Gastown mixed-use with retail and nine micro-suites sells for $2.1 million

Corbel Commercial Inc.
Western Investor

Coquitlam industrial site sells $2.5 million over assessed value

NAI Commercial
Western Investor

The 1.88-acre developed site on United Boulevard near Highway 1 sold for $13.25 million.

— NAI Commercial, Vancouver, for Western Investor

Property type: Industrial

Location: 2441 United Boulevard, Coquitlam, B.C.

Size of property: 34,698 square feet

Size of land: 1.88 acres

BC Assessment value (2021): $10.73 million

Sale price: $13.25 million

Date of sale: April 21, 2021

Brokerage: NAI Commercial, Vancouver

Broker: Doug O’Neil

 

© Copyright 2020 Western Investor 

Vancouver region breaks home sales record in April a year after pandemic shut down market

Sean MacKay
Livabl

 While the pandemic sent the economy reeling last March, the extent of the impact on the housing market wasn’t evident until April 2020 sales activity numbers were released.

For the Vancouver region, the figures looked pretty scary. Home sales fell nearly 40 percent annually and 56 percent on a monthly basis in April.

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But now, a year after the first full month of the pandemic-induced home sales freeze, the Vancouver region housing market is continuing its historic run of record-breaking sales activity.

Last month, the Real Estate Board of Greater Vancouver (REBGV) recorded 4,908 transactions, a remarkable 342.6 percent increase from their depressed April 2020 total. That figure represents an all-time high for the month and came in 56.2 percent above the 10-year average for April.

The big story from the new data published this week by REBGV wasn’t just the ongoing sales surge, it also marked another strong month for the supply side of the market. There were 7,938 homes newly listed for sale in the Vancouver region in April, up 243.2 percent compared to a year ago and the highest ever recorded for the month.

“Our housing market has changed considerably from one year ago when COVID-19 concerns brought activity to a near standstill,” said REBGV Economist Keith Stewart.

“This was followed by a well-documented spike in home buyer demand across the region. So far this spring, we’ve seen a corresponding supply response from home sellers. While homes are now being listed at record levels, more supply is needed to meet today’s demand and help market conditions achieve greater balance,” he continued.

Based on the sales-to-active listings ratios for each property type tracked by REBGV, all property types remained deep in seller’s market territory in April despite the record increase in supply.

On the pricing front, the MLS Home Price Index for the Vancouver region rose by 12 percent annually to $1,152,600 last month.

Despite homebuyers scooping up a record-breaking number of properties in April, the total for the month represents a noteworthy sales decline from March, when 5,703 homes were sold. Anticipating that April wouldn’t soar to the heights seen in March, Vancouver broker Kevin Skipworth wrote earlier in the month that “the volume has come down a little on Greater Vancouver’s real estate market.”

 

© 2020 BuzzBuzzHome Corp.

Developers get creative as industrial land disappears

Frank O’Brien
Western Investor

Developing in peat bogs and over landfills, sweetening zoning bids and paying record-setting prices for shovel-ready sites continues to pay off

 — The 170-acre Richmond Industrial Centre being developed on a former landfill site. | WI files

As the industrial land base in Metro Vancouver vanishes beneath concrete and asphalt, developers are throwing a wide net in their search for more space to meet intense demand that has driven industrial lease rates to the highest level in Canada.

One $300 million major project is rising above a Richmond landfill, another is bucking protest as it forges ahead with plans for 163 acres in a Delta peat bog while multiple bids are driving up land values from Vancouver to the eastern edge of the Fraser Valley.

Prices for brown site industrial lands, being bought for speculative development, have reached incredible levels. 

In November 2020, developer Wesbild paid more than $12 million per acre for the former Sen Western Wholesale Lumber site on Manitoba Street in southwest Vancouver. The $59.9 million transaction was the biggest industrial land sale in the past 12 months, according to Avison Young, but it was not the only Vancouver deal with eye-popping prices.

PC Urban, an active industrial developer, paid $17.8 million for the  2.4-acre Pacific Metals Recycling site on Ontario Street and $15 million for two acres of industrial on Kent Avenue North in Vancouver.

