Residential and office complex will become city?s third-tallest building

? SCOTT NEUFELD
The Vancouver Sun

Work is underway on Vancouver’s latest multi-tower office and residential project on Burrard Street, which will add nearly 250,000 square feet of office space to the downtown market that has maintained a low vacancy rate, surprising experts amid a rush of new office projects over the past two years.

Burrard Place is set to eventually become a four-tower complex set around Burrard, Hornby and Drake streets. It will include two mixed-use residential and office buildings; a 13-storey rental office building that will also include a multi-level Toyota dealership; and a fourth 25-storey rental apartment building at Hornby and Davie streets that is now in the rezoning phase. 

The $500-million complex is being co-developed by Pattison Group and Reliance Properties Ltd, and will include a total of 250,000 square feet of strata and leasable office space, said Jon Stovell, the president of Reliance Properties.

In all, the four towers would add about 1.1 million sq. ft. of residential and commercial space to the neighbourhood, Stovell said.

“Most of what is going up right now — whether it’s Credit Suisse’s (Exchange tower) or the MNP Tower, or the new tower by Morguard at 601 Hastings — pretty much all of them are dedicated office buildings,” he said.

Stovell said Burrard Place will become a mixed-use complex with hundreds of workspaces, homes and various amenities enjoyed by the owners and tenants that could help to transform that section of downtown.

“It’s a complex. It’s a whole block of the city as opposed to just a building on its own,” he said. “It’s integration that we’re seeing.”

Ground broke on One Burrard Place in May 2016. The tower will climb to 54 storeys, making it the third tallest in the city after Shangri-La and Trump Tower. The footings for that building are now being excavated with a building completion date expected in 2020. The tower will include three storeys of strata office space, about 400 condos and rental apartments, 30,000 sq. ft. of amenities, and street-level retail.

Stovell said the strata office component is already sold out, fetching about $1,300 per square foot across 45 units.

Meanwhile, the 13-storey office tower is set to begin construction in April and will include about 200,000 sq. ft. of rental offices and a Toyota car dealership housed in five storeys below ground and three storeys above grade. That building is expected to complete in mid-2019.

Two Burrard Place, a mixed-use residential, office and retail building will come later, followed by Three Burrard Place, a 25-storey rental apartment building, which is in the rezoning process now.

The work begins as the area’s office vacancy rate creeps down. Many market observers and stakeholders had expected downtown Vancouver’s office vacancy rate to shoot up to 12 per cent or higher by now, kicked wide open by more than 2.2 million sq. ft. of new office space that has opened over the last two years.

But the vacancy rate has actually declined over the past 12 months, and is now at about 7.8 per cent, according to Avison Young’s mid-2016 Metro Vancouver Office Market Report.

The most recent office projects to join the fold are: Serracan Properties’ FiveTen Seymour, which was almost entirely leased in advance of its completion, and Century Group’s Ormidale — also entirely pre-leased by Regus for its new co-working project called Spaces. One outlier in the downtown market has been the 31-storey Exchange building by Credit Suisse/SwissReal Group, which is set to complete this year but is only 10 per cent pre-leased by National Bank.

Reliance hired Colliers International to find tenants for the tower containing the car dealership and rental offices.

“We put some preliminary feelers out with some large professional services firms, just trying to test the waters and see what kind of reaction we’d get for the location,” said Maury Dubuque, Colliers’ managing director in Vancouver. He said the leasing process for that building has just begun. “It’s been overwhelmingly positive.”

He agreed that the overall office market downtown has defied expectations, given all the new and proposed builds.

“A year ago, it would have been my prediction that by the end of the year it would be somewhere around 12 per cent [vacancy]. No question. Were we surprised? Sure,” he said. “There’s a lot of excitement about the next development cycle and I think there will be strong demand for it.”

Dubuque said Burrard Place would likely tap into demand being led by a mix of small to mid-sized professional services firms and architects, engineers and tech companies.

“A huge amount of that demand is coming from the tech sector,” Stovell said. “We had a building downtown that just came up — a full building, and we had numerous offers from tech tenants for the full building within days of it going on the market.”

