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Real estate brokerages have licences restricted

Joanne Lee-Young
The Vancouver Sun

Two fast-growing Vancouver area brokerages have had restrictions placed on their licences by the Real Estate Council.

The council will not say when it placed the restrictions, and details about possible misconduct and consumer risk have only been publicly accessible since the regulator made changes to its website this month.

“Conditions may be placed on a licence for a variety of reasons. We recommend that anyone with questions about the circumstances that led to conditions being placed on a licence or the length of time the conditions have been in place, should ask the licensee about those issues,” the council said in an emailed statement. 

The council has ordered that Metro Edge, which says it completed over 400 transactions in 2015, appoint a managing broker approved by the council who must sign-off on all listing information ahead of it being posted.  The managing broker must also submit monthly reports with details about all transactions where the company represents both the buyer and seller and detail the use of any unlicensed assistants and their exact duties. Authority for trust account signing, including for electronic transfers, must be approved in writing and ahead of time by the council. It must also alert the council of any listing that offers any form of “commission bonus.” 

At Nu Stream, the council has imposed many of the same restrictions, plus ones appeared aimed at containing the company’s expansion. Nu Stream may not “submit any applications for the licensing of any additional office locations or branches other than the office currently under construction (in Burnaby).” Without consent by the council, it may not “have more than 200 related licensees … 15 teams … and more than 12 licensees on any team.”

Until now, the spotlight on aggressive training practices, as well as shadow flipping and taking of commissions, among other things, has been focused on New Coast Realty, which has been under intense public scrutiny and official investigation. The new details reveal the council’s interest is beyond just one firm.

“Restrictions are imposed in advance of a public hearing when the council thinks the public might be at risk, so they are a very serious thing and there is reason to be concerned,” said David Eby, NDP housing critic.

“The entire industry has known about these,” said Lawrence Jin, president and owner of Metro Edge Realty, which has offices in Vancouver, Richmond and Surrey. “They are not new.”

Jin said that the conditions were placed after the ones imposed on New Coast Realty in April because the council was concerned “many agents from New Coast were moving to Metro Edge and (another Vancouver-area firm) Nu Stream and they were afraid that there would be the (same) conduct or the same behaviour.”

Wells Peng, an owner of Nu Stream, did not reply to a message left on his cellphone. 

Metro Edge and Nu Stream are thought to have been set up around 2014, and staffed by agents who used to be affiliated for and/or work for New Coast Realty.

In April, the council issued a list of seven license conditions on New Coast “to ensure that the business complies with provincial laws for real estate brokerages” and also said it was actively investigating the company.

Changes this month to the council’s website also allow the public to search and see the nearly 20 conditions placed on the license of Metro Edge realtor Wendy Yang, including one that forbids her from referring any clients to or providing “contact information for (her husband and RBC Royal Bank of Canada mortgage adviser) Jian Robert Sun for the purpose of obtaining financing or mortgage advice or services.”

Yang was a top-producing agent and, in 2014, qualified for the Real Estate Board of Greater Vancouver’s Medallion club, which selects members from the top 10 per cent of its agents.

Yang has been ordered to remain under the direct supervision of Metro Edge’s managing broker, to whom she will file quarterly reports about her team’s transactions. She may not sign “any documents on behalf of her clients, either in her own name or in the name of her clients.”

© 2016 Postmedia Network Inc.

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Millenium development creates feeling of ?high-end Parisian and New York residences?

Mary Frances Hill
The Province

Project: Triomphe

Where: Gilmore Avenue and Halifax Street, Burnaby

What: 340 homes, one — three bedrooms (including three townhomes) in North Burnaby

Residence sizes and prices: 482 – 2,138 square feet, from the $370,000 range

Developer and builder: Millennium Development Group

Sales centre: Unit B — 4247 Lougheed Highway, Burnaby

Hours: noon — 5 p.m., Sat — Thurs

For some time, the Brentwood neighbourhood has enjoyed the spotlight as Burnaby’s hub of condo development, with communities of towers in mid-construction next to the SkyTrain station and transit hubs. With Triomphe now one of the newer offerings vying for homebuyers’ interest in the area, Millennium Development Group needed to stand out from the pack.

