Commercial Success is Important to our Local Urban Living

Downtown Vancouver is much more kin to Downtown Portland than say Downtown Beaverton. Vancouver as a city is much larger than any other city in the local region not named Portland. Vancouver’s Downtown has a strong mix of commercial office, retail, residential, and industrial real estate. That may seem an odd comparison considering Portland as an overall city is more than twice the size of Vancouver. Part of the local success of Vancouver’s emerging urban center is due to that complete package with a healthy mix of business real estate opportunities. Larger cities like Portland and Seattle have long offered retail, office, and residential in high density neighborhoods with excellent walk-bike lifestyle opportunities. But these two examples are much more dense than Vancouver and with that increased density comes some of the negatives of city living among these are: noise, heavy traffic both vehicle and pedestrian, and sometimes increased crime. Vancouver has significantly less of the city negatives with almost all of the city positives.

Many people choose to live in an urban downtown setting to enjoy a lifestyle that is largely independent of auto travel. Walking or biking to restaurants, pubs, shops, and in many cases work is a perk to urban living. Suburbia rarely if ever offers that convenience. To be fair, there are a whole set of different advantages to the suburban life for those that would trade one for the other.

ZoomInfo HQ under construction at Terminal One will have more than 360,000 SF of office, parking, and retail. Expected open in Q1 2025.

Vancouver has been on a noticeable boom the last 25 years with a momentary pause during the Great Recession 2009-2012. Right now the city has a lot of room to grow before it starts experiencing some of the ‘big city’ woes that have long plagued cities like Portland and Seattle. The beauty of Vancouver though, is that we will always play second fiddle in the regional picture to Portland and so they will continue to shoulder the burden of the big city woes whereas Vancouver just quietly grows into a great city with better traffic, lower crime, superior taxes, and an excellent alternative to Portland. Portland is experiencing shrinkage in their city center and their office vacancy rate was tickling the 30% mark for a bit. Meanwhile Downtown Vancouver sits at 5.8% office vacancy which is one of the highest performing office markets in the USA among larger cities.

You might ask, why does that matter to me I’m just living here. Well, it matters much more than you might think. There is a certain amount of people living or working inside of a one mile radius needed to support a restaurant, bar, retail shop or other commercial service. The more people living or working inside that one mile radius the more services that are supported. This is why there are so many different restaurant choices in Downtown Portland than other less dense neighborhoods in the city. Likewise the same is true in Downtown Vancouver versus other less dense neighborhoods here. Both Portland and Vancouver have a large number of residents living Downtown but also have a large number of workers commuting into the Downtown to work in the daytime. As Portland continues to shed workers downtown because businesses are leaving, they are shedding services due to less people in the area, and thus shedding residents who no longer feel the advantages outweigh the negatives Downtown. This has been a spiraling issue in the Rose City.

Right now Vancouver has about 6,000 people living in the Downtown (Esther Short). There are roughly twice as many jobs in the area including some 4000 at the adjacent Port of Vancouver. This is a healthy 2:1 ratio. Downtown Portland prior to the pandemic had somewhere in the area of a 5:1 ratio in favor of jobs over residents which was much stronger than Vancouver. Based on recent trends they are likely closer to 2:1 these days closer to par with us. Having more jobs than people helps support a more robust commercial sector bringing positive growth in the available services that ‘locals’ benefit from. People commute in, spend money at lunch and after work, then depart to their suburban home.

Lincoln Property West proposal for 12 story multi-tower apartment project on Block 2 at the Waterfront. Expected groundbreaking in Q4-23 or Q1-24.

Part of Vancouver’s recent success is that Portland is making international news for negative things these days rather than the positive news stories they were enjoying just 10 years ago. Vancouver is becoming a popular alternative because it now offers much of what Portland used to have and with a better upside in the form of lower taxes, lower crime, and better traffic. As Vancouver starts to bring in more employers to the city center many from Portland, we will see a strong uptick in services to support the increased density. Employers are already coming and Vancouver’s 5.8% office vacancy is a strong indicator that companies desperately want to locate here. Those companies moving in pay taxes that help generate cash for the city to make improvements as well as workers to support restaurants and other retail services that residents can take advantage of as well.