He said Burrard Place could end up attracting tenants from nearby locations. “There’s a whole suite of tech tenants in Yaletown and they’re initially attracted to that stick and brick, which we love and have a lot of in Gastown, but they eventually realize [those spaces] are inefficient,” he said. “They’re on two floors, or three floors and then they start to move into more modern spaces.”

He said there could also be a migration downtown to fill the new buildings from across the bridges on West Broadway.

“We expect to be some resettlement from Broadway as people decide to wait out the construction of the Broadway SkyTrain line,” he said, noting there could be a lot of disruption there if that line goes ahead as planned.

Ultimately, landlords who have been flexible on their asking rents have not had a problem attracting new tenants to these new offices, Stovell said.

© 2010-2017 Postmedia Network Inc.

Ephraim Vecina
Canadian Real Estate Wealth

The Chinese government’s new, stricter rules on money exchange may have a domino effect on the foreigner-dependent Canadian housing sector.

Beginning this month, mainland authorities will now be requiring documents providing details on the reasons for yuan conversion, and when the money will be used. Improper use of the converted funds (e.g. the purchase of a residential property) will entail stiff penalties such as being banned from exchanging money for a significant duration, The Globe and Mail reported.

The stricter guidelines represent the culmination of Chinese authorities’ months-long effort to moderate the outbound flow of funds, which experts said has massively depleted the government’s foreign reserves over the past few years.

Economist Andy Xie warned that the regulatory revision will lead to a “sharp” decline in housing markets dependent on foreign capital like Canada—a dangerous proposition when one of the nation’s erstwhile hottest cities (Vancouver) has already reached peak sales volume and prices in spring 2016.

However, Real Estate Board of Greater Vancouver president Dan Morrison said that it will still take some time until the effects of this development become apparent.

“There are so many factors in the housing market,” Morrison stated. “Vancouver is not a homogeneous market. Some people want to point to one easy problem or one easy solution, and there is no such thing.”

Copyright © 2017 Key Media Pty Ltd

Three of the four hottest areas for real estate investing this year could be outside of Metro Vancouver

Frank O’Brien
REW

With the Metro Vancouver market seemingly on a corrective course in 2017, where should would-be condo investors turn for reliable rental incomes and solid returns? Real estate investment expert Frank O’Brien, editor of Western Investor, spoke to REW.ca editor Joannah Connolly on the weekly Real Estate Therapist radio show to identify hot investment neighbourhoods for 2017. Here are his four picks.

 

Grandview-Woodlands, East Vancouver

“Most of my gloomier predictions related to Vancouver neighbourhoods, but my Metro Vancouver pick to invest in is East Vancouver, and Grandview-Woodlands in particular. I know that might go against the grain because of what’s happening in the market in general, but in East Vancouver you can still buy condos that are much cheaper than the West Side. Also a lot of immigration is settling in East Vancouver, you’ve got the new St Paul’s Hospital and the Emily Carr campus coming in, plus a lot of high-tech companies settling there, and in Mount Pleasant. That whole False Creek Flats area is really hot, and the transit connections are good. In all of Metro Vancouver, East Vancouver is the best bet right now if you’re buying for rental income and long-term appreciation.”

Victoria

“Victoria has excellent potential right now. There’s no foreign buyer tax and we have a very low Canadian dollar – we’re talking about US buyers here. It’s emerging as a high-tech hub, with 26,000 people working in technology in the city. In Vancouver, tech company employees can’t afford housing, and companies don’t want to relocate to places like eastern Fraser Valley as it’s too far from the ocean and the urban niche. Victoria has the ocean, it has a great climate and scenery, it has great recreation – it’s becoming a very cool place to live. And the prices are just one-third what they are in Vancouver. The biggest population increase at the moment is people under the age of 34, so the previous idea of Victoria being a retirement city is changing big-time. There’s plenty of land in and around the city, and the condominium building boom is just getting going. You can buy a very nice condo for under $250K and the rental vacancy rates and rental prices are about the same as Vancouver. Victoria is an excellent bet.”

