Rising office rents put the squeeze on non-profits
Rates in downtown Vancouver up 12.9% compared to last year, according to CBRE
The cost of renting office space in downtown Vancouver has gone up nearly 13 per cent compared with last year, and increased more than 31 per cent in the past two years, according to a new report from real estate brokerage firm CBRE.
While that steep increase will put pressure on any business that wants to operate in the downtown core, it's especially challenging for non-profit organizations, which, because they rely on donors and sponsors, face constant pressure to keep overheads down.
But non-profits need to be based in the heart of the business district because that's where the jobs are, says Amy Robichaud, executive director of Dress For Success Vancouver, an organization that helps women find good jobs by providing professional clothing.
"Because part of our mandate is helping women feel comfortable and empowered and included in the economy and in professional business, being located here is part of that belonging," she said.
However, the area is also home to the steepest increase in rents.
When Robichaud gets together with her counterparts at other non-profits, rent is a common theme.
"I would say it ranks, if not at the top for all of us, very near the top. In this city in particular, it's one of the top issues because it is such a big part of our overhead," she said.
Dress For Success is operating with an in-kind donation of nearly 3,000 square feet of office space from RBC in its building at Granville Street and West Hastings Street.
Robichaud said that saves the group about $70,000 each year, but it's not enough space to serve the growing number of women who have come to rely on Dress For Success — about 2,000 each year.
The non-profit is renting an extra administrative space in a nearby tower, which costs just over $17,000 per year for little more than 700 square feet.
"I would say we pay a competitive, but a pretty expensive rate to be in a pretty small, not particularly desirable space," said Robichaud.
Vancouver still far from top of global list
Downtown Vancouver experienced the seventh greatest increase in office rents in the world this year, according to Norm Taylor, CBRE's executive managing director in B.C. But the city ranks just 66th in the world in terms of overall cost.
"When you look at [Vancouver] on a global scale, or international scale — [compared] to cities like New York, San Francisco, London, Tokyo — we're still very affordable," said Taylor.
Combined with an exchange rate that makes costs like employees' salaries cheaper, that makes the city pretty attractive for global companies, he said.
However, with a limited supply of office space, that appeal could just mean more competition and pricier rents for non-profits like Dress For Success.
"They'll find this very challenging, very tough, because it's hard to raise money and just see it going into increased rental," he said.
Robichaud said budgeting for a year-over-year increase in rent is one of those things that keeps non-profit executive directors up at night, all while she's trying to "get creative" to figure out a way to expand the operation to serve more women trying to break the cycle of poverty.
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