‘Big head of steam’ built by real estate

Ashley Ford
Province

The already robust housing industry will storm ahead to new records next year underpinning an improving provincial economy, the Credit Union Central of B.C. said yesterday.

Helmut Pastrick, the central’s chief economist, says the powerhouse sector could easily keep charging ahead into 2005 as well.

He says the main propellant is continuing low mortgage rates and the building boom will be spread all over the province.

Plenty of pent-up demand also exists in the market, he says.

Mortgage rates could even go lower next year, Pastrick suggests, as the Bank of Canada cuts rates to offset the higher dollar.

The credit union predicts housing starts could reach 28,800 next year, a jump from this year’s expected 26,200 starts and a huge increase from the 21,625 starts recorded last year.

Jock Finlayson, chief economist of the B.C. Business Council, agrees with Pastrick’s optimism and says housing construction and real estate in general has “built up a big head of steam” in the province.

He said whether it will be the leading growth sector remains to be seen, but it will certainly be a large part of an overall improvement in the B.C. economy next year.

Energy prices are expected to remain strong and long suppressed commodity prices in base metals are all improving, he said.

Wheat shipments through West Coast ports are also up and even the pulp and paper sector is starting to see some improvement. “It is all good news,” he said.

Pastrick says the residential and consumer sectors will lead to an overall moderate improvement in the provincial economy next year.

“Residential investment spending — new construction, renovations and transfer costs — will remain a key source of B.C.’s economic growth in 2004. It’s forecast to contribute about 35 per cent of total real GDP growth,” Pastrick said.

Despite the good news, job growth is expected to remain moderate at just below two per cent, with income growth close to the inflation rate and population growth close to one per cent.

Housing sales next year will rise by five per cent, to 91,800 units, 11 per cent ahead of 2002.

In other real-estate sectors, industrial and retail will show stronger growth but commercial real-estate markets will remain mixed.

In another report yesterday, the BMO Financial Group also forecast that the province’s economy will improve over the coming two years — but progress will be slow.

“Next year’s pick-up in growth will be welcome, but our forecast still sees 2004 as the eighth consecutive year when B.C.’s economy will grow more slowly than the national average,” said Tim O’Neill, BMO’s chief economist.

HOUSING FORECAST

2002 2003F 2004F

Residential MLS sales 82,737 91,800 96,400

Residential MLS average price $239,620 $256,000 $280,000

Total housing starts 21,625 26,200 28,800

Single family housing starts 10,730 12,300 13,500

Multi-family housing starts 10,895 13,900 15,300

Renovation spending (millions) $2,840 $3,050 $3,270

Rental vacancy: Multi-family 3.3% 3.8% 4.1%

Source: MLS F = Forecast

© Copyright  2003 The Province

Frances Bula
Sun

Some of Vancouver’s biggest property developers have put in their names to redevelop the former Woodward’s department store, with plans that range from razing the building and putting up a cluster of towers to creating an arts, culture and crafts market or building a West Coast longhouse at the centre of a multi-faceted urban village.

Their first-draft plans also include native healing centres, information-technology spaces, arts complexes, social services, and dozens of other ideas, along with various mixes of social housing, rental apartments, condos, live/work units and lofts.

“We’re constantly looking at projects, especially with a scale to them where you can create a neighbourhood,” said Matt Meehan, the vice-president of planning for the city’s biggest housing developer, Concord Pacific, which put in a proposal. “There aren’t many sites of that size left in the downtown. We’re moving into that area anyway with our Costco building. And there seems to be political will to do something and that always helps.”

Other major local developers listed in a report going to Vancouver city council Tuesday include:

– Concert Properties, a pension-funded development company;

– The Holborn Group, whose principal, Simon Lim, used to co-own the building with Kassem Aghtai;

– Kingswood, the Segal family company;

– Millennium Properties, the Malik family development company;

– Westbank Projects, headed by developer Ian Gillespie.

Some developers say the only way to develop the site is by knocking down all or most of the building, while others maintain they will preserve large chunks of it. Two developers suggest developing a “superblock” project by incorporating other land on the block. Many specifically talk about the importance of restoring the block so it becomes the new economic, cultural and social centre for a revived Downtown Eastside.

Besides the developer proposals, the city had also asked retailers and agencies to put in their own proposals. Among those received were:

– Army & Navy department store, the Cohen-family owned store that remained an anchor in the Downtown Eastside long after many other businesses fled;

– Bekins Moving and Storage;

– Simon Fraser University‘s School for the Contemporary Arts;

– Vancouver Community Colleges‘ Contemporary Design Centre and School of Music;

– A proposal for a bowling alley in the basement;

– The Original Costume Museum;

– Vancouver Native Health Society;

– 411 Seniors Centre;

– Society for the Promotion of Design and Innovation in British Columbia,

In a somewhat unusual process, developers will be asked to talk about their proposals with the public at two meetings in late November. Then, in January, the city’s Woodward’s steering committee will choose a short list of developers, as well as indicating which other institutions or agencies it would like to see housed in the building.