Nanaimo

“What’s great about Nanaimo is the oceanfront, and the province as part of their investment in technology incentives, 60 per cent of this is going into Nanaimo to make it a tech centre. You can easily buy view condos in Nanaimo for only $200,000. It’s the only place in BC that you can fly to Vancouver and back affordably, it’s almost a commute, and then there’s the ferry to the mainland. There could even be a new high-speed passenger ferry, but even without that, Nanaimo has big-time potential for investment. The entry-level prices are so low, there’s great infrastructure there, it’s getting a cool and edgy new downtown and it’s close to the ski hills of Mount Washington.”

Toronto

“My god, Toronto. Toronto has always competed with Vancouver to be the number one condo market. But sales for new condos in 2016 are up 73 per cent year over year, whereas in Vancouver they are down 26 per cent. But in downtown Toronto, you can still find an investment condo for under $300,000 in a great location. There’s a pool of renters that is four times the size that of Vancouver, the rental vacancies are as low as Vancouver’s, the rents are about the same but the initial prices are so much lower and there’s so much to choose from. Toronto’s economy is going great, it leads the country in immigration, there’s no foreign buyer tax and it’s so happening right now – it’s more like New York than Vancouver. Toronto has a great future right now and if I was an investor right now I’d be in Toronto – as long as they don’t bring in the foreign buyer tax.”

© 2016 Real Estate Weekly

Ephraim Vecina
Mortgage Broker News

The Canadian housing sector continues to cement its status as one of the pillars of the national economy, following an outlook report that revealed the central role that mortgages are playing in the federal financial system.
 
In a January 9 press release disseminated via Business Wire, the Kroll Bond Rating Agency stated in its 2017 Canadian Banking Outlook report that real estate is helping keep the economy afloat through vibrant activity.
 
“Partially mitigating housing market concern is the high proportion of mortgages insured by the Canada Mortgage and Housing Corporation (CMHC), a Crown corporation, and the generally sound mortgage underwriting practices in Canada, especially relative to the U.S. before the 2008 financial crisis,” the report stated.
 
However, KBRA warned that the sector “remains frothy and is susceptible to negative trends in commodities particularly if these developments translate to higher unemployment over time.”
 
Thankfully, the other major contributors to Canadian economic health should offer a measure of comfort.
 
“[The] Canadian economy is exposed to energy, mining, and other commodities sectors which would likely impact asset quality, particularly if a negative trend in commodity prices is re-established,” the report explained. “Commodity prices have generally rebounded from lows early in 2016 and many banks have already absorbed considerable losses related to direct exposure to commodity and related industries.”
 
Overall, KBRA’s outlook “remains moderately negative for Canadian banks, reflective of the following factors: potential asset quality risks, uncertainties surrounding government support, relatively high levels of household debt in Canada, a sluggish Canadian economy, and vulnerability to any renewed pressure in commodity prices.”

Copyright © 2017 Key Media Pty Ltd

Ephraim Vecina
Mortgage Broker News

Implemented in August 2016, the B.C. government’s 15 per cent tax on foreign buyers has proven crucial in damming the entry of overseas capital into Vancouver, according to a markets observer.
 
Figures from the province’s Finance Ministry showed that the ratio of real estate deals involving foreigners declined to less than 1 per cent after the tax was levied last year.
 
“There is a huge drop,” Andrey Pavlov of the Simon Fraser University told the Vancouver Sun. “There may be some seasonal variation, like there normally would be on all transactions, but the drop is so significant that it couldn’t possibly be explained by seasonal variation.”
 
Many of these would-be buyers have backed out from Vancouver’s luxury segment in particular, Fraser said. Ministry data revealed that only 8 properties worth over $3 million have been bought by overseas nationals in November, a drastic drop from the 95 transactions in July 2016.
 
The total value of Vancouver home purchases in November stood at $295.8 million, a miniscule proportion compared to the $3.5 billion total in the half-year span starting June. Residential property transfers from June to November also fell by 42 per cent.
 