“The shortage of industrial space available for lease combined with a near record-low cost of capital have driven many owner-occupiers and investors to heavily invest in B.C. industrial properties,” according to Avison Young’s Metro Vancouver Industrial Overview, released May 3.

The report found that industrial asset sales totalled more than $1.5 billion in 2020 (on assets valued at more than $5 million) and hit $575 million in the first three months of 2021 alone.

According to the Metro Vancouver 2020 Regional Industrial Lands Inventory, 82 per cent of the 28,422 acres of industrial land that was available five years ago has now been developed.  Since 2016, industrial development has averaged more than three million square feet a year, and that pace accelerated to 4.4 million square feet annually in the past two years.

Right now, there is approximately 4.1 million square feet of new industrial space under construction and a further 18.5 million square feet planned.

The overall industrial vacancy rate in Metro Vancouver, however, is 0.9 per cent, and it drops even lower in traditional powerhouse markets like Surrey, Richmond and Burnaby

As Avison Young noted, three current developments in Metro Vancouver highlight the perseverance of industrial developers trying to keep in the game. These are:

• Xchange Business Park, in Abbotsford, which entails 140 acres, will deliver 1.2 million square feet in its first phase of speculative construction. It required significant investment from developers QuadReal Property Group and Hungerford Properties in transportation infrastructure to improve access to the site. The developers will also transfer 28 acres to the City of Abbotsford for use as parkland as well as donate an additional 23 acres of riparian areas while also maintaining wildlife corridors running north and south through the property.

• Beedie, the largest industrial developer in B.C., plans to turn the former Pineland Peat site, a 163-acre property in Delta, into an industrial park. The bid remains in the approval process involving a substantial number of government stakeholders and will require the redevelopment of a highway interchange and several other transportation infrastructure improvements in the area.  The peat bog development has raised protests from local environmentalists.

• In Richmond, a 170-acre site that was once used for construction waste landfill is being converted into a $300 million industrial park by Montrose Property Holdings. The resulting Richmond Industrial Centre will include 12 to14 buildings ranging from 100,000 square feet to 500,000 square feet when completed. The first building opened in September 2020.

In Chilliwack, 2.5 acres of industrial land sold March 31 for $5.5 million, considered a record high per-acre price in the municipality, according to broker Dmytro Chernysh of Klein Group-Royal Lepage.

Despite the rapid pace of construction, spec developers apparently have no trouble finding buyers or tenants.  According to Avison Young 82 per cent of the 1.8 million square feet of industrial space that will complete in the next six months has already been either leased or sold as strata.

 

© Copyright 2020 Western Investor

Is a housing crash really coming in Canada?

Ephraim Vecina
Mortgage Broker News

 

The much-feared housing crash is not likely to happen any time soon considering the market’s strong fundamentals, according to veteran industry observers Murtaza Haider and Stephen Moranis.

Writing for the Financial Post, Haider and Moranis said that even a cursory view of the current Canadian housing market would reveal a financially robust consumer base and an overall low incidence of mortgage delinquencies.

“Housing markets in Canada have defied all predictions of doom and gloom since the onset of the pandemic,” the duo wrote. “Unlike the United States, where subprime mortgages were at the heart of the financial meltdown in 2008, recent Canadian homebuyers are financially strong and stable.”

Citing recent data from Mortgage Professionals Canada, Haider and Moranis argued that the miniscule 0.22% mortgage arrears rate “suggests that the government’s stimulus programs are working in protecting financially vulnerable households.”

Read more: CMHC: Mortgage delinquency rates fell in most cities in Q4 2020

“Mortgage delinquencies continue to be very low in Canada, and that’s good news,” the analysts said. “Strict adherence to robust lending standards and smart homebuyers who do not overextend themselves are critical for the health and vibrancy of housing markets in Canada.”

Existing trends might also be a prelude to pre-pandemic levels of activity in the upcoming summer season, Haider and Moranis noted.

Read more: CREA: National home sales in March powered through all previous records

“Brokerages are already reporting a decline in showings and real estate professionals have observed the average sale-to-list-price ratio moderating,” the duo said. “Housing markets in Canada are inherently tied to the availability of inexpensive credit, with most homebuyers borrowing funds to make their purchases. The liquidity of mortgage markets and the creditworthiness of existing and future borrowers, among other factors, directly influence the health and robustness of housing markets.”

