CREDIT: The Province It will take four years to build, but when it is finished the Shangri-La will be the city’s first building taller than 600 feet.

Vancouver‘s cathedrals in the sky are getting a new neighbour to look up to.

The Living Shangri-La on the southwest corner of Georgia and Thurlow will become the city’s tallest building when it’s completed in four years.

At 642 feet (196 metres) and 60 storeys, it will become the first skyscraper in Vancouver to pierce the 600-foot barrier.

At 685,000 square feet, it will also be the city’s biggest building.

Vancouver‘s current tallest building is the Wall Centre, at 491 feet (150 metres).

Under a plan approved yesterday by the city’s development permit board, the Living Shangri-La’s first 15 floors will have 120 deluxe hotel rooms operated by the five-star Shangri-La Hotel chain from Southeast Asia.

On floors 16 to 42, one- and two-bedroom live-work condos start at $400,000 and peak at $1 million.

There will be 63 private units on floors 43 to 59. The penthouse on the 60th floor will be valued at $13 million.

The $250-million tower will also boast the tallest rooftop garden in Vancouver — for private use only — and a large public sculpture garden on the ground floor.

Project developer Ian Gillespie said Vancouver is a world-class city in need of a world-class skyline.

“Vancouver has this incredible natural setting,” he said yesterday. “Vancouver is on the map. But architecturally, Vancouver is not on the map.”

Gillespie, 41, said the Living Shangri-La project will be a world-class landmark.

“It really starts to break out of the mould,” he said.

Gillespie doesn’t predict radical changes to the city’s skyline in the next decade.

“It’s one thing to have a site designated for a tall building. But it’s another thing altogether to actually get it developed. The change is going to be quite gradual.”

Project architect Dawn Guspie said the building will be triangular in shape, allowing it to fit in with city “view cones” of the North Shore mountains.

“We wanted to give it a timeless look,” she said. “It looks rectangular as you look at it from Georgia and Thurlow. It becomes much more animated and is green in concept as it faces the southwest.”

The city gets $16.5 million in benefits from the developers for allowing the building to reach such a height.

In addition to the art garden, the developers have pledged to plant 57,000 trees around B.C., restore a 1913 church next door and help fund social housing.

Jonathan Barrett, the city’s development planner, said the skyline height used to be fixed at 450 feet, but it rose to 600 feet after an intense debate in the late 1990s.

“It was trying to create a shape to the skyline,” he said. “The idea was to create more of a dome . . . that allowed for taller buildings at the centre.”

The city pegged five sites where the giant buildings could be located, along Georgia, Burrard and Granville.

“I don’t think it will be the norm,” said Barrett. “For now, we’re not going to get a lot of 600-foot buildings. Three or four would be my guess.”

The city also recently approved a 50-storey hotel tower next to the Hotel Georgia on Howe.

CATHEDRALS IN THE SKY

– Living Shangri-La: Georgia and Thurlow. 642 feet (196 metres). Due for completion in 2008.

– Crystal Tower: Georgia and Howe. 506 feet (154 metres). Completion in 2008.

– Wall Centre: Burrard and Nelson. 491 feet (150 metres). Currently the city’s tallest building.

– Shaw Tower: Coal Harbour. 489 feet (149 metres). Completion this fall. It will become the city’s tallest structure, but the Wall Centre sits on downtown’s highest point.

– Scotia Bank Tower: Georgia and Seymour. 452 feet (138 metres). Was the city’s tallest for many years.

– Bentall 4: Burrard and Dunsmuir. 454 feet (138 metres). Built to the limit of the city’s previous height ceiling.

– The world’s tallest building is in Taipei, Taiwan, reaching 1,670 feet (509 metres). It is already being surpassed by a 2,000-foot (610-metre) building in Dubai, U.A.E.

– The Freedom Tower, located on the former World Trade Centre site at Ground Zero in New York, will be 1,776 feet (541 metres) tall.

Ran with fact box “Cathedrals in the sky”, which has been appended to the story.