Still, Pavlov noted that it will take a while to gauge the actual impact of the tax.
 
“We’re not going to have apples to apples comparisons until next June.”

Copyright © 2017 Key Media Pty Ltd

Ephraim Vecina
Mortgage Broker News

The recent release of the B.C. government’s latest property assessments revealed that a city on the southern section of the province has become one of the country’s most desirable housing destinations over the last few years.
 
In a January 7 piece for CBC News, markets observer Chris Walker highlighted the gains that the Kelowna market has experienced in a relatively short span of time.
 
“I moved to the Okanagan six years ago to work for the local CBC bureau, and I bought a house in the downtown core. I opened my most recent B.C. Assessment notice to find its value had increased by 16 per cent. It’s the biggest jump in the past five years, which have seen a 30 per cent increase overall,” Walker recounted.
 
This has made the Okanagan one of the regions that can boast of the highest rates of growth.
 
“It’s actually growing twice as fast as the next fastest growing city in B.C., and it’s growing three times as fast as Victoria and Vancouver,” Francois Sergerie of Statistics Canada said last year. 
 
And the main drivers of this growth? Hopeful would-be buyers escaping overheated Vancouver along with the recent demographic shift, in which millennials and young professionals have risen to market prominence.
 
“People coming from Vancouver are mostly under 30 and some of them may be cashing in on Vancouver’s incredible real estate boom,” Walker explained.
 
“For new arrivals who can’t live downtown, outlying communities that retain a rural feel are becoming more attractive,” he added. “Kelowna property values might still have room to grow, especially if people flush with cash continue to move from Vancouver.”

Copyright © 2017 Key Media Pty Ltd

20 condo towers planned for new 48-acre Southgate neighbourhood at Edmonds Station

Kenneth Chan
other

Much of Metro Vancouver’s building boom is not happening within the boundaries of the city of Vancouver, but rather in neighbouring Burnaby. Nowhere is this more evident than with the new ‘Southgate City’ neighbourhood in South Burnaby.

Plans are moving forward to redevelop a massive 51-acre warehouse site, framed by 11th and 14th avenues and 15th and 18th streets, that was formerly Safeway’s distribution centre and a dairy plant.

Safeway’s distribution centre at the site shut down in 2011 after it moved to a new facility in Langley, and the site was acquired by local developer Ledingham McAllister shortly after.

The site is near SkyTrain’s Edmonds Station, approximately three blocks away or a 10-minute walking distance.

A pedestrian-oriented, transit-connected neighbourhood master plan approved by the City of Burnaby in 2015 indicates the development will be built over multiple phases over a 15 to 20 year timeline. When fully complete, there will be up to 20 towers between 24 and 46 storeys in height and a variety of mid- and low-rise buildings. It will contain 5.88 million square feet of market residential floor area and 588,365 square feet of non-market housing floor area for a total of 6,400 residential units housing close to 20,000 people.

“Higher densities are proposed more centrally within the proposed neighbourhood, including the discrete siting of residential towers, and where there is an established relationship to either multi-family or park uses,” reads the master plan.

However, unlike the redevelopment plans for Brentwood Town Centre and Lougheed Town Centre, its commercial uses will be limited with just 200,000 square feet allocated for commercial space. No mall space is planned, but there will be street front retail and other minor retail applications for service-oriented commercial uses, such as restaurants.

Southgate has been planned as a neighbourhood with five distinct areas that revolve around a five-acre central park with extensive water features that will be owned by the municipal government. Smaller parks and open urban spaces will also be built in the surrounding areas to “provide contiguous connections throughout the various neighbourhoods to the surrounding community”.

A new local road network with extensive pedestrian and cycling routes will be built within the site.

“The proposed Southgate neighbourhood provides an opportunity to bring greater cohesion to the Edmonds Town Centre, and more broadly, the City,” the master plan continues. “In view of the broad vision and concepts for the proposed Southgate neighbourhood to connect to the two existing nodes of core development within the Edmonds Town Centre, two connections/linkages have been identified as being necessary to achieve this: a north-south connection from the Southgate site to Kingsway and an east-west connection from the site to Griffths Avenue.”