After that, the short-listed developers will come up with more detailed proposals that show design work and that incorporate spaces for the designated other uses.

Councillor Jim Green, the committee’s co-chairman, said that he was impressed with some of the presentations, which he called “very high-quality, very well-thought-out, very creative.”

Now, he said, the committee has to sort through all of them and figure out what will work best for the city.

“We’re not closed to any possibility at the moment.”

It’s still up in the air whether the city will simply sell, with conditions, to a developer or maintain control of the building and have a developer/manager build the project.

© Copyright  2003 Vancouver Sun

Sun

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Ashley Ford
Province

An architect’s model shows the changes to be made to Shaughnessy Mansions

Shaughnessy Mansions, a rare example of early Vancouver apartment construction in the heart of South Granville will survive for another century providing accommodation for city residents.

The four-storey brick, heritage building at Granville and 15th was built in 1911. Current owner Jameson Development Corp. will maintain the original facade and spend $16 million transforming the building into 36-apartments, ranging from 547 square feet to 1,584 square feet penthouses.

The original ground floor space that has housed a variety of small enterprises over nine decades will also be retained as will the building’s original tile name embedded in the sidewalk.

It was one of the earliest purpose-built rental apartment buildings in the city with two-bedroom units.

Prices will range from $252,900 to $600,000 plus.

The distinctive building is one of the last examples of early commercial construction in the area.

Says Bob Rennie, of Rennie Marketing Systems: “There are very few buildings like this in the city.”

The developers started out 18 months ago with the intent of preserving an important piece of the history of Granville Street and, working with the community, have achieved that aim, Rennie said.

The design, by Walter Francl Architects Inc., will maintain the original external brick walls and match them with new brick where needed to keep the original look. There will also be an a second floor interior courtyard with Japanese pond. The third and fourth floors will have unique hanging walkways.

The courtyard is covered by a glass ceiling allowing huge amounts of natural light to flood in. Every unit will face both outward and also have window views onto the inner courtyard.

All 10-rooftop penthouses have their own individual roof gardens accessible from within each unit.

The original nine-foot ceilings will also be retained. Hardwood floors will be standard throughout the units with high quality fixtures and appliances.

Construction will start early next year and with completion in Spring 2005.

© Copyright  2003 The Province

Frances Bula and Matthew Ramsey
Sun

Artist’s drawing details a preliminary design for an addition to the Vancouver Convention and Exhibition Centre.

A unique preliminary design for Vancouver‘s convention-centre addition has emerged after months of quiet negotiations between the city and designers.

“We’re expecting a handsome piece of architecture and this design is evolving in the right directions,” said the city’s central-area planning director Larry Beasley, the city’s chief goal-setter when it comes to shaping the downtown’s most important buildings. “We’re optimistic about what we’re seeing.”

What has emerged is a low, terraced building that descends 40 feet from the escarpment at the edge of West Hastings down to the waterfront and out over the water, appearing to be an extension of the Harbour Green Park to the east.

The design for the half-billion-dollar Vancouver Convention and Exhibition Centre expansion project was quietly put on display for the public Monday, provoking approval from early passers-by.

Marilyn MacIver of Vancouver liked what she saw when she stopped by the design open-house at the Trade and Convention Centre Monday afternoon.

“I like it. It’s short. It fits in. It doesn’t overtake and it’s easy to get around,” said Vancouver resident Marilyn MacIver. “It looks like it’s visitor-friendly, people-friendly. I like the greenway part of it. It makes the city look good.”

Grant McTavish remembers the days when the Coal Harbour foreshore was dominated by industrial uses. McTavish says the convention centre design, with its sloping angular roofs, adjoining park and low profile in relation to the apartment and business towers behind will be yet another “feather” in Vancouver‘s cap.

“It fits right in, seems to me. I think it will be a really gorgeous addition [to the shoreline],” he said.

Like many of the visitors to the design open-house, Susan Fisher wondered whether the green roof in the pictures and on the model would be covered with grass in a roof-top park.

“It would be interesting to see something like that, because there’s so much concrete in the background,” she said, adding that she, like McTavish appreciates efforts to make the proposed convention centre match well with its neighbours.

“It blends. That’s the first word that comes to my mind,” she said.

The building’s project manager, Russ Anthony, and Beasley both said the building still has many modifications to go through, depending on what is doable at what cost.

