The finishing touches are being put on the impressive new headquarters for Andrew Sheret’s head office, but it may be a while before the plumbing giant has company in its new digs.
The six-storey, 60,000-square-foot steel, concrete and glass building is now open for business at 740 Hillside Ave.
While Andrew Sheret has moved its administration, showroom and plumbing supply operations into the building, a glut of office space in the Victoria market suggests finding tenants for the rest of the building could take some time.
“There is a lot available. The vacancy rate is not ideal but we didn’t build it to have it leased out either,” said Eric Findlay, Andrew Sheret’s vice-president.
“We wanted it as a long-term holding for us. We plan to operate here for 40, 50 years.”
The 122-year-old company, which has seven locations on Vancouver Island and 23 around the province, spent more than $20 million on the building and finished moving into the site at the end of November. It had been at its old location at the corner of Bay and King streets, two blocks away, for 60 years.
Andrew Sheret’s head office and administration occupies the 10,000-square-foot fourth floor, while Splashes showroom has 3,500 square feet on the ground floor. The company’s two-level, 30,000-square-foot storage facility and plumbing supply store for contractors and retailers is underneath the building with access onto Market Street.
“We occupy about 55 per cent of the building ourselves,” said Findlay, adding there’s no rush to fill the remaining space.
“We have always had a cautious approach to how we do development, so we can survive for quite a while.”
Findlay said they will be able to wait out the market, adding there is always a flight to quality construction and new supply.
“It is a tough market,” said listing agent Amanda Neal of DTZ Victoria. “There is limited demand on the office side of things, but if there is a trend it’s in upgrading. And the opportunity for Class A space that is in existence today is still rather limited.
“One good thing that bodes well for us is anyone who has toured through the building has been very impressed. Once we get people through the door, the building sells itself.”
The building has a LEED Silver energy efficiency rating with high-end finishes, 12-foot ceilings, in-house daycare and gym, and 360-degree vistas. The top two floors offer expansive views toward James Bay and beyond to the Olympic Peninsula.
Neal said Andrew Sheret is offering aggressive pricing at “below what would be considered average for a brand new Class A building” and will offer an allowance for tenant improvements.
Neal said in the current climate that kind of incentive is necessary.
Randy Holt, vice-president of DTZ Victoria, said the market for office space is as tough as it gets.
“The market continues to have as much inventory or vacant space as it’s ever had and that’s been ongoing for four or five years, there’s been almost no net absorption of space since 2008,” he said. Since then, almost 700,000 square feet of office space has been added to the mix. “And 2014 will prove to be another year of tepid absorption.”
However, Holt said new buildings are attractive.
“There’s always the musical chairs. There’s always people who move to better quality space, particularly given rates have been under some pressure because of the amount of vacant space out there,” he said.
As for Andrew Sheret’s old location, the company has put it on the market. The old administration building has already been leased, but the 19,000-square-foot warehouse, which includes what was the Splashes showroom, remains vacant.
“Our intention over the long-term is to redevelop that site,” Findlay said.
