey buildings with 415,479 sf of office plus 264 room hotel with conference centre
• Office space is 10% pre-leased
• Built by Mitchell Group
• In preliminary planning phase

TheXchange
199 Street & 80A Avenue

• 90,000 sf of commercial space across
• 2 buildings (three to four storey)
• 40% pre-leased
• Built by Infinity Properties
• Listed with Fraser Vallery Commercial Real Estate
• Currently under construction
• Estimated project completion: Q2 2021

Latimer Business Hub at Latimer Village
200 Street & 84 Avenue

• 108,000 sf of commercial space across 2 seven storey buildings
• Built by Vesta Properties
• Estimated project completion: Q1 2022
• See below for more information

West 200
19923 80A Avenue

• 46,525 sf four storey office strata building
• 85% sold out
• Currently under construction
• Listed with Colliers International
• Estimated project completion: Q3 2021

PROJECT SPOTLIGHT: LATIMER VILLAGE AT LATIMER HEIGHTS

Latimer Village is the anchor of Latimer Heights, Vesta Properties’ impressive 74-acre master-planned community. This community will transform the 200th Street Corridor and help cement it as a regional commercial centre and the northern gateway to Langley.

Latimer Village will include:

• 4 mixed-use buildings
• European-esque high street
  • 35,000+ sf of pedestrian-oriented retail space
  • Boutique tenant mix of restaurants, shops and services
  • 499 new homes
• Two 7 storey office buildings (Latimer Business Hub)
  • 108,000 sf of office space
  • Underground parking

Phase 1 of Latimer Village is currently under construction with an estimated completion date of late 2021. Phase 1 includes the two southern mixed-used buildings, closest to the pond, as well as two condo buildings located directly to the east.

Phase 2 will include the two northern mixed-use buildings and the two office buildings. Excavation for the underground parking beneath phase 2 is underway with an estimated completion of Summer 2022.

The Latimer Heights community, as a whole, will bring the following to the area:

• Nearly 2,000 new homes including single family homes, rowhomes, townhomes, and condos
• New elementary school and community park
• Neighbourhood walking network including a luscious pond area

Visit latimerheights.com to learn more about Latimer Heights by Vesta Properties.

QUESTIONS?

If you have any questions regarding commercial real estate or development in Langley’s 200^th Street Corridor please don’t hesitate to contact us.

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Sources: Township of Langley, Commercial Edge, Vesta Properties, Infinity Properties.