Enduring Short-Term Discomfort for Long-Term Benefits: Vancouver's Broadway Corridor Tenants Remain Committed Amidst Broadway Subway Construction Congestion

Despite ongoing construction and the nationwide economic conditions affecting all markets, the Broadway Subway expansion in Vancouver has not dampened demand for office and retail space in the Broadway Corridor area. The much-anticipated 5.7-kilometre expansion of the rapid transit Millennium Line from VCC-Clark Station to Arbutus and Broadway, with a potential future phase extending to the University of British Columbia, is expected to bring significant amounts of new housing, rental and condo, podium and street-level office and retail spaces, as well as improved access for metropolitan region residents to rapid transit.

Market performance in the Broadway Corridor has been noticeably positive for both retail and office leasing, driven by the success of redevelopment projects in the Mt. Pleasant area. Despite increased congestion and higher rental premiums, firms are recognizing the benefits of the infrastructure project and are committed to the area. Office leasing activity ramped up in mid-2021 and reached a seven-year peak in mid-2022 in terms of leased, renewed, or sublet square feet, with creative, tech, and health sciences tenants contributing to the growth, particularly in the Mt. Pleasant market. The Broadway Corridor's tight retail conditions, with only 2% vacancy, have not deterred retail leases, with between 20,000 and 35,000 square feet of space leased quarterly in 2022, culminating in more than 100,000 square feet leased, on par with 2019 and 2021.

The area's added purchasing power has attracted retail tenants, with households within a five-kilometre radius of the Broadway and Granville intersection typically housing medium to high-income earners, with a third of households exceeding the $150,000 mark, and just over 10% in the $80,000 to $100,000 range. The area is forecast to see population growth of at least 14% over the next 10 years and up to 40% over the next 30 years, with new residential builds expected to increase the area's affluence.

Rapid transit expansion in Vancouver has had a mixed history, with the cut-and-cover construction process of the Cambie Street line resulting in a significant loss of foot traffic and parking for stores in the retail landscape. This time, the Broadway Subway will utilize tunnel boring machines, which will significantly limit but not eliminate the disruptions caused by construction in the area.

While Vancouver has been listed as one of the worst Canadian cities for traffic and fourth-worst in North America, the launch of the Broadway Subway in 2026 is expected to ease access to the growing number of businesses along and surrounding the Broadway strip, making it easier for local residents to reach these businesses. The firms in the area are counting on the dramatic uptick in local residents to boost business despite the ongoing traffic issues.