Benjamin Alldritt
Van. Courier

THE future of the City of North Vancouver’s Harbourside lands will be studied for four to six months by a city staff-led task force, council decided Monday night after a heated discussion.

The vacant waterfront lots immediately south of the North Shore Auto Mall are owned by Concert Properties and Knightsbridge Properties, who hope to build anywhere up to 800 new homes and 370,000 square feet of business space there. Introducing residential spaces into a commercial area requires a change to the official community plan, as well as a rezoning application. Last week, the landowners’ representative, Chuck Brook, told council his clients were eager to move into a public hearing on the strength of the public consultation work they had done over the past 16 months.

In September of last year, council was poised to form its own consultation task force – at the developers’ expense – to study both the land-use question and what civic amenities the city ought to extract from Concert and Knightsbridge. The task force was intended to include city staff, local residents, business owners, various advisory panel members, a representative of the Squamish Nation and one from the North Vancouver Chamber of Commerce. That motion was deferred until after the local elections.

On Monday, Coun. Rod Clark attempted to change the funding model, arguing

the city should pay for its own task force and avoid any appearance of bias. Only one councillor, Pam Bookham, seemed to back this idea, and Clark himself was mollified when Gary Penway, deputy director of community development, assured council that the landowners would give the city a cheque, estimated at $60,000, but the task force members would remain “city staff, working for me.”

After Clark’s amendment was defeated, Coun. Linda Buchanan said she thought the task force as a whole was unnecessary.

“Looking at the amount of material we have been provided tonight, as well as last week, there has already been a 16-month community consultation process. We’ve been given numerous reports. What will we accomplish through this task force, or learn differently than we know today?” she asked.

Bookham responded: “When the proponent takes charge of the public input period, he has to be driving the public towards the outcome the developer wants to see. That’s perfectly understandable and that’s the feedback we started to get almost immediately. . . . That’s the difference between a developer-driven process and a community-driven process, which is what we can provide.”

Bookham noted the previous council had unanimously endorsed a task force in principle, and questioned what had changed.

“What has changed,” said Coun. Craig Keating, “is that when I supported a task force last September, I also opposed the notion that we delay that work. The other important thing that has changed is that . . . one of the jobs of the task force would be to make recommendations to city council for the provision of community amenities.”

Keating said since then, the city had changed its policy to require cash contributions from developers to an amenity fund rather than specific amenities. He also described the process as having endured “an unreasonable delay.”

“This is a community-defining project,” said Coun. Rod Clark. “It is a huge introduction of residential in an area that has none, which is beside an auto mall which happens to be lit up like a landing pad every night of the week. Residential down there, to me, is very suspect.”

Clark described the public consultation data from Brook and his clients as “extremely, extremely suspect,” and rattled off their statistics in an emphatically scornful tone. “Public open house number 1, Westview elementary school, back on May 25, 2010: invitations 600, attendees 40, total comment forms 24. Public workshop, 850 Harbourside: invitations 600, attendees 23, participants 19, completed forms seven! Open house number 2, invitations 600, attendees 105, completed forms 40. Town hall meeting, invitations 600, attendees 20, completed comment forms two. Two!

“You tell me why we should introduce residential down on Harbourside based on those sort of numbers,” he said.

Clark accused the applicants of “using statistics to baffle us.” Coun. Guy Heywood said he was generally in favour of introducing residential units to the Harbourside area, but said there were still some questions he wanted to hear answered about the potential impacts. “I’m of a mind where I want my cake and eat it too,” he said. “I would like the task force to proceed. I’d like it to proceed expeditiously and move forward with the public hearing immediately upon its presentation.”

Council voted 4-3 in favour of forming a city task force, with Buchanan, Keating, and Mayor Darrell Mussatto in the minority.

© Copyright (c) North Shore News

PETER MITHAM/FRANK O’BRIEN
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After a five-year hiatus the rush is back on to complete the first major office tower in Metro Vancouver – and the edge is apparently held by Ivanhoe Cambridge.

Last month, the Toronto-based development firm announced that its Metrotower III will be the first Class AAA office tower in Metro to be completed since 2007.

The $170 million building’s completion is scheduled for April 2014. “We have a one-year lead on the downtown projects,” said Gordon Wylie, development manager for Ivanhoe Cambridge.

Wylie is referring to triple-A towers by Oxford Properties, Bentall Kennedy and Telus, all of which are expected to complete by 2015 in the downtown core.

Wylie said Metrotower III, which was started and then stopped at the parking-level stage as the recession hit in 2008, is well placed to draw tenants, even from the downtown.

“There is a lot of lease rollovers coming up in the period before 2014 so we think we are well positioned,” Wylie said. The tower is being built on spec, and Wylie said there has been interest for space that will come to market with pre-leases around $35 per square foot.

