Promising tourism expectations in Vancouver and a sluggish office leasing market gave Reliance Properties the confidence to partner with Germain Hotels to convert an aging office building near Coal Harbour into a new hotel. 

Germain Hotels and Reliance Properties announced the partnership in late March to transform an office building at 1111 West Hastings St. into a 180-room boutique hotel under the Le Germain brand. It’s expected to open in 2029. 

Reliance and Germain purchased the 12-storey office building in a 50-50 joint venture. They will redevelop the 1966-built tower through a conversion, Reliance Properties president Jon Stovell told RENX in an interview. 

The collaboration brings together two family-owned Canadian businesses.

It expands and diversifies Reliance's local portfolio, and also helps Germain Hotels develop a nationwide presence.

A "milestone" for Germain

“Expanding into Vancouver is a major milestone for our company,” said Hugo Germain, vice-president, operations at Germain Hotels. “As a family-owned Canadian business, we are deeply committed to creating meaningful projects that leave a lasting impact."

Germain told RENX the announcement of the deal has sparked plenty of excitement among their own people. Having a Vancouver location symbolizes a major step forward for the 35-year-old company that owns or operates hotels in 12 Canadian cities including Montreal, Toronto, Calgary and Ottawa. 

This project will be Germain Hotels’ 22nd property and its ninth hotel under the Le Germain Hotel banner, following the recent announcement of Le Germain Hotel Casino de  Montréal.

The company also operates hotels under the Alt and Escad brands.

“This hotel will not only bring a new level of boutique hospitality to Vancouver but will also play a key role in shaping the city’s urban landscape and help to address Vancouver’s critical shortage of hotel rooms," Stovell said.

Office building to empty over next 18 months

Stovell said the office building is 60-70 per cent leased, but will be emptied over the coming year-and-a-half as leases expire.

"We'll work with those tenants too as best we can, and put them in other buildings that we have that we can make that work for them,” he said.

Holding this building as an office was no longer feasible, Stovell said. He noted that vacancy in the city's inventory of class-AAA buildings is low and demand for the new spaces is high, but elevated vacancy remains a challenge in older buildings. Downtown total office vacancy was 13.7 per cent, according to Avison Young's Q4, 2024 Metro Vancouver office market report. 

Apart from lower demand, Stovell said the major banks have not been eager to finance new office projects. "The major lenders have got really beat up on office after COVID," he said. 

Reliance didn't have the appetite to redevelop the building, and it is already zoned for commercial uses. "We have been, as a company, exploring hotel opportunities quite a bit, recognizing the demand and shortage in rooms," Stovell said, adding the firm has been working with Germain for seven or eight years to partner on a hotel. 

Stovell said they have yet to identify a construction contractor for the conversion. He said the process will include stripping the building out and running new mechanical, electrical, water and air conditioning throughout: "These are things we have done before."

Hotel to appeal to corporate and leisure travellers 

Germain said the Le Germain Hotel brand is categorized as a boutique hotel, typically Four Star-plus. 

The building’s proximity to the convention centre, top restaurants, the sea wall and other hotels means they expect a corporate clientele to favour the hotel, Germain said.

"Also, it's going to be really appealing for the clientele coming to Vancouver for leisure," he predicted. "So I think there's going to be a little bit of everything for everyone."

In Vancouver, there's a lack of accommodation overall, Germain said. "The feedback (for starting a new hotel) has been very positive coming from the various stakeholders in the tourism industry." 

In 2023, Destination Vancouver estimated the city would need an additional 21,000 rooms by 2040 to keep pace with demand, and to mitigate economic loss in the city.  

Other new hotels in Vancouver

Meanwhile, other new hotels or proposed hotels in Vancouver include:  

• Hallmark Hospitality's proposed 151-room AC Hotel Marriott-branded hotel on West Broadway in Vancouver;
• Kalido Hospitality Group's Smithe House, a recent conversion of three floors of office space  into serviced hotel rooms at 225 Smithe St;
• Marcon's updated proposal to build a 32-storey mixed-use tower at 516-534 W Pender St. and 509 Richard St that would include 586 hotel rooms and;
• A proposed 225-plus room hotel in a 30-storey mixed-use tower developed by Nonni Property Group at 888-896 Cambie St. that would operate under the Marriott Autograph Collection brand.