Burnaby, BC - Metro Vancouver today announced the acquisition of Metrotower
III, located in Burnaby’s Metrotown Centre from Ivanhoé Cambridge. Opened in
2014, the 29-storey LEED® Platinum certified office building will serve as the
regional government’s new Head Office. The transaction, with a purchase price of
Cdn $205 million, was approved by the Metro Vancouver Board.
“As part of our long-term strategic planning, we evaluated options to best
meet our future needs for necessary office facilities including potential
redevelopment scenarios and relocation,” says Greg Moore, Metro Vancouver Board
Chair. “Based on thorough due diligence, detailed forecasting and independent
third-party validation, the acquisition of Metrotower III was deemed by the
Board to be the most economically and environmentally responsible decision in
the best interests of our members and ratepayers.”
With a growing population and increasing demands on service delivery across
the organization and throughout the region, Metro Vancouver is planning for the
future based on sustainable practices with a commitment to maintain the
liveability of the region.
“Metrotower III will accommodate Metro Vancouver’s unique and essential
requirements while providing the flexibility needed to accommodate our
organization for many years to come,” says Carol Mason, CAO/Commissioner, Metro
Additional benefits include predictable revenues from current and future
tenants, lower operating and maintenance costs, and considerable positive
environmental attributes including energy and resource savings.
Metrotower III is centrally located in Metrotown and offers over 414,000
square feet (38,500 square meters) of ‘AAA’ Class office space. The property is
well serviced by transportation options, including Skytrain and public transit
that reduce traffic, energy consumption and air pollution.
Ivanhoé Cambridge will continue to own and operate Metrotowers I and II, as
well as Metropolis at Metrotown. Ivanhoé Cambridge will manage Metrotower III on
behalf of its new owner.
Metro Vancouver’s existing head office complex, consisting of two office
towers located at 4330 Kingsway and 5945 Kathleen Avenue in Burnaby, will be
disposed of at market value and the proceeds used to offset costs associated
with the acquisition of Metrotower III.
Metro Vancouver Backgrounder
Q&A - ACQUISITION OF METROTOWER III
How did Metro Vancouver learn about the opportunity to purchase Metrotower
Over the last year, Metro Vancouver has been updating all of its long term
plans for its infrastructure, which includes a detailed evaluation of the
options for the current Head Office at 4330 Kingsway and 5945 Kathleen.
Through this review, the opportunity arose to consider the purchase of
Metrotower III as a future Head Office location. A detailed review was
undertaken that examined financial implications over a 20 year period through to
2035 for remaining at the current location and compared these costs to
relocating to Metrotower III. The business case demonstrated that the purchase
of Metrotower III, along with the sale of the current office site, was the most
economically and environmentally responsible decision in the best interests of
Metro Vancouver members and ratepayers.
How did Metro Vancouver evaluate the Business Case?
In the business case, several options were evaluated to best meet Metro
Vancouver’s future needs including potential redevelopment and relocation
scenarios. Three scenarios were explored which included remaining at the current
location, relocating to a new location and custom building new head offices at
either the current location or elsewhere.
The business case included independent third-party evaluations and detailed
forecasting over a 20 year timeframe. It demonstrated that the overall cost to
remain at the existing location, with necessary improvements to the office
buildings to accommodate future growth over the next 20 years, are approximately
the same as purchasing and relocating to Metrotower III when all revenue and
cost factors are taken into account, including the disposition of Metro
Vancouver’s existing office buildings.
At the end of 20 years, Metrotower lll remains a functional and valuable
asset with a lifespan of approximately 75 years, while the existing buildings
will be close to the end of their usable life, at capacity and requiring
additional significant capital investment.
What are the plans for the current Head Office?
Metro Vancouver will be selling its existing head office complex consisting
of two adjacent office towers located at 4330 Kingsway and 5945 Kathleen Avenue
in Burnaby. The sale will be completed through an open and competitive process
to ensure fairness and best value for the region. The net sale proceeds from
divesting of the existing office buildings will be used to offset the
acquisition costs of approximately $205 million for Metrotower III. The combined
2016 Property Assessments for Metro Vancouver’s existing head office complex is
approx. $82.5 million. The buildings are 29 – 32 years old. Metro Vancouver has
been located in these buildings for the last 30 years.
What are the benefits of a LEED Platinum building?
Metrotower III exemplifies the pinnacle of green buildings with lower
operating and maintenance costs, while also providing lease revenues from
current and future tenants in addition to considerable environmental benefits
including energy and resource savings.
Sustainability features include storm water management systems that collect
water for reuse in landscaping and toilets, heat recovery, energy efficient
lighting, circulated filtered fresh outdoor air, non-toxic building materials,
optimized indoor temperature and more.
Situated 15 minutes by SkyTrain from downtown Vancouver or Surrey, cycling
facilities and pedestrian walkways are steps away from a 24 hour bus loop
encouraging alternative modes of transportation.
What are the projected energy and water consumption usage savings in
the new building?
The new building is projected to save about 40% or 4.25 million litres of
water per year through the use of rainwater collection. Early numbers suggest
the new building will require 26% less energy (electricity and natural gas) to
support the HVAC system.
What are the projected savings in annual operations & maintenance costs by
moving to a building that is brand new, compared to a 30 year old building?
The 2016 Operating budget for Metro Vancouver’s existing Head Office complex
is $5.6 Million. The 2016 Operating budget for the new building is $4.2 Million.
We anticipate that these levels of savings will continue for the next 20-plus
years. The $1 million per year in projected savings will be achieved through the
more efficient building operations, maintenance and management services.
What is the timeline for relocating to Metrotower III?
It is hoped that all staff will be moved in within 13 months of taking
possession. This date will be adjusted once we complete our design work.
What is the projected household impact?
There is no financial impact to the average household in 2016 as a result of
the purchase of Metrotower III. Costs that would otherwise be allocated to
improvements at the current Head Office will not be undertaken and will be
reallocated to Metrotower lll. The annual household impact is expected to be $5
- $6 per household per year from 2018 to 2031.
What is the projected cost in tenant improvements compared to staying
at the current building for the next 20 years?
The projected tenant improvements at the new location is currently budgeted
at $28 Million. This is slightly less than the planned upgrades to the office
space at the current location since the new building will not require demolition
or staff relocation prior to office upgrades.
How many floors will Metro Vancouver occupy and how many vacant
floors will be available to lease?
The business case projections estimate a requirement to occupy 13 floors and
lease the remaining 12 floors, of which 7 floors are currently occupied. This is
based on 200 sq. ft. per employee and includes three full floors dedicated for a
Boardroom, Library, Committee Room, Print Room, and Data Centre.