“This is the starting point,” Anthony said.

But it incorporates basic principles that the city set from the beginning:

– It doesn’t compete with the sails of the main convention centre next door, icons that identify Vancouver around the world.

– It allows the public to continue walking along the waterfront as well as over the site, instead of cutting them off.

– It doesn’t look like a black box, which convention centres, often the ugliest buildings in any city, did in their first-generation models.

Architect Dave Galpin said the new design became possible once the city allowed a planned arts centre to be moved from the site. That allowed the building and walkways to flow without a break across the space.

The actual exhibit space, usually the most difficult to incorporate attractively because it’s a windowless box, will be backed up against the escarpment and invisible from the waterfront.

The building is being designed by a three-firm group that includes the lead design group LMN of Seattle, internationally recognized convention-centre experts, along with two local firms, Downs Archambault and Musson Cattell Mackey. The landscape architect is Don Wouri, who also designed the park next door.

The building will need to get both provincial and federal environmental approvals, but doesn’t require any further political approvals. It does have to go through the city’s urban design panel, however. The panel is a team of architects, engineers and designers who assess the design strengths and flaws of the city’s major buildings.

© Copyright 2003 Vancouver Sun

Prices being paid for downtown land labelled as ‘insane,’ ‘crazy’ and ‘nuts’

Wyng Chow
Sun

PRICEY DIRT: 1900 West Georgia, shown on aerial photograph below, is the most expensive building lot on a list of top downtown properties. Others are listed in order of sale price per square foot. (See hardcopy for graphic)

CREDIT: Bill Keay, Vancouver Sun Developer Peter Wall, pictured here outside a lot at Homer and Smithe, says people will always come to Vancouver because of its scenery and climate

A land rush is heating up in downtown Vancouver, with bidding wars from developers pushing prices for residential building sites up to astronomical levels.

Driven by a seemingly insatiable consumer demand for condominium units and a shrinking land bank, developers are now willing to pay in excess of $100 per buildable square foot — double the prices of only a couple of years ago.

“We still have land on the Lower Mainland, but in Vancouver, there’s not much left, especially downtown,” said financier Peter Wall, blamed by many of his peers for driving up land values.

Wall, chairman and CEO of Wall Financial Corp., who recently launched construction of more than $400 million worth of condominiums in the downtown core, is already negotiating the purchase of three more development sites.

“I’m still a land buyer today,” Wall said. “When something becomes available, you have to react. You can’t be a follower.”

The current land costs are variously being labelled by critics as “insane,” “crazy,” or “nuts,” although development industry luminaries say there always seems to be some brave soul willing to step up to raise the ante.

Critics, however, point out that the end result will be higher condo prices for consumers as the desirability for living downtown continues to soar. At present, there are several billions of dollars worth of residential towers under construction in the Yaletown, False Creek, Downtown South and Coal Harbour areas, with more on the drawing board.

Vancouver city council recently voted to sell a development site at the busy intersection of Richards and Robson to the Millennium Group for $13 million, or about $100 per buildable square foot — a record price for the Downtown South.

The next two highest offers were for $80 and $75 a foot for the vacant lot, offering a maximum 135,000 square feet of redevelopment potential for residential and commercial uses.

By contrast, choice waterfront property along Coal Harbour, where upscale condo units have presold at prices of up to $6 million, has yet to top $92 per buildable foot.

Only a few years ago, developers were more accustomed to paying $30 to $50 a foot for coveted sites.

Commercial realtor Bryce Margetts said the rising prices have caused a growing number of his clients to pause.

“Downtown land is getting too expensive for a lot of them,” said Margetts of Colliers International. “There’s not much land left, definitely a significant lack of supply.”

Over the next several years, Wall plans to develop a total of 850 new condo units in three residential towers at Mainland and Homer, which he considers the “gateway to Yaletown.”

Wall paid $29 million — or $59 per buildable square foot — to acquire the 2.26-acre property, known as the Maple Leaf Storage site, in fall 2002, beating out four other major developers.

It was this purchase that prompted others to blame him for driving up land prices.

“That was the catalyst for everything,” Margetts noted. “When Peter Wall bought the Maple Leaf site, people said he was overpaying. Now it turns out to be a great buy. Now everybody would love to get a downtown site at that price.

“Since Labour Day, the (land) market has heated up considerably. Previously, hardly anything closed at over $60 per buildable foot. The current market is clearly above $75 a foot for any site in the downtown core with residential zoning.”

So far, the highest price ever paid for a residential development site anywhere in Vancouver was the $126 per buildable foot for a one-acre vacant lot in the 1900-block West Georgia, at the entrance to Stanley Park.