© The Vancouver Province 2004

Booming condominium and townhouse sales helped keep Greater Vancouver’s real estate market humming in June, offsetting a decline in detached house sales.

The number of condo transactions rose to 1,496 last month, a 10.4-per-cent increase over June 2003, the Real Estate Board of Greater Vancouver reported Monday. Likewise, sales of attached properties rose 8.8 per cent to 556.

Overall, 3,501 homes changed hands, one per cent off last year’s pace, as detached house sales declined 12.7 per cent to 1,449. On a year-to-date basis, the number of home sales in 2004 is still running 17 per cent ahead of 2003.

“Condos continue to be the big story, with nearly 45 per cent of sales in the Greater Vancouver market being apartments,” said board president Andrew Peck.

Peck said buyers have grown more confident in buying apartments since the leaky condo debacle of the late 1990s, thanks to better construction and warranties. And, like other sectors of the market, condo sales are being driven by low interest rates and confidence in B.C.’s economy.

Renters who have been thinking about buying may be taking the plunge now rather than risk being shut out of the market by higher interest rates in the future, he said.

Peck said a continued shortage of listings is constraining the activity in detached houses, though the rapid increase in prices over the past year is encouraging some homeowners, especially at the lower end, to put their homes on the market.

Prices continue to rise at a double-digit pace virtually across the board.

For the first time, the Real Estate Board’s benchmark price of a typical house in the region passed the half-million-dollar mark. The benchmark price of a detached home rose 18.7 per cent over the previous year to $501,380.

The value of the benchmark townhouse rose at about the same rate to $321,600, while the condo benchmark jumped 21.7 per cent to $241,180.

The average price of a house in Greater Vancouver — which can be skewed by the sale of very valuable properties such as a waterfront home in West Vancouver that sold last month for a record $17 million — reached a new high of $542,698.

Townhouse prices averaged $313,013, also a new high, while the average condo price edged down slightly from May, to $246,918.

Some of the hottest areas included the Sunshine Coast, where the number of house sales rose 57.7 per cent; East Vancouver, where townhome sales soared 74.1 per cent, and Burnaby, where apartment sales increased 50 per cent.

The total value of Greater Vancouver residential sales (including multi-family rental buildings and undeveloped land) was $1.37 billion in June and $7.94 billion for the first six months of the year. Thanks to the combination of brisker sales and higher prices, the latter represented a 34-per-cent jump over first-half 2003 numbers. Last year’s sales went on to set a record for the region.

The story was similar south of the Fraser River, where the Fraser Valley Real Estate Board recorded 1,825 home sales last month, up a modest three per cent from June 2003. As in Vancouver, however, the number of transactions for the first half of the year beat the year-earlier figure by 17 per cent.

The average single-family home for the region stretching from Delta in the west to Abbotsford in the east was $346,093, up 17.1 per cent from a year earlier. Townhouses averaged $226,115 and condos, $138,177.

“Even though more homeowners have decided to take advantage of the market and make a move from their current residence, and we’ve seen an increase to our new listings, buyers are eating through that new inventory quickly,” said Fraser Valley board president Moss Maloney. “With interest rates expected to increase this fall, it will be interesting to see whether things slow much over the summer.”

© The Vancouver Sun 2004

A West Vancouver seaside mansion that sold for $17 million sets a record for real estate in B.C., but it has many equals and betters in the world market.

The 11,000-square-foot concrete-and-floor-to-ceiling glass stunner at 3330 Radcliffe Ave. fetched $17 million, just under the $18-million asking price, when owner Doug Forster sold it two weeks ago.

He and the realtor are sworn to secrecy, but that hasn’t stopped some neighbours from speculating their street may be home to someone famous. Canadian rocker Bryan Adams, who now lives in London, used to live nearby.

Whoever it is, he better count on a good salary.

Yearly property taxes alone are almost $80,000 a year or almost $7,000 a month.

