230-room hotel: Office-to-hotel conversion for major Surrey tower mid-construction

Construction begins on 23-storey office tower next to Surrey Memorial Hospital

New 500-bed student housing tower to be built in Surrey City Centre

New acute care tower to be built for Surrey Memorial Hospital expansion

Potential pivot from major office to hotel uses for future Metrotown tower

New office space at Metrotown SkyTrain tower to become a 159-room hotel

Over five million sq ft of office space in Metro Vancouver is currently vacant

Proposal for new office tower addition at Fairmont Hotel Vancouver withdrawn

UBC acquires even more land for future Surrey City Centre campus

As previously reported by Daily Hive Urbanized, construction on the 23-storey City Centre 4 office tower first began in Fall 2022. At the time, there were plans to provide City Centre 4 with 359,000 sq ft of commercial office space, including 75,000 sq ft of purpose-built wet lab space for life science, biomanufacturing, and research organizations.

Moreover, in Spring 2022, Surrey City Council approved a commercial mix of 266,000 sq ft of general office space, 43,000 sq ft of post-secondary education space, 21,500 sq ft of medical office space, 4,700 sq ft of restaurant space, and 25,800 sq ft of other commercial uses.

According to the new application submitted by the developers, nearly two years after site preparation and construction began, City Centre 4’s building uses will be revised to enable a significant tourist hotel.

The top 10 levels of this 23-storey office tower — between levels 14 and 23 — will be converted into hotel uses with a total of 230 guest rooms. It is noted that there will be no accessory uses to the hotel.

Based on the previous approval, this tower will contain 638 vehicle parking stalls within its underground levels, but with the new major hotel uses, the vehicle parking capacity requirements will drop to 564 stalls, including the 184 stalls required for the hotel.

City of Surrey staff support the hotel uses as it is “an employment generator and will support the vision of the Medical District in the City Centre by providing convenient hotel accommodations for workers, patrons, and visitors to the Medical District.”

Surrey Memorial Hospital is set to see a major expansion over the coming years, and the growing cluster of clinic, medical research, general office, tech, institutional, and post-secondary uses in the area will help support the hotel uses, which is further aided by its close proximity to King George Station.

As well, there is a growing need for more hotel rooms in the region. According to a 2023 report by local tourism bureau Destination Vancouver, Metro Vancouver is facing a shortage of 20,000 hotel rooms over the coming decades, including 10,000 within Vancouver and 10,000 in other areas of the region outside of Vancouver. Without a meaningful increase in hotel room supply, the shortage will send hotel room rates to new heights, deter tourism, and impact many tourism-dependent jobs and the region’s ability to attract concerts, events, and festivals. The forecast of a seasonal shortage beginning in the peak season of 2026 will grow over the subsequent years.

In March 2024, Lark Group and ICT Group also announced a major change of use for its future City Centre 5 office tower, which was previously envisioned as an 18-storey office tower. As visualized in the original conceptual artistic renderings, City Centre 5 will be located immediately north of City Centre 4, sharing an internal plaza with the tower that is currently under construction.

City Centre 5 will now incorporate a significant student housing component of over 500 beds for both students and faculty as a partnership with Western Community College (WCC).

The mixed-use building of City Centre 5 will include not only student and faculty housing but also potential short-term housing space for local healthcare institutions. There will also be a cafe and a large dining hall supported by WCC’s Bachelor of Hospitality internships and practicums, resident support offices, a multi-purpose room, an Indigenous-focused reflection space, laundry facilities, student study, lounge and kitchen area, and bike storage spaces.

City Centre 5 is also under construction, with its completion scheduled for the third quarter of 2028.

Based on the original project timelines, City Centre 4 is expected to reach completion in late 2025.

The first three HTD buildings in existence by Lark Group and ICT Group — City Centre 1, City Centre 2, and City Centre 3 — have a combined total floor area of roughly 500,000 sq ft of various types of office space. Future phases of HTD on adjacent lots could add an additional million sq ft, generating employment spaces for 15,000 people or more. City Centre 1, the first building in HTD, reached completion about a decade ago.

Immediately to the west, the University of British Columbia (UBC) has formed a five-acre land assembly for the potential construction of a major mixed-use academic and residential campus, UBC Surrey.

Of course, there is currently a weakened demand for office space. According to commercial real estate firm CBRE, as of the end of the second quarter of 2024, the leased office space vacancy rate across Metro Vancouver is currently hovering at 9.7%, including a suburban office vacancy rate (areas in the region outside of the downtown Vancouver peninsula) of 8.4%. Although these represent heightened vacancies compared to pre-pandemic activity, this still represents the lowest office vacancy rate amongst major urban centres in Canada and the United States.

CBRE also states there is growing interest in office conversions to some other uses, with some new developments shifting mid-construction to either residential or hotel.

Major office-to-hotel conversions are also planned for the future 66-storey Citizen mixed-use tower and the 2023-built 48-storey Highline mixed-use tower, which are both located in the Metrotown district of Burnaby.

You might also like:
• Construction begins on 23-storey office tower next to Surrey Memorial Hospital
• New 500-bed student housing tower to be built in Surrey City Centre
• New acute care tower to be built for Surrey Memorial Hospital expansion
• Potential pivot from major office to hotel uses for future Metrotown tower
• New office space at Metrotown SkyTrain tower to become a 159-room hotel
• Over five million sq ft of office space in Metro Vancouver is currently vacant
• Proposal for new office tower addition at Fairmont Hotel Vancouver withdrawn
• UBC acquires even more land for future Surrey City Centre campus