To that end, designer Pedram Noor turned up the luxury in the homes and, with Mitchell Freedland Design, added a sense of cosmopolitan, European flair in the homes and throughout the building.

“Luxury living was our goal,” says Noor, Millennium’s in-house designer. “We wanted a feeling of high-end Parisian and New York residences.”
Triomphe is being marketed as the most reasonable luxury option in North Burnaby, with homes considerably less expensive than similar properties in Vancouver.

Noor chalks up that luxurious vibe to features such as large terraces, high ceilings and respected brands in appliances and fixtures, including Grohe, Blomberg and Bosch.

Noor touts the floor plan in the one-bedroom homes, which provides what he calls a “strategically placed wall for art and TV placement.” The the two-bedroom-and-den plan, meanwhile, is large enough to be adaptable, and easy to expand.

“[It] offers buyers the ability to customize their new home with the option of an extra room or larger living space. This is a groundbreaking new idea that has delighted our buyers,” he says.

In a living room, Millennium sticks to muted shades in colour, and allows a large piece of artwork to take centre stage.

“We’ve got very well thought-out floor plans that are super efficient and functional, and balconies of more than 1,000 square feet in the larger homes — and that is very unusual,” he says.

“Large statement pieces, elegant antiques mixed with modern and contemporary pieces once again show our buyers how personalized they can make their new homes.”

The dining room’s unique globe-like pendant lighting is no doubt one of Millennium’s “statement pieces” in this open-concept space.

In the kitchen, Noor places white upper cabinetry against a dark backsplash and adjacent to dark-panelled refrigerator for a high-end look one would only associate with more expensive homes.

Strategic lighting and mirrors balance out the dark tile and add a sense of mystery to a spa-like bathroom. This room spares nothing in terms of drama with a floating vanity and an in-your-face, wraparound marble-look tile that creates the effect of a cocoon.

Sensual luxury was the goal, says Noor.

“The bathrooms are designed to feel like personal spaces you would want to linger in.”

© 2016 Postmedia Network Inc

REP

The Canadian Real Estate Association is forecasting national home sales this year will be slightly higher than its previous estimates, with increased expectations for Ontario offsetting a decline for British Columbia.

The association says the number of sales this year is expected to rise 6.2 per cent to 536,700 units compared with an earlier forecast for a 6.0 per cent increase.

Sales next year are expected to be 518,900 units, a drop of 3.3 per cent compared with the revised forecast for 2016.

The association released its updated outlook as it reported home sales through its Multiple Listing Service fell 5.3 per cent between October and November, the largest month-to-month decline since August 2012.

Compared with a year ago, sales volume in November was up 1.6 per cent.

The national average price for a home sold in November was up 7.3 per cent from a year ago at $489,591. Excluding Greater Vancouver and Greater Toronto, the average price was $361,260.

Copyright © 2016 Key Media Pty Ltd

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Toronto now No. 1 market for commercial financing, CBRE Canada says in report

EVAN DUGGAN
The Vancouver Sun

The appetite to finance Canadian commercial real estate remains high among lenders, but that eagerness to lend is retreating in Metro Vancouver as it makes gains in Toronto, according to a new report by CBRE Canada.

Toronto has emerged as the most desirable market for lenders in 2017, with 84 per cent of surveyed lenders reporting a strong appetite to lend toward Toronto commercial real estate assets next year, according to the 2016 Canadian Real Estate Lenders’ Report.

Respondents included domestic and foreign banks, credit unions, private lenders and pension funds.

Vancouver remains Canada’s second top draw for commercial financing nationally, but the percentage of lenders with a strong desire to lend toward Metro Vancouver projects next year fell to 68 per cent. Last year, 80 per cent of lenders had a strong desire to lend in Metro Vancouver.

Meanwhile, industrial was the only asset class to record a yearover-year increase in budget intentions by lenders nationally, with lenders dropping their willingness to become exposed in the highrise condo sector and suburban office market.