The five-bedroom behemoth sits on one acre, with 200 feet of shoreline, and has a swimming pool, media room, wine cellar and boathouse with ramp. It’s barely four years old and affords a sweeping view of Lions Gate Bridge to Vancouver Island.

The sale beats the previous record for most expensive home sold in B.C., a Whistler estate home on five acres of lakefront property that sold for $9.3 million.

Sounds exceptional, but alongside other more stately homes listed around the world on the web, it’s merely ordinary.

For the U.S. equivalent of $12 million, a homebuyer could get a 12-room apartment at the base of the Eiffel Tower in Paris with four bedrooms and staff quarters that were built more than 100 years ago for an Italian princess.

Or a 365-acre award-winning vineyard in South Africa, with a main house with four bedrooms, three staff houses and nine guest cottages.

For just a million more than that, a buyer could land Villa la Katira in Mexico, with its 10,000-square-foot, four-bedroom home, 30-horse stables, volleyball and tennis courts on 300 acres.

And for a piece of the famed Hamptons on the eastern shore of the U.S., $20 million US would buy a seven-acre oceanfront compound with a 3,000-square-foot main house and pool and other amenities.

© The Vancouver Province 2004

Credit: Bonny Makarewicz – The Province Squamish residents are upbeat about the opportunities the Olypics will bring to their community.

WHISTLER — There’s no doubt that hosting the Olympics will be good for real-estate prices in the Sea-to-Sky corridor.

But the Games will not be the pot at the end of the real-estate rainbow.

“When the Games were announced, our phones went crazy for two or three weeks and there were certainly some sales, but I think everything levelled off and we really never saw price increases,” said Mike Wintemute, general manager at Windermere Sea-to-Sky Realty. “For the most part, our prices for real estate are about the same, even though we went through that Olympic euphoria.”

The median price of a single-family home in Whistler is about $1.5 million today. That’s about the same as at this time last year.

But the Olympics will make a difference in the long run, said Wintemute.

“The Olympics will introduce Whistler to a whole bunch of people out there that aren’t aware of Whistler and because of the marketing the Olympics will bring, it should have a positive affect on the real-estate market,” he said.

Of course, this will only push the dream of owning a home in Whistler even further out of reach for the average resort worker.

That’s why, said Whistler Mayor Hugh O’Reilly, the resort is working so hard on plans to produce affordable housing for its workers.

A new Community Sustainability Plan should be complete this year, which will aim to keep 75 per cent of the workers resident in the community.

“We can’t provide everything for everyone, but clearly the community has still said, even with housing restrictions, even though they are not going to make a whack full of money on their housing, that it is important that they live here,” said O’Reilly.

A key part of this strategy is tied to the Games, as the resort plans to use the athletes’ village as resident housing in future.

The real winner in the real-estate market has been Squamish. But most in the business believe prices have gone up due to market forces rather than the Games announcement, although it helped.

Prices went up 37 per cent in the 18 months leading up to the Games. But since July 2003, the increase has only been about

10 per cent, and an average home in the Highlands now sells for about $380,000.

“We are not seeing any huge price increases here now,” said Lisa Bjornson, manager of Black Tusk Realty.

Squamish Mayor Ian Sutherland believes the highway upgrade, planned expansion of the waterfront including a ferry terminal, new amenities such as a movie theatre and good investment opportunities are drawing more and more people to the town of 15,000.

“People feel good about the community,” he said. “They feel good about themselves. There is a lot happening — the Olympics and so much more.”

Wintemute believes Squamish will also benefit from the increased exposure the Games will bring.

“[Visitors] might get to Whistler and say, ‘Geez, I can’t afford Whistler, but I wonder if we should look at that community just down the road?'”

Pemberton homes are selling for about the same price today as they did a year ago. A home that cost $442,000 in June 2003 would sell for about $445,000 today, said Wintemute.

But Pemberton residents are determined to grab the Olympic rings and gain whatever opportunities they can.

Plans are already under way to host a western winter carnival every night of the Games, a park-and-ride is under discussion and the local airport is poised for expansion.