 

Copyright © 2021 Key Media

DLC announces full-year results

Ephraim Vecina
Mortgage Broker News

 Dominion Lending Centres has announced robust financial results for the quarter and year ending December 31, 2020.

The network posted its strongest performance on record when it comes to funded mortgage volumes, totalling around $17.5 billion during Q4 2020 and approximately $51.5 billion for the whole of the pandemic year. This represented annual growth rates of 46% and 23%, respectively.

Gary Mauris, executive chairman and CEO, said that these increases “drove annual revenue and EBITDA growth of 17% and 30%, respectively.”

“Due to the dedication of our national teams at Dominion Lending Centres, MA, MCC and Newton, the DLC Group was able to successfully navigate a year filled with significant uncertainty caused by the global pandemic,” Mauris said. “The DLC Group will continue building leading mortgage brokerage platforms and connectivity solutions to assist our mortgage professionals in growing their businesses.”

Read more: DLC inks new franchise agreement with Alberta-based brokerage

DLC also saw its revenues reach record highs of $17.5 million for Q4 2020 (up 33% annually) and $52.4 million (up 17%) for the whole of 2020.

The network enjoyed net incomes of $22.6 million for Q4 2020 and $25.6 million for the year ending December 31, 2020. This includes $16.7 million deferred tax recovery “for non-capital losses that are usable against future taxable income,” DLC said.

 

Copyright © 2021 Key Media

Bluebird Self Storage continues growth, buys 5 Alberta sites

Mario Toneguzzi
other

 Reade DeCurtins, Bluebird Self Storage’s co-founder and real estate director. (Courtesy Bluebird Self Storage)

Toronto-based Bluebird Self Storage continues to expand across the country with an aggressive plan to grow its portfolio.

Recently, the company announced it had acquired StoreSmart Self Storage’s five locations in Alberta – Canmore, Cochrane, Edmonton, Red Deer and Sherwood Park – adding 3,000 units comprising 362,000 square feet of space to its portfolio. Bluebird is now the fourth-largest self-storage company in Alberta and seventh-largest in Canada.

Reade DeCurtins, Bluebird Self Storage’s co-founder and real estate director based in Calgary, said the Alberta market is fertile ground for the company’s growth.

“Our footprint is rapidly expanding in Western Canada and we’re bullish by what we see ahead. Storage rates in select Alberta markets match those of other major metropolitan markets in Canada and we are encouraged to see our coast-to-coast acquisition strategy materializing,” DeCurtins told RENX.

“We’re focused to become Canada’s most recognized, premium self-storage brand.

“This transaction in Alberta takes our capital outlay to nearly $200 million since December 2020. Moving aggressively, we are seeking management and acquisition opportunities in British Columbia.”

The growth of Bluebird

The first Bluebird store opened in 2016 in Woodbridge, in the northern part of the Greater Toronto Area. The brand was conceived and developed in 2015.

Today, the company owns 20 locations and third-party manages another five. Properties it owns are located in Ontario, Quebec, Nova Scotia and Alberta. Properties it manages are located in Ontario and Alberta.

There are 16,415 units and 2,105,965 net rentable square feet with properties owned, and 3,622 units and 369,445 net rentable square feet with properties managed by Bluebird.

“With the completion of some upcoming British Columbia deals, we are excited about Bluebird becoming Canada’s first coast-to-coast premium self-storage brand,” said DeCurtins. “Our pipeline has new locations in Alberta (three), B.C. (two), Quebec (one)  and Ontario (two) that are currently in various stages of negotiation and/or due diligence.”

DeCurtins said Bluebird was founded on the principle that everyone deserves a high-value, hassle-free self-storage experience.

“To us, that value includes working with a trustworthy staff, customized amenities and service, and storing your possessions in our convenient and highly secure facilities. While every Bluebird facility is one-of-a-kind, the second you step into any of our locations, you can expect the same great experience,” he said.

Jason Koonin, CEO of Bluebird Storage Management, said the goal now is to get Bluebird back to basics in its initial founding principles of great customer service with a premium experience and premium pricing.

