Oxford Properties Group’s new Vancouver office tower will cost about $500 million (US$386 million) to build, according to a person with knowledge of the project.

The real estate unit of Canadian pension fund OMERS announced Wednesday it will begin construction of The Stack, slated to be the largest and tallest commercial development in downtown Vancouver. The 540,000-square-foot (50,168-square-meter) project will climb 530 feet (162 meters) in a twisting box design, according to a statement from the Toronto-based firm.

“We’re adding significant and much-needed new supply to Vancouver’s extremely tight office market and to accommodate the city’s economic growth,” Chuck We, vice president of office at Oxford, said in the statement.

The building has lease commitments from Ernst & Young LLP and law firms Blakes and DLA Piper Canada LLP, which together have taken 207,000 square feet of space. Construction is set to begin in the first quarter of next year with completion scheduled for 2022.

The investment comes amid a crunch for office space in Canada’s biggest cities. Downtown Vancouver had a 4.7 per cent vacancy rate in the second quarter, the second-lowest of any major market in North America, Oxford said. Investment in the country’s commercial real estate market reached a record height in the second quarter, boosted by Toronto and Vancouver.

Oxford and Canada Pension Plan Investment Board each have a 50 per cent stake in The Stack.