© The Vancouver Province 2004

CREDIT: Jason Payne, The Province For his comeback project, Henry Man is growing a condo tower from scratch.

Henry Man is definitely a business bird of a different feather.

For starters, the Vancouver developer simply says, “I don’t want to be greedy.”

While that may seem like an oxymoron in this world of ever-inflating residential real-estate values, consider the following: Man’s private development company,

Magellan2020, contributes 20 per cent of its annual profits to local charities.

Company employees also benefit, with another 20 per cent being targeted for a profit-sharing plan. Everyone, he says, from himself to the receptionist, is a partner in the company’s ventures.

He extends that to include the eventual homeowner.

“The buyer must be treated with absolute respect,” he says.

And respect is something Man already has, both inside and outside the development community.

Sol Wassemuhl, principal architect at Page & Steel Architects in Toronto, the city’s leading residential architectural firm, says: “I have never met anyone more knowledgeable in this field than Henry Man.”

Secondly, Man is a devout Roman Catholic who believes everything is pre-ordained and points to the heavens when asked why he has come out of retirement and dived head-first back into the often vicious development game with a $52-million, 185-unit development in Vancouver’s downtown south side called Freesia.

Man, 44, who by his own admission has more than enough to support his family of three kids and a wife, walked away from the business two years ago when he left the Concord Pacific Group, where he oversaw billions of dollars in real-estate investment in Vancouver and Toronto.

His personal property and investment portfolio afforded him the ability to cover his needs for the rest of his life, and he decided that jetting to Toronto and elsewhere every second of his life spelled danger for his family life.

So he took to the sidelines and spent much time doing family things and becoming involved with his church.

He even withstood a powerful invitation from Victor Li, son of fabled Hong Kong business magnate Li Ka-shing, to relocate to Hong Kong as an executive in one of the Li empire’s flagship companies.

And, that says Man, is where the “man upstairs” intervened again.

“I had no intention of ever going back into this business but, while lunching with a fellow church member, I discovered he was the owner of considerable land holdings [and he] asked me to assist him in planning and developing a downtown condominium project,” says Man.

Well one thing led to another and Man agreed to lend his expertise to designing a condo tower for the site and eventually took over the whole development process.

He was back in the business he thought he had left forever two years before.

The result is Freesia, a 132,000-square-foot building at Seymour and Helmcken that will boast some of the best values in the downtown core.

Construction of the Larry Doyle Architects-designed building will start this fall with completion set for 2006.

Prices will average about $400 a square foot and start at $198,000 for a 575-square- foot one-bedroom unit, ranging up to $765,000 for a three-bedroom, 1,650-square-foot penthouse.

Similar developments are currently fetching $420 to $440 a square foot.

How can he do it?

Attention to detail is probably understating the case. Man has put in endless hours designing the most space-efficient units possible. Some will even come complete with their own little rooftop herb garden, and there are other neat space savers, such as pull-out ironing boards that just slip out like a drawer.

“I believe we have achieved the absolute optimum usage of space in these units, which in turn translates into lower construction costs, which in turn gives me the opportunity to manoeuvre on pricing,” he says.

“I do not wish to be greedy. I have no reason to be and can thus leave something on the table,” the quietly spoken Man says.

Man holds an engineering degree from the University of B.C. and an MBA from the University of Calgary and is very centred on high business ethics and creating sound, lasting relationships.

He firmly believes that from start to finish a successful project has to be a collective effort that benefits the homeowner as much as it does the developer.

Man insists he is not back in the “development game” because he was bored.

“I firmly believe this is what God wanted me to do,” he says, pointing to the heavens again. “This was certainly not something I planned. That luncheon with my church colleague, I believe, was a signal from God telling me to use my talents for myself and for others.”

So, when Freesia is finished in a couple of years, will he retreat to the sidelines again?

Not likely. Man says there are residential projects in Kerrisdale and south Surrey on the drawing board.