At the time of the September 2002 sale, Millennium Group president Peter Malek, who “came in second,” ironically called that winning bid “absolutely ridiculous.”

David Podmore, CEO of Concert Properties, acknowledged that he was scared off from bidding on the Richards and Robson site, the city-owned property now being sold to Malek.

“We were of the view it would go for a price that we would be concerned about, so we backed off,” Podmore said.

Cressey Development Corp. vice-president Scott Cressey, who was among the unsuccessful bidders at 788 Richards, said rising land costs will result in higher condo prices.

“I empathize with the end user,” Cressey said. “Every inputted price, including land acquisition, development cost charges and construction costs, has to ultimately be passed on.

“Developers have to realize a certain minimum profit margin. It’s always an interesting challenge. It’s a scary concept.”

For his part, Wall dispels any notions that Vancouver‘s condo market may be getting saturated. He expects sales to remain hot, as Multiple Listing Service figures indicate developers still can’t keep up with consumer demand, given record low mortgage rates and optimism over the upcoming 2010 Olympics.

Between May and June, it took Wall only 11 weeks to sell all 456 units at his Electric Avenue condo project in the 900-block Hornby, $104 million worth.

In August and September, it took him five weeks to sell all 423 units at the Hudson, at Granville and Dunsmuir, raking in $101 million.

And while marketing for the first 300 units at Yaletown Park won’t be launched until February 2004, Wall said he already has more than 150 people on a waiting list.

“People will always come back to Vancouver,” said Wall, a developer for more than four decades.

“As long as we’ve got the mountains and the ocean, low crime and little racial prejudice, and moderate weather, you can’t beat people off with a big stick.”

© Copyright  2003 Vancouver Sun

Sun

Ashley Ford
Sun

Home insurance is treated with about as much enthusiasm as a dental visit by most homeowners.

“We know we have to have it but most people treat it like a trip to the dentist — they just want get in and out as quickly as possible,” says Dennis Prouse, Government Relations Manager with the Insurance Bureau of Canada.

“A lot of people don’t know who their insurance company even is, and some don’t even know where their policy is kept in the home,” he says. But a series of natural disasters that have befallen B.C. of late — from forest fires to SARS and floods — are serving as a wake-up call for consumers.

Home insurance — the only subject this story deals with — is a relatively simple business in what is an extremely complex insurance universe.

Although the onus is on consumers to keep themselves informed, Prouse says it’s only after disasters strike that the phones start ringing in his office and those of the 30 insurance companies operating in B.C.

However, clearing away the trees to see the forest is not difficult. It simply requires a common sense approach. Insurance coverage of your home and its contents should begin the moment you become the legal owner or tenant and arranging coverage is relatively straight forward.

“Home insurance is a product like anything else and the primary rule is to ask lots of questions and know exactly what you are buying, what is covered and what is not.”

Read your policy. If it is too complex to understand help is available through IBC’s website at www.ibc.ca, or various publications and brochures it produces.

The second most important thing is to “shop around.” There is no such thing as a standard home-insurance policy. Conditions and premiums in the highly competitive industry vary from company to company, Prouse says.

Many people don’t understand what the overriding philosophy of insurance is, he says.

It is intended to put things back the way they were before the tree fell on your roof, an earthquake hit, a fire and resulting water damage or a sewer backup. It is not to make them better than they were before, he says.

Virtually any risk can be insured against except flooding, Prouse says. “The only natural major disaster excluded is water over land.”

The words “Act of God” are an enduring myth. “They do not appear on any Canadian policy but the phrase always arises when disasters like the latest floods happen,” he says. Water damage is a very complex matter and must be addressed with your company or broker, Prouse advises.

Such things as earthquake coverage are readily available but, surprisingly, only 60 per cent of B.C. residents opt for the coverage, despite the fact the premiums are very reasonable compared with earthquake-prone California.

On all policies the “exclusions” or areas not covered are clearly spelled out. For instance, one newer exclusion concerns illegal marijuana grow operations.

Once again know exactly what is covered and what is not, he says. For instance, jewelry is a difficult area that should be carefully covered. The insurance company may require a schedule of jewelry and its value.

“Our advice is if you can’t wear it, store it somewhere safely. Keeping it around the house is an invitation for difficulties,” he says.

Every homeowner should value their contents and record them and insure them accordingly, said.

“Many don’t realize just how much value is in their contents. We strongly recommend doing an inventory because it is very easy to become underinsured. It is also a good idea to keep it in a safe place,” he says.

And finally, a word of advice to snow birds and others who leave homes vacated. The coverage changes after a property has been vacant for 30 consecutive days.

Contact your insurance company or representative before vacating a home.

© Copyright  2003 The Province