“We have had an unprecedented level of interest of both debt and equity capital to invest in Canadian commercial real estate assets, and 2016 is expected to break the investment volume record of $32.1 billion set back in 2007,” said Carmin Di Fiore, executive vice-president of CBRE’s debt and structured finance group.

“The financing climate has been highly supportive of this recordbreaking environment and, with 58 per cent of lenders looking to expand their asset allocation to commercial real estate in 2017, lenders are poised to support another robust year of investment activity,” he said in a media release. Di Fiore was not available for an interview.

He said there has been shift in preference between geographies and asset classes, with lenders increasing their budgets for Toronto and for industrial financing, while pulling back on apartment buildings and retail projects.

“With debt capital flow moderating in Vancouver, and Calgary seeing capital becoming more tightly focused at specific high value opportunities, Toronto stands to be the destination of choice for lenders in 2017,” Di Fiore said, noting that sustainable commercial property values and lenders’ “enthusiasm” is spilling over into the Hamilton and Waterloo regions as well.

“I think capital would love to be in Vancouver, it’s just difficult to find a place to put it,” said Mehdi Shokri, a principal with Avison Young in Vancouver, who focuses on investment properties.

“It’s such a tight market to find opportunity in, especially opportunities of scale to place capital,” he said. “I think if anything, Toronto has become more favourable moreso because there is more opportunity, than (because of ) risk profile. But I’m sure some lenders would argue that residential land here is making them a bit nervous because of the numbers they’re starting to see.”

Shokri said lending rates remain enticingly low for commercial projects, and the increasing apprehension by lenders in Vancouver likely has more to do with extremely high land values, development red-tape, and political issues.

There is indeed more apprehension by lenders to lend into the Metro Vancouver marketplace, said Hani Lammam, executive vice-president with Cressey Development Group.

“I think the reason for that is the recent turbulence and uncertainty in our marketplace,” he said in an interview. “There’s a concern about overvaluation considering the investment climate, and I think the investment climate has been negatively impacted by recent government actions — the foreign buyers tax.”

Cressey currently has nine developments underway in the Metro Vancouver region, and develops all types of assets, including residential, office and industrial.

“That kind of policy, that kind of a tax, basically says that this is not a free market anymore, and when you do that, I think it sends a negative message. It basically limits the investor pool and when you have less demand, you could have a softening of values,” he said.

He said the remarkable rise in land values in the region may also be giving institutional lenders pause. “There’s just less cushion for the bank,” he said. “It’s all about risk management for the bank.”

Prices and rents in the industrial market have remained strong, and have been more predictable than residential properties, perhaps explaining lenders’ increasing appetite to finance industrial deals, Lammam said, noting that the well-documented shortage of industrial space in the region continues.

“You don’t see industrial rents move dramatically, you don’t see cap rates shift dramatically,” he said. “It’s a pretty stable market.”

As for the increased interest in Toronto, Lammam said most lenders are based there. “That is going to be their focus undoubtedly,” he said. “We’re kind of the hinterland. They don’t understand our market. They look at it and say it’s insane, what’s happening?”

© 2017 Postmedia Network Inc

James Tarmy
Canadian Real Estate Wealth

In the late 1960s, the architect Luis Barragán was commissioned to create an equestrian compound in Mexico City with stables, a four-bedroom main house, riding paddocks, and a shallow pool for horses to refresh themselves. 

It was in the latter part of Barragán’s celebrated career (he later won a coveted Pritzker Prize), and the property, called Cuadra San Cristóbal, was adjacent to the exclusive equestrian French Club.

The club is no longer, but the home has been rigorously maintained by the family that commissioned it. Four years ago, they put the property on the market (its current price is $13 million), at which point they were forced to reckon with a conundrum faced by owners of architecturally significant houses around the world: A historically significant architectural pedigree can be a burden, not just a selling point.

Neighborhoods Change; Houses Remain the Same

Thirty years after Cuadra San Cristóbal was built, the equestrian club is gone, and the neighborhood, once upscale, has gone downmarket. “Many of the lots have been fractionated,” said Federica Zanco, the director of the Swiss-based Barragán Foundation. “There are many small-scale houses that are not particularly elegant, and not particularly well kept.” 