The diehard Portland fanboys will argue that Portland still has more of the good stuff than Vancouver. In fairness, by volume that is true. Whether it is true on a per capita basis is another argument. But one thing Portland has on Vancouver is entertainment venues. Portland’s city center has a lot of entertainment venues to see concerts, comedy, off-Broadway plays, and much more. For people that utilize these services more than twice a month, Vancouver will struggle to compete. But for people like me that attend these types of events on a less frequent schedule, we can make the short trip to Downtown Portland for those engagements. From Downtown Vancouver it is only 7 miles to the heart of Downtown Portland. In the evening when these types of events are generally held, traffic is not that big a concern. It’s ten minutes away. It also seems that the Max train is coming to Downtown Vancouver in the next few years as well, so you will be able maintain that car-free status when going to Portland in the near future.

Further complicating issues for the Rose City, Portland has allowed their city to become noticeably dirty, down right filthy if you care to look down at the street. Portland has become completely overrun with street campers that has led to unsanitary conditions and some of the worst litter I have ever seen in a city. Portland has also allowed their city to become one of the most violent places on the West Coast after spending decades as a city known for low rates of violent crime. Many retail stores and restaurants are leaving the city center due to these conditions. All of this negativity is outweighing the benefits of living there for many people who are leaving the city in large numbers. Many of them are headed to Vancouver USA.

When deciding to buy a condominium in Vancouver you can see that the energy in the regional market is clearly here and that bodes well for future appreciation on local condo units. Right now there are no new condominium projects underway in the city center. There are lots of apartment buildings ranging from entry level to high end under construction right now. Many of these renters will decide to stay permanently and they will apply pressure to the market for local condos. On the commercial side of the equation: Vancouver has a double high rise office project under construction now at Terminal One and another high rise office project proposed for Block 1 at the waterfront. Demand is high and that will bring some more of the that daytime city buzz to a previously sleepy daytime Downtown.

At the current pace I estimate by 2030 Downtown Vancouver will have 12,000 residents and 18,000 jobs. That seems like aggressive growth but in 2010 the Esther Short Neighborhood had 2900 residents and today it is up above 6000. Thousands of new housing units are under construction or in the pipeline now. Meanwhile Downtown Portland has been trending down towards 22,000 residents and 30,000 jobs. During the height of the pandemic and riots, Portland had fewer jobs downtown than Vancouver did! Sound weird? Portland had over 100,000 jobs Downtown in 2019 pre-pandemic with roughly 24,000 residents living in the Downtown area including the Pearl and Old Town. It was reported in mid-2020 that only 11,000 people were working in Downtown Portland. They have still not recovered from the nightmare that was 2020 in that city. If Portland can turn things around I’d say by 2030 they will be at 26,000 residents and back up to at least 50,000 jobs Downtown.

Downtown Portland including the Pearl and Old Town is roughly 900 acres lying west of the Willamette River and east of I-405. Downtown Vancouver is about 375 acres by comparison lying west of I-5, north of the Columbia River, east of the BNSF northbound railway, and South of Mill Plain Blvd. It is a bit surprising to see that Vancouver’s numbers are this close, despite the larger and much more densely built up nature of Portland’s Downtown. Portland does have a university campus Downtown with a lot of buildings, I do not know if the local population figures include full time on campus students, I doubt it. All the recent trends have led us to this point, Vancouver is on the upswing, Portland is trending down. I think Portland will turn things around at some point, I just don’t know when. That city has one of the most convoluted administrative structures you’ll find in a municipal government anywhere, so I’m not holding my breath on a speedy recovery down south of the Columbia.

Trends are favorable in Vancouver and that is why you see so many tower cranes up and operating, building office space and new apartments to house the thousands of people and numerous businesses flocking to our city. So long as the local elected officials don’t step in it, this positive trend should continue.

2 thoughts on “Commercial Success is Important to our Local Urban Living

  1. Jim Cornwall

    Now with REI leaving the Pearl district, maybe REI will open a flagship store in Vancouver! Why not? REI is a Washington company!


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