“Really getting back to the core of, ‘What is the brand’ in terms of better quality facilities and a better experience. It’s more a premium positioning for us in the market,” said Koonin.

Self-storage remains strong through pandemic 

Bluebird Self Storage has acquired five former StoreSmart self-storage locations across Alberta. (Courtesy Bluebird)

The self-storage business from a real estate perspective has been quite strong especially in the past year during the pandemic.

“From an investor perspective, I think it’s a return to safety,” said DeCurtins. “We saw the same thing during the recession in the U.S. Self-storage tends to do well in positive economic times as well as in negative economic times. For different reasons, there’s demand.

“What started off as speculation is starting to become reality. A lot of operators and investors are seeing self-storage, the need for self-storage, increasing – like this new norm.

“We think on a go-forward basis with the new norm, demand is going to be even greater. And the fact of the matter is no one has ever been able to accurately predict or tell us what equilibrium will be in any given market with self-storage.

“When I got started in the business 20 years ago, they said when you get to four square feet per person in any given market you’ve kind of reached equilibrium or saturation.

“Several years later the trade shows and the publications are saying it’s five square feet per person and so on. . . . We’ve only got 3.5 square feet per person across Canada.”

It’s the reason for the company’s ambitious plans for growth in Canada.

Where Bluebird wants to buy or build

DeCurtins said Bluebird is not interested in historically overbuilt sites in industrial corridors, parks and along train tracks.

“That’s not the type of location where Bluebird is going to be interested in. We’re interested in retail, high-traffic-corridor types of locations that are very convenient and accessible to our customer base, which is primarily within a five-kilometre radius,” he said.

“Right now, it seems like there’s unlimited runway but our goal is to build a critical mass of premium assets from coast to coast in Canada. And what critical mass means is difficult to pin down.

“I feel like by the end of 2022 we’ll probably have 50 locations under Bluebird flags whether they’re owned or managed. The idea is to continue to grow aggressively but prudently and to build out a critical mass of 50 stores or more in the next five years.”

Koonin said the company will continue to grow in three ways – new development projects, acquisition of existing facilities and third-party management contracts.

“We either build them, buy them or get the contracts for them,” he said.

 

2018 Real Estate News Exchange (RENX)

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11323
The Vancouver Sun

Why one broker isn’t stressing about OSFI proposals

Fergal McAlinden
Mortgage Broker News

 Proposed changes to the stress test rate have caused waves in the Canadian mortgage industry over the past week or so – but one Ontario broker doesn’t see what all the fuss is about.

Nick L’Ecuyer (pictured), president and principal broker at Mortgage Wellness, told Mortgage Broker News that the Office of the Superintendent of Financial Institutions (OSFI) proposals to hike the test level to 5.25%, or two percentage points above the market rate, represent a mild increase – and that they will affect only a small overall percentage of prospective homebuyers.

“The new stress test doesn’t deserve the attention it’s getting because it’s such a small change,” he said. “When the stress test originally came in, it decreased a buyer’s affordability by 20%. This change decreases a buyer’s affordability by less than 5%.

“At the end of the day, it’s a small decrease in affordability; it’s only really going to affect those people that were trying to buy at the top of their budget.”

OSFI made the announcement last week that it intended to raise the stress test level for uninsured mortgages from 4.79%, based on the current average five-year posted rate at Canada’s biggest lenders, as per the B-20 Guidelines.

L’Ecuyer said that he thought the proposed measure had much to do with policymakers seeking to level the playing field between the categories of buyers who can qualify for mortgages at 25-year and 30-year amortizations – and that the wrong type of buyer was being targeted.

“Who identified this category of buyer as being high risk?” he said. “People who have 25% down and work full-time are not high risk. I think that policymakers just identified the difference between a 25- and a 30-year amortization and said, ‘OK, let’s do something about that.’”

There has been some speculation in the mortgage industry that the proposed new measures, mooted to take effect on June 01, will lead to even more madcap activity in the housing market as Canadians look to secure a deal under the current rules before they change. However, L’Ecuyer said that buyers should hold fire on rushing in to purchase before June.

“My advice would be: slow down,” he said. “You don’t have to rush to get into something, because this change is not drastic. It’s a 4% decrease in affordability, so as long as you’re qualified in a prudent manner, and [a broker] didn’t quote you at a ceiling purchase price, you’re probably still good.