© The Vancouver Province 2004

I receive hundreds of questions. (I give thanks, of course!) Here is a sampling, with general-interest appeal, I hope.

Q: I hear the market is turning down. Should I wait before I buy now?

A: In one form or another this is the most asked question. My answer is always the same: The peak of any real estate market is easily seen six months after it peaked, but not before. Forecasters have been announcing a “market turndown” in San Diego, for example, since 1999. In May sales were 34 per cent above the previous May. Buy the best you can for you and your family. Hire good professionals; do your own research, your own due diligence; and buy a good purchase. Do not buy “the market.”

Q: I hear that listings are rising and that this means the real estate market is about to turn down. True or not?

A: Similar question to the first, but with a twist, and driven too much by all the talk about rising listings and the relief it may signal for buyers. What they mean to say is that new listings are rising. (What they mean to imply is that this is bad for the market.) Are listings rising? Yes, but so are sales, from 20 to 30 per cent from Chilliwack to Lions Bay. If sales are increasing that much, logic dictates that new-listing inventories are rising to meet the demand. The listing numbers you should watch are the active listings, a listing of every property still for sale — regardless whether listed this month or six months ago). And that number at the end of May was only two per cent above last year, but a whopping 60 per cent below the May, 1998 number.

Q: Is it true that mutual funds outperform real estate over time?

A: “Facts are stubborn things, but statistics are more pliable,” Lawrence Peter once commented. I look at it from an average person’s point of view. No great sophisticated statistics. You just buy a house. If you had bought a house in Vancouver in 1960 for $13,105 and put $650 down, it is worth today $530,000 and your profit is $529,350. Tax free. Now what did your mutual funds do?

Q: Who offers “unique” mortgages for the “hard to finance” property?

A: Not Robert Frost, but his advise stands: “A bank is a place where they lend you an umbrella in fair weather and ask for it back when it begins to rain.” There are a hundred “unique mortgages.” That’s why you need to see a mortgage broker to explain it all. Some of the stuff out there include:

– The “no proof of income” mortgage. For the self-employed. GE Capital will insure a high-ratio mortgage that accepts income as stated by you. No T-4s. However, make sure that your statements are consistent. If your application says: Income: $200,000. Profession: Janitor from 1990 to 2003, now self employed as professor at UBC … They may not accept your application.

– The ‘bankrupt mortgage’: Xceed mortgage Co. offers a one year discharged bankrupt person with some re-established credit up to 95% financing. (Yep, at a higher rate)

– The “100-per-cent offset of rental income mortgage’: Citizen’s Bank will “offset” the rental income of your investment property by up to 100 per cent. In other words, if your mortgage, tax payments and condo fees are $1,000/month and your rent is $800/month, then you will only have to debt service $200.

The “multiple choice” mortgage. Bank of Nova Scotia’s “step program allows you to register an umbrella mortgage and underneath split it up into credit line/five-year term/open term, etc. pieces.

– The “take one-add one mortgage.” First Line offers a product that increases your line of credit every time you make a mortgage payment in the same amount.

Q: When buying an investment property, how much should I set aside for expenses?

A: Rule of thumb No. 1, for condo fees — $2 per square foot; No. 2, for maintenance, depending on the age and condition of the house – about one per cent of the purchase price annually. No. 3, expect your property not to generate income from time time, by making an allowance for vacancies. Use the vacancy rate in your area. No. 4, create a “reserve pool” of at least one per cent of the purchase price –see No. 3 — and top it up if you have to dip into it.

Q: What is usually included in the asking price?

A: Deciding what stays and what goes is always up for negotiation. Always write items into the contract, and remember almost always what you do not ask for you do not get: I once bought a house in which all the furniture and household goods (including the wine goblets) were thrown in.

Ozzie Jurock is the publisher of www.Jurock.com an independent real-estate advisory service. Telephone 604-683-1111 or e-mail: [email protected]

© The Vancouver Sun 2004

TORONTO – If you’re like the people in TV ads, you may have recently discussed this issue with your spouseNULL or long?