Each of the four phases of the master plan requires a separate rezoning process. The neighbourhood’s first two towers were approved by City Council in March 2016, and construction is expected to begin later this year.

© 2017 Buzz Connected Media Inc.

The dollar figure on your provincial property assessment notice should not be taken as your home?s true market value

Dustan Woodhouse
REW

BC Assessment notices have arrived in the mail, giving some homeowners a big smile and a bit more spring in their step (increased property taxes aside), while others wilt and lament at a modest gain or decrease in assessed value.

But hold on a sec. Neither this assessment document, nor either parties’ emotions, are tied to a current true market value. In fact, provincial property assessments can be significantly too high or too low. Values are determined in July of the previous year, and properties are rarely visited in person by provincial appraisers.

For this reason, provincial property assessments should never be solely relied upon as any sort of relevant indicator of true market value for the purposes of purchase, sale or financing.

Think of the assessed value instead as something akin to a weather forecast, spanning far larger and more diverse areas than the unique ecosystem that is your neighbourhood, your specific street, or your specific property. A weather forecast made the previous July, not the previous week. As this is when assessed values are locked in, a full six months prior to the notices being mailed out.

The BC Assessment Authority does offer some useful tools for a high-level view of the market. Go to http://evaluebc.bcassessment.ca/ and start typing an address. You’ll get a drop-down window where you can click on the address you want. Here’s what you can find out:

Details on single address: These come up on the first screen and include: current and last year’s assessed value; size and rooms; legal description; sales history, and further details if property is a manufactured home or multi-family building. There’s also an interactive map as well as links to information on neighbouring properties and sample comparative sold properties.

Neighbouring properties: Here you can compare the assessed value of houses in the immediate neighbourhood. Clicking on any property brings up further details.

Sample sold properties: Find comparable properties and see what they sold for and how their sold price compares to their assessed value. This is a great research tool for owners, sellers and buyers.

These tools can be a starting point, but if you’re looking to set a selling price on your own property, always enlist a professional. Valuing your property is not a do-it-yourself project. In a buying/selling transaction, it is best to order an appraisal, which is a much more accurate reflection of current market value. It is timely and reflects value for zoning, renovations and/or other features unique to the property. An appraiser is an educated, licensed, and heavily regulated third party offering an unbiased valuation of the property in question.

What’s My Home Really Worth?

Usually, market value is determined by what a buyer is willing to pay for a home, and what the seller is willing to accept.

A quick survey of recent sales and their relation to assessed values will often demonstrate no clear relationship between sale price and assessed value. It’s often all over the map. Some properties selling well below assessment, and others well above.

You also want an experienced and local REALTOR® to help you determine the selling price of your home. A (busy, local) agent will have a far better handle on what is happening in your area for prices than does a government document, and in many instances will save you from yourself.

In theory, a comprehensive current market review completed by a real estate agent should not differ radically from the value determined by a professional appraiser.

Professional appraisers spend all day every day appraising properties, and their reports are often seen as less biased. Imagine your reaction, as a buyer, to the following statements…

1. The seller says their house is worth $500,000.
2. The sellers’ listing agent says it’s worth $500,000.
3. This house is listed at $500,000 based on a professional (marketing) appraisal.

Most buyers would consider #3 the most reliable of the above statements. And most buyers requiring financing will have the benefit of the lender ordering their own independent appraisal to confirm fair market value. Sellers rarely order an appraisal in advance, which can create some interesting situations.

In practice, agents are relied upon for listing price estimates. Most buyers don’t care much about what anybody else thinks the house is worth. Buyers care what they think it is worth. This is why we say that market value is ultimately determined by what a buyer is willing to pay for the home, aligned with what is acceptable to the seller.

