Good news for those in the market for office space: Burnaby is definitely a tenant’s market right now and headed even further in that direction.

The office vacancy rate for the city was 7.5 per cent as of July, a “pretty big jump” from 5.4 per cent in July 2008, said Josh Sookero, an associate with Avison Young commercial real estate.

That increase in unleased space is largely due to two new office buildings that are sitting virtually empty. Available space at Lake City Centre at Production Way is about 90,000 square feet, almost the whole building, Sookero said. It was completed last fall, right when the economic downturn hit.

Similarly, at Glenlyon Business Park in the Big Bend, leasing was going so well with the addition of tenants such as Ritchie Bros. Auctioneers that another 40,000-square-foot building was built on speculation. That was also completed when leasing conditions took a turn for the worse.

But that’s just the start.

“We’re expecting the vacancy rate to go up significantly over the next six months,” Sookero said.

Willingdon Park, on Still Creek Avenue near Highway 1, has new two buildings set to be ready in early 2010, adding a total of 185,000 square feet to the Burnaby market. Appia Developments is opening a new office building this fall at Rosser Avenue and Lougheed Highway that will add another 110,000 square feet.

Meanwhile, the loss of eBay, which is consolidating its North American customer service operations in Salt Lake City, will put yet another 127,000 square feet of vacant space into the Burnaby market.

In the long term, Metrotower III, the third and final addition to the successful office towers at Metrotown, will add 400,000 square feet of space when its scheduled opening happens in summer 2011.

The majority of the available space is in the premium, Class A category, said Sookero, who added it’s hoped the jump in vacancies will be a temporary one. “Burnaby will always be positioned very well because of the amenities and SkyTrain.”

The last couple of years the office market in Burnaby has been “pretty tight,” with vacancy rates in the four to six per cent range, he said. That made it more of a landlord’s market but with supply increasing, there’s much more opportunity for tenants to negotiate lower rents or move to a newer building.

Over in New Westminster which, with Richmond, generally has the highest office vacancy rates in Metro Vancouver, the situation is improving on the landlord end of things.

New Westminster’s fortunes tend to go hand in hand with Burnaby’s, Sookero said.

“It’s almost like a little sister that gets dragged along with what’s happening in Burnaby, because if things really tighten up in Burnaby, then New Westminster is usually a cheaper option.”

So far this year, New Westminster is one of the only markets in the region that had “positive absorption,” meaning more space was leased out than vacated.

In recent years, the Royal City’s office vacancy rate has been in the 12 to 14 per cent range. But it was at 11.2 per cent as of last month, compared to 12.1 per cent in July 2008.

That was helped greatly in the past six months by the leasing out of about 50,000 square feet of office space built on the second floor of the former Zellers store at Royal City Centre, which had sat empty for a very long time since being converted to office space in 2008, he said.

Westminster Centre South, which was built in the former site of New Westminster Cinemas, is a “great new cornerstone for Uptown New Westminster” and added 42,000 square feet to the market last fall. Of that, 34,000 was taken up by the B.C. Safety Authority, while the rest, “prime space, top floor with brilliant views” is still available.

Sookero said with no new space being built, no big changes are expected in the New Westminster market in the next year or so.

It appears companies are just now coming out of a period in which they put off signing long-term leases to buy time so they could see the impact of the ailing economy. In the past two months, the leasing business has started to pick up, he said.

“There’s not a lot of deals yet, but there’s activity now ... There’s a few more smiles nowadays.”

wchow@burnabynewsleader.com