The owners of Cuadra San Cristóbal opposed the development of structures that would somehow diminish the value of the estate and did their utmost to remain faithful to what Zanco called “one of the masterpieces” of Barragán’s life. “They of course are very aware of the importance of their building,” she said. “And they fought hard not to allow some offensive construction in the vicinity, but of course, how long can that go on?” she asked rhetorically. “They want to sell the house, and at a certain moment they have to let go.”

They haven’t yet. “We’ve had some offers, but they don’t want to sell [the house] short,” said Jeronimo Quiroz, the broker representing the property. “There are developers who would love to buy it to tear it down, or turn it into a club house or something like that.” The sellers won’t accept those options and are stuck trying to hawk a fancy house in a decidedly unfancy neighborhood.

Potential buyers face a daunting financial calculus: They’d be paying a vast sum (in any city) for a home without the typical services associated with that kind of price. “Really wealthy people in Mexico City tend to cluster around certain areas,” Zanco said. “There are security concerns, and so forth.”

That means a buyer who’s willing to preserve the home probably won’t want to live there. The buyer might be an institution, or it could be a “pool of investors,” Zanco suggested. “It’s worth it, for a wealthy class of Mexicans who are concerned about their cultural future.”

When Maintenance Costs More Than The Purchase Price

Often, the more historic a home, the more problematic its upkeep. In the case of the massive Château d’Aubiry, a 16,000-square-foot, 22-room castle in the south of France that has an greenhouse built by Gustave Eiffel (designer of the Eiffel tower), “every meter you’ll find a new painting, or sculpture, or design,” said Anthony Diaz, the broker representing the home. “It’s not just a castle; it’s an historic monument.” (Indeed, it is listed as such by the French government.)

But all that decoration requires immense amounts of restoration and upkeep and even larger sums of money to do it. The castle is currently on sale for €12.6 million ($13.6 million). And when the owners who put in all that cash want to sell it, they need to do it at a high price to make themselves whole.

Located just a few minutes from the Spanish border, the castle was built in 1903 by the French industrialist Pierre Bardou-Job, who made most of his fortune by selling JOB rolling papers for cigarettes. (“Do you smoke?” asked Diaz. “Well if you did, you’d know his brand.”)

The castle has its own theater, formal dining room, billiard room, and library, and the grounds include a chapel, formal gardens, and a swimming pool.. “Everyone is interested,” said Diaz. “But who can buy it? Only someone who’s very, very rich.” 

Livability

In 1960, Frank Lloyd Wright built a glassy, 2,600-square-foot home on a little less than four acres in suburban Minneapolis. The house, which is set on a quiet cul-de-sac, has a dramatic, sweeping roof, a grand vaulted main room, and a series of built-in features that are Wright’s trademarks. The same family has lived in the house for more than 50 years. Now they’ve put it on the market for $1.395 million.

Because of its unbroken stretch of ownership, most of the house’s features have been preserved, which is both a blessing and a curse. “Works by Wright are like living sculptures,” said Barry Berg, the broker who’s co-listing the property. “What was ahead of the curve back then is inevitably—think kitchens or baths—not going to be as expansive or generously appointed as your typical suburban tract home or a mansion that gets built today.”

Buyers of the home, then, might have to make some sacrifices (“sacrifice” being a relative term for having to use a sleek albeit not wildly spacious midcentury bathroom) or risk upsetting preservationists by altering the home’s original layout. “There’s a little bit of a disconnect,” Berg said, “where someone might think: ‘Is this where I really want to live?”

Countless architecturally significant homes have found buyers whose answers have been a resounding “Yes.” Berg himself has sold a Wright home before (“it took about two weeks to sell, but we had the right buyer,” he said), and there’s been a spate of high-profile home sales in recent months.

Countless architecturally significant homes have found buyers whose answers have been a resounding “Yes.” Berg himself has sold a Wright home before (“it took about two weeks to sell, but we had the right buyer,” he said), and there’s been a spate of high-profile home sales in recent months.

Copyright © 2016 Key Media Pty Ltd