Metrotower III is being built to LEED platinum standards, which will help it attract high-end tenants, agrees Bill Elliott, a principal with Avison Young, Vancouver.

“This is the most dominant downtown-like development outside of downtown Vancouver,” Elliott said, because of the existing office and retail infrastructure – the adjacent 1.2 million square foot Metropolis mall – and SkyTrain that surround the site.

“I see Metrotower III as offering a downtown presence in a suburban location,” Elliott said. “Building office space on speculations is always a risk, but I think this is a good risk for Cambridge.”

Transit

The importance of the proximity of the new Metrotower to SkyTrain cannot be overstated, according to Jones Lang LaSalle. “Office locations within 0.5 kilometres of rapid-transit stations have a vacancy rate almost one third [lower] than areas which are not served,” the company noted in a research paper on office and transit links in Metro Vancouver.

The study found that the vacancy rate for offices within walking distance to the Metrotown SkyTrain station is only 3.3 per cent, compared with an overall Burnaby vacancy rate of 7.3 per cent.

“As downtown and Broadway corridor availability decreases and rents increase, our landlord and tenant clients are becoming more interested in transit-oriented suburban locations,” said Jones Lang LaSalle executive vice-president Ray Ahrens. Some new developments such as Broadway Tech Centre are serving this growing demand and more are planned including the Brewery District and Merchant Square in New Westminster and Phase II of the Renfrew Business Centre in Vancouver, he noted.

“We expect to see continued interest in these developments, particularly from employers with back-office operations that do not need to be located downtown,” said Ahrens. “Office buildings located near SkyTrain or Canada Line stations also achieve higher rents than other locations.”

According to the study, office rents close to major transit stations are 8 per cent higher than the Metro average, and the vacancy rate, on average, is 4.8 per cent for transit-friendly locations compared with 12.8 per cent for the overall office market.

Transit links are most important in Surrey. The Jones Lang LaSalle survey found that Surrey’s vacancy rate for offices close to SkyTrain is 0.4 per cent, compared with 25 per cent for space further from transit, and the rental rates for transit-linked space are about 33 per cent higher.

Downtown giants

Vancouver‘s three new Class AAA downtown towers – all expected to complete within three years with LEED-rated space – share a common green theme, but their approach to the market is different as this new development cycle begins.

Telus, which will be leaving its landmark Burnaby tower on Kingsway, will take nearly 300,000 square feet of its 22-storey, 500,000-square-foot Telus Garden complex at Robson and Seymour.

Bentall Kennedy/British Columbia Investment Management Corp.’s new 25-storey office tower at 745 Thurlow is already seeing strong pre-leasing and, based on Bentall’s reputation and existing client list, most observers expect it to be fully leased before completion.

Oxford Properties, the real estate arm of giant pension fund OMERS, represents the only new tower being built on pure speculation. The slender 35-storey tower at 1021 West Hastings is “seeing a lot of pre-leasing activity, some serious tire-kickers,” according to Elliott.

Oxford‘s strategy to offer smaller floor plates within the tower’s 270,000 square feet is seen as a smart move. The typical Vancouver office tenant takes up between 3,000 and 3,500 square feet, and the major demand in the city is being seen for such smaller offices.

The potential of about 750,000 square feet of new top-rated space is already stirring the downtown market, where the Class A vacancy rate is 2.9 per cent, among the lowest in Canada, according to global tenant representation firm Newmark Knight Frank Devencore.

Market churn

“As 2014 approaches, there may be a good deal of churn,” the company stated in a recent report. “With the pending delivery of new space, landlords are also beginning to be more open to negotiating longer-term commitments with their key tenants.”

Jon Bishop, vice-president and general manager of Devencore Co. Ltd., the firm’s local office, said the economics of leasing in one of the new towers for the long term is attractive versus renewing in many existing top-tier premises.

“I believe you’re going to see a new flight to quality that we haven’t seen for a few years,” he said.

But exacerbating the churn is that no major new tenants are coming to town to take advantage of the space. While the city is popular with investors, the tenants are largely familiar faces. Law firms, for instance, are the biggest local tenants.

“All we’re doing is getting companies that are displacing or relocating themselves to different inventory, different product types,” Bishop said.

The good news is that as the churn picks up, this could change. Talent and tax incentives for new companies are spurring interest in companies keen to use Vancouver as a base in North America.

Bishop expects to see more foreign companies scouting space here in the next 12 to 24 months. Companies that want to re-evaluate their real estate needs in the meantime should make a move.

“This is a really good time to do an evaluation on where your business is going and how real estate is going to support that over the next five years,” Bishop said. “The landscape for office inventory is going to be changing dramatically.”

from Western Investor January 2012

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City axes art space, rental suites from Kingsway complex

Cheryl Rossi
Van. Courier

A development proposed for Broadway and Kingsway no longer includes space for artists or rental suites.