Choosing a mortgage term is a decision that says as much about your personality as it does about your economic analysis. It also depends on how close to the edge you are financially.

Just don’t try to pretend that it’s based on an acute forecast about the future level of interest rates.

Global financial institutions devote massive intellectual and technological resources to predicting rates, but frequently it seems they might as well just flip a coin. It would be unwise to bet your financial comfort on being able to do better than people who have billions of dollars at stake.

Think of Long Term Capital Management, the U.S. hedge fund staffed by Nobel Prize winners that collapsed in 1998 after an errant wager on bond yields.

Closer to home, consider the Conference Board of Canada’s confident prediction that short-term interest rates would rise by 2.25 percentage points over the next year.

That was in late 2002, when the Bank of Canada overnight rate was 2.75 per cent.

It’s two per cent now, though most economists expect an upward move in the second half of this year.

At the Bank of Nova Scotia, whose advertisements play on the short-or-long conundrum, the solution is to split the mortgage principal in two, with part paid by a five-year, fixed-rate mortgage and the rest by a five-year floating-rate mortgage.

Scotiabank’s floating rate is 75 basis points — 0.75 of a percentage point — below the prime lending rate. Prime currently is 3.75 per cent, so the floating or adjustable rate is three per cent.

The rate on a five-year fixed-rate mortgage, posted at 6.7 per cent, is negotiable but probably about 5.5 per cent. This means that short-term interest rates would have to almost double before you’d be ahead of the game with the fixed rate.

So why not just go short?

The short answer is that you probably should — if you and your financial situation can tolerate uncertainty.

“Economically speaking, if you think like a machine and if you have a stomach for this kind of risk, taking variable rates has always been the best thing to do,” says Benjamin Tal, an economist at CIBC World Markets.”Of course, can you sleep at night?

“You have to absorb fluctuations in interest rates,” he cautions. The window for low rates is closing and “many, many people have been borrowing like there’s no tomorrow,” Tal said.

In addition to increasing debt-service costs, rising interest rates would have other effects — for instance, you might lose your job. “Higher interest rates are designed to slow down the economy,” Tal said.

“To the extent that people have been borrowing so much — and we have to remember that the current expansion in consumer spending is the most leveraged in recent history — this also means that as a society we became more sensitive to the risk of interest spikes and to the risk of any other economic shock.”

At the same time, an analysis by Tal and colleague Avery Shenfeld suggests that — because consumers are so deeply indebted — central banks will need to impose smaller rate increases than in the past to cool the economy.

“The likelihood that the Bank of Canada will raise interest rates by 200 basis points over the next two or three years probably is not very high,” said Tal.

Still, the key issue is your margin of comfort and safety.

“One has to make sure that when interest rates start rising, even by 100 basis points — and the impact will be immediate — you have to be able to absorb it.”

Tom Caldwell, chairman of Caldwell Securities Ltd., says he paid off his own mortgage before floating-rate mortgages became common but did well by always taking one-year terms.

“If I want to lock in a rate, I am asking the bank to take that interest-rate risk and, in so doing, they charge to take that risk,” Caldwell observed.

“I figured I would take on that risk, and in the 20-plus years I had a mortgage, I think I was ahead of the curve every year but one or two.”

His strategy worked during a “long-term secular decline in interest rates” while rates now are at four-decade lows, he added, but “if you take the risk, go to adjustable, you’ll probably work out all right.”

– – –

REALITY CHEQUE

Three questions that you should ask yourself before making borrowing decisions, as posed by CIBC World Markets economist Benjamin Tal:

– “If interest rates go up by 100 or 200 basis points [one or two percentage points] tomorrow, can I continue to service my debt?”

– “If tomorrow I lose my job, do I have enough degree of freedom to continue to service my obligations until I find a new one — that is, for six months or so?”

– “If tomorrow I have to pay an extra $20,000 or $25,000 on something — a health-related issue or some emergency repair on the house — can I do it without going into higher debt?”

© The Vancouver Province 2004