The Two Kinds of Appraisals

It is important to note that there are two kinds of professional appraisals. There is the marketing appraisal, such as one ordered by a seller. And there is the financing appraisal, which is done so the bank is satisfied the house is worth what the buyer and seller have agreed it’s worth. The financing appraisal is a less in depth review and more a matter of answering the question: Is this property worth the agreed-upon purchase/sale price?

A marketing appraisal goes deeper (and costs more), but a lender is not concerned with the actual market value over and above the purchase/sale price. A lender just wants the simple question answered. It is a rare day that the appraisal for financing has a value that differs significantly, if it all, from the sale price. Therefore one should not be surprised if, when buying a home, they find that the appraisal comes in bang on at the purchase price. As they do 99 per cent of the time. The one per cent of the time that the value is off, it is almost always a private transaction where the seller has had no professional guidance at all and has inadvertently set their price below market, by relying on something as inaccurate as their BC Assessment document.

In summary, rather than relying on your out-of-date BC Assessment for your home’s value, you should gather professional opinions from real estate agent(s) and an appraiser – these are the people with their feet on the ground and their heads in the game.

© 2016 Real Estate Weekly

The Vancouver Sun

It’s still the dead of winter in much of Canada, but in Victoria daffodils and crocuses are about to begin sprouting, marking the unofficial signal to start another real estate season for anxious home buyers and sellers.

The Victoria Real Estate Board says a repeat of last year’s record-smashing property sales that saw constant bidding wars on southern Vancouver Island is not in the forecast for 2017. But prices are expected to continue rising amid a market of too few available homes.

Expectations that foreign buyers would flock to Victoria to avoid the 15-per-cent Metro Vancouver home tax has not happened, instead purchasers are arriving from other areas of the country, outgoing Victoria real estate board chief Mike Nugent said Monday.

“There’s certainly no evidence so far of showing a big shift of foreign buyers to Victoria,” he said. “As soon as it was implemented everybody phoned and said, ‘what are the numbers like? You must be getting an avalanche.”‘

Government data shows there were 90 deals involving foreign buyers in Victoria between June 10 and Aug. 1, before the tax was implemented. In the latest numbers, Nov. 1 to Nov. 30, there were 39 property transfers involving foreign buyers.

The percentage of property transfers involving foreign buyers in Victoria went from 3.9 per cent in June to August, before the tax, to 4.6 per cent in November.

In the Vancouver area, there was a steep drop in real estate transactions after the tax took effect.

The data reveals the number of property transfers in Metro Vancouver went from a high of 1,974 just prior to the introduction of the foreign buyers tax to a low of 60 in the weeks after the tax. The number started to move upwards last November, hitting 204 property transfers involving foreign nationals.

The Real Estate Board of Greater Vancouver reported a roller-coaster year in 2016, with record sales in the spring, but ending the year with a 5.6-per-cent drop compared with 2015.

Nugent said while Vancouver has had dropping prices, in part due to the foreign buyers tax, Victoria real estate values are expected to continue slowly moving upwards.

“In Victoria, because we’ve got so few places available — all our projects are sold out — and because of the shortage of inventory even though sales will be less, we expect prices to continue to keep inching up,” said Nugent. “There’s more buyer demand than we can supply right now.”

People are looking for a lifestyle change when they move to the Victoria area and it’s producing a migration from Metro Vancouver and from right across the country, he said.

Baby boomers from Vancouver are selling their homes for large pay outs and moving to Victoria, where they can buy a similar or larger home for less money, Nugent said. He said the Victoria area is also seeing people move for economic opportunities.

“Our economy is one of the best in the country right now,” said Nugent. “We’ve got lots of jobs happening in all sectors. That’s attracting everybody.”

Nugent said the real estate board does not have the final numbers tracking where people are coming from when they move to Victoria, but preliminary results places about 65 per cent of the buyers from Vancouver Island and about nine per cent from the Vancouver area.

B.C.’s most recent in-migration and population numbers released Dec. 16 by BC Stats, which tracks provincial trends, estimated the province’s population at 4.7 million. This is an increase of almost 22,000 people in the third quarter of 2016.

© 2017 Postmedia Network Inc.