“Any good mortgage broker would not quote you at your max – there has to be a little bit of wriggle room in there. So as long as you weren’t quoted your absolute max, you probably should still be fine.”

L’Ecuyer highlighted the important role of mortgage brokers in the current climate, noting that they have a critical part to play in providing the appropriate advice and reassurance for clients who might be unsure about how the proposed changes could impact their plans.

“Anybody that’s looking to purchase with 20% down who hasn’t yet purchased, does need to check in with their broker and see how the changes are going to affect them,” he said. “But the changes shouldn’t have that much impact on them, really.”

Speculation is also rising in the industry about further federal intervention to cool down the currently red-hot Canadian housing market and stave off fears of a potential bubble. However, L’Ecuyer warned that the economy was currently in too precarious a situation to withstand such measures.

 “I think Canadians need stability in this economy with everything happening right now,” he said, “between businesses closing and the provinces shutting down.

“I don’t think any further changes are warranted – we’re just not in a position as an economy to withstand that right now.”

 

Copyright © 2021 Key Media

Can immigration keep the housing market hot?

Fergal McAlinden
Mortgage Broker News

An influx of new immigrants into Canada in the coming years could help the housing market’s trajectory and offset the impact of interest rate rises, according to an industry veteran.

Ron De Silva (pictured), president and CEO, Broker One, told Mortgage Broker News that low interest rates had helped compensate for the lack of new immigrants entering the market since March 2020 due to COVID-19, and that newcomers to Canada would now play an important role in propelling the market when those rates rose.

“During the pandemic, we had non-existent immigration to Canada, but interest rates dropped so low that they sustained the market,” he said. “Now, once we come out of this pandemic we’ll probably have some inflation and the rates will likely go up a little bit – but it might be offset by more immigrants coming back into the fray.

“I think we’re probably looking at a very balanced future in our industry.”

The outbreak of the pandemic saw a dramatic drop-off in the number of newcomers to the country, with the official number of new permanent residents arriving in 2020 – 184,370, according to federal government figures – falling well short of the targeted 341,000.

That shortfall likely had a significant impact on the housing market. The 2016 federal census showed that 39% of immigrants who arrived in Canada during the previous five years owned their homes; those home ownership rates rose to 70% for established immigrants who had spent at least five years living in the country.

The shortfall in new immigrants last year led the federal government to unveil even more ambitious targets for 2021, with minister for immigration Marco Mendicino announcing last October that it planned to welcome 401,000 new permanent residents to the country this year.

De Silva also noted that movement within Canada would help propel the housing market in the near future. “You’re going to have demand in Ontario for sure – and of course, the largest centres attract people,” he said. “Those centres will probably buoy the real estate market because of demand that will continue to grow.”

While a continuation of the current madcap pace of the housing market seems unlikely, De Silva said that the coming years were likely to see “more of a steady flow” with demand settling, more inventory entering the fray, and properties returning to a more reasonable time on the market.

“What we’re seeing right now is around three to seven days [on the market],” he said. “Eventually, you’re probably going to see 45-60 days, which is really a normal market.”

De Silva, who launched Real Mortgage Associates in 2006 and still serves as the company’s principal broker, said that the role of the mortgage broker would always have value regardless of whether the market was up or down.

“I’ll tell you something about brokers: we’re very versatile, and we’re good at survival – no matter what has been thrown at us,” he said. “In October 2016, our world was completely changed [by the introduction of the mortgage stress test]. An outsider might have thought that that would be the end of the broker profession. But look at what’s happened since.

“I think as rates rise, there are things that we will be able to do to make sure that we mitigate any downside risk.”

De Silva said that the controversial Office of the Superintendent of Financial Institutions (OSFI) proposals to hike the mortgage stress test rate in June may prove unnecessary as a measure to cool the housing market, which has already calmed considerably in his eyes.

“I don’t think it’s going to be needed,” he said of the proposed increase. “I think the market itself is settling right now. We may have lower interest rates for the next little while, but I certainly don’t see the craziness that we’ve seen over the last couple of months continuing on.”

 

Copyright © 2021 Key Media