Luxury Vancouver building prefers long-term lease buyers, but would consider monthly rental
Joanne Lee-Young
The Vancouver Sun
Developer Stanley Dee is marketing a visibly empty, super-high-end property in Vancouver’s West End.
Acting on behalf of the owners, he had been trying to figure out how to adapt to the cooling of the city’s once hot luxury real estate market, and now, with the pandemic, might shift gears again.
Recently, Dee says, he has been getting a burst of interest in the building for short-term, monthly rentals. Wealthy Canadians accustomed to going abroad by private jet are attracted to B.C.’s relative success in managing the pandemic and are considering the units as the ultimate vacation-in-Canada rental, said Dee.
The building’s dramatic, floor-to-ceiling windows face Beach Avenue at 1460 Bute St. Passersby along the part of the seawall that connects the Burrard Bridge to English Bay can peer up at the handful of units in the four-storey building. Two of them are 1,400 square feet each and there is a 3,000-square-foot, two-level penthouse with a 1,100-square-foot rooftop.
The units aren’t technically empty since they have caretakers who live in the units while paying a small amount of rent.
But since last summer, Dee been seeking high-paying residents befitting the combined $12.3 million assessed value of the units
A promotional email said all the units in the building are available together starting at $60,000 a month, with a single, smaller unit starting at $8,500. But Dee didn’t confirm these, only willing to say it would depend on the terms, whether someone wanted single or multiple units and the length of the rental period.
For him, there’s an opportunity cost in taking on short-term tenants because he might miss the original goal of finding someone willing to lease all three units for 30 years. Dee prefers to lease the entire building to a single group, such as a film studio, tech company, professional sports team or an international billionaire, for between 20 and 30 years.
But he knows prospects are less likely in an era of COVID-19 travel restrictions and less certain budgets.
Filling the building has been a challenge from the start, since the units have never been offered for conventional freehold strata sale. Instead, they are available as leasehold properties where the owners keep ownership, but are essentially paid the rent upfront.
“There has always been a high propensity for investment money or secured money to be in Vancouver,” said Dee.
He founded Deecorp to develop the property for the owners, a family that bought the land in 2011 for its location and wants to hold it for future generations rather than sell it.
“The (object) is just to get an income stream, as much as possible, and to re-address things in about 30 years.”
Dee and the owners also thought a 30-year lease arrangement would appeal to wealthy foreign buyers turned off from making purchases by the various property transfer taxes, empty homes taxes and other anti-speculation measures that significantly slowed Vancouver’s luxury market, just as the building was completed in 2018.
Property leases under 30 years are exempt from the province’s property transfer tax of 20 per cent for foreign buyers.
Dee has not been willing to make public an asking price for those leases, except to say leasehold properties are generally about half the market value of a freehold strata property, and he would likely ask for above that because of the building’s unobstructed views of English Bay, its limited number of units and expensive furnishings.
© 2020 The Province