City rezoning planner Yardley McNeill told a Jan. 17 public meeting on the development that 9,200 square feet of artists’ studios and 15 rental apartments included in the original development were too small a contribution to the community compared to the cost to the developer for providing them. She said the city believes a larger cash contribution from the developer to the city would provide more bang for the buck. But Rize Alliance Properties Ltd. would need to contribute more than a previously agreed upon $4.5 million cash contribution.

The application for the property includes a two-storey commercial podium, 241 condos, building heights of five, nine and 19 storeys-down from an initially proposed 26 storeys, 320 underground parking spots and widened sidewalks on Kingsway and 10th Avenue.

McNeill told those who filled Heritage Hall the cash from Rize would be spent on a public benefit within Mount Pleasant and that the rezoning could go to a public hearing for council’s decision by the end of February.

McNeill said if the rezoning is approved, public consultation would follow on how to spend the money, which could go toward a park, daycare space, affordable housing or a cultural amenity. Council would make the ultimate decision. She estimated it could take two to five years before the public saw concrete results from the developer’s money.

City director of planning Brent Toderian said Jan. 18 that city staff will recommend the money be spent on a cultural space, and perhaps help provide affordable housing. The city’s change to the proposed development at the southwest corner of Broadway and Kingsway was not welcomed by all at the open house. Some residents wondered whether the city takes seriously the Mount Pleasant Community Plan, approved in November 2010. The plan called for support for the creative community and rental housing.

The Residents Association of Mount Pleasant, or RAMP, ran an unauthorized information table at the meeting to note the revised proposal doesn’t address requests from the community for the development to include rental units geared to income, an inner courtyard that serves as a public space, the guarantee of artist live/work space with affordable rent and subsidized housing.

Most of the questions at the open house concerned the development’s height and size and how the proposal fit with the community plan.

City planner Peter Burch said residents involved with the creation of the plan considered the public benefits that could stem from largescale developments. He said they pinpointed the Broadway and Kingsway, Kingsgate Mall and Main Street IGA sites as suitable for large developments.

“During the course of the Mount Pleasant plan there was a sense of trying to balance off where significant development might go to achieve these other things,” he said.

McNeill said the city had received more than 1,700 responses to the proposed rezoning, 40 per cent in favour and 60 per cent opposed. A quick tally of comments from the Jan. 17 open house showed 60 per cent opposed, 35 per cent in favour and five per cent neutral.

Planning staff will support the rezoning in their report to council. The city continues to accept public comment. For more information, see Vancouver. ca/rezapps.

© Copyright (c) Vancouver Courier

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Vancouver‘s housing market is a bubble that is about to deflate. The Vancouver housing bubble is a myth and average home prices will continue to increase in 2012.
Those are the dueling counterpoints from increasingly bearish lenders and bulllish real estate executives as they forecast the future for Canada’s traditionally hottest housing market.
CIBC chief executive officer Gerry McCaughey recently joined analysts at the Royal Bank of Canada and Bank of Montreal in warning that Canada’s housing market, and Vancouver in particular, is poised for a downturn this year. McCaughey warned that the condominium sector in both Vancouver and Toronto “might be peaking” due to overbuilding and over evaluation.
“When you look at markets like Vancouver and Toronto, there is a level of caution from a risk perspective that is higher today than it would have been a few years ago,” agreed RBC CEO Gordon Nixon.
Western Investor also found anecdotal evidence on the streets of Vancouver that condomium sales and prices hikes have cooled in recent weeks. “We are seeing more price changes, all downward,” one East Vancouver realtor confided.
But Royal Lepage Real Estate Services, in a housing outlook study released this week, is much more bullish. The company is forecasting a 2.3 per cent increase in average prices this year following a surprising stellar 2011. Last year, the company notes, the average price of a Vancouver bungalow increased 14.1 per cent to just over $1 million and the average condominium price was up 10 per cent from 2010 to $536,500.
“Investment from Asia continued to add to demand for real estate in Canada’s most expensive market,” said Bill Binnie, broker and owner of Royal LePage North Shore.  Binnie also noted  that low interest rates drove demand for Vancouver homes. “While we anticipate some slowing of the market this year, we believe calls for a price correction – particularly in the condo market – are unfounded,” he said.
“In the recovery period following the 2008-2009 recession, I found myself repeatedly speaking of ‘irrational exuberance’ in the Canadian housing market,” added Phil Soper, president and chief executive of Royal LePage Real Estate Services. “Expectations were too high and the pace of expansion unsustainable. With this report, I find myself in exactly the opposite position. Widespread calls for a major real estate correction in 2012 simply can’t be justified. The industry has significant momentum entering the year, and is buoyed by the stimulative effect of very low interest rates; we expect the market to continue to expand – albeit at a slower pace.”

Western Investor