Five-building office portfolio in Yellowknife, NWT, sells for $2.1 million

Avison Young
Western Investor

— Avison Young, Vancouver, for Western Investor

Property type: Office building portfolio

Location: 5004-5018 50^th Avenue, Yellowknife, NWT

Number of buildings: 5

Size of property: 55,879 square feet (combined)

Size of land: 30,171 square feet (total)

Size of land in acres: 0.69 acres (total)

Zoning: DT (Downtown)

Sale price: $2.14 million

Date of sale:February 25, 2021

Brokerage: Avison Young, Vancouver

Brokers: Reed Newnham and James Robertson

 

 

© Copyright 2020 Western Investor

Vaughn Palmer: Finance minister promises 3 times – no cuts to homeowners’ grant

Vaughn Palmer
The Vancouver Sun

 Finance Minister Selina Robinson. Photo by Submitted /Government of B.C.

VICTORIA — Finance Minister Selina Robinson insisted this week that the New Democrats have no plan to reduce the homeowner grant, even as the province takes control of the application process. 

“I can confirm that there is no intent to change the homeowner grant,” she said during debate on legislation switching applications for the grant to the province from local government, effective this year.

She was responding to the Opposition B.C. Liberals, who asked if the New Democrats were taking control of applications as a prelude to reducing the size of the grant or access to it.

“The grant amount will not be changing,” Robinson told Liberal finance critic Mike Bernier during clause-by-clause debate on the enabling legislation.

The finance minister also said the  New Democrats are “committed to” ensuring that “90 per cent of homeowners are eligible for the grant.”

She paid tribute to the historic nature of the grant, a mainstay of tax relief for homeowners since it was created by Premier W.A.C. Bennett in 1957.

“What’s before us is a grant that has existed for decades,” Robinson acknowledged.

Far from regarding the grant as a thing of the past, she says it fits the goals of the NDP housing affordability plan, which she launched as housing minister in the previous term of NDP government.

“The homeowner grant, for sure, is part of affordability,” she said. “Again, this legislation before us is not about changing the grant. It’s just about where it’s going to be administered. There is no intent to change the grant.”

The basic grant is $570 for homeowners in Vancouver, Victoria, their suburbs and the Fraser Valley. Outside those regions, it rises to $770 annually. Plus there’s a $275 top-up for seniors and persons with disabilities.

The eligibility threshold is property assessments of $1.625 million. Above that, partial grants are available.

The grant is not without its critics, some of whom refer to it as HOG — pronounced “hog” of course — to underscore how the grant scoops up such a huge share of provincial revenues. (This year’s drain is estimated at $850 million.)

Three years ago, an NDP-government appointed panel on tax reform disparaged the grant as “a regressive and unfair element of the tax system that could be significantly improved by making it income-tested and extending it to renters.”

Green Leader Sonia Furstenau referred to that recommendation this week in asking if it were “fair to assume that the government is not contemplating restructuring the homeowner grant to make it income-based and more targeted?”

In reply, Robinson reiterated for the third time: “We are not contemplating any changes to the homeowner grant.”

Rather, the main point of changing the application process was to take municipalities off the hook from having to administer the grant and vetting applications.

“I have to say that local governments really are thrilled at this,” said the minister. “It’s one less piece of work that they need to do.”

Municipalities will advise local homeowners of the need to apply to the province for the grant when the property tax notices go out in May.

But the province is already preparing an advertising campaign to let people know directly.

Robinson also promised a phone line and online registration at gov.bc.ca/homeownergrant on the government website.

For those wishing to avoid the inevitable rush and predictable crash of the site when official notices go out in May, applications are being accepted now.

Robinson was also asked why the province is requiring applicants to provide social insurance numbers, something homeowners never had to do in the decades when they applied through local government?

“The social insurance number is a common identifier for many tax programs,” explained Robinson.

“This is not an unusual component of making sure of eligibility for programs and using it to identify which citizens or permanent residents are making applications. What’s different is that we didn’t have that information (tied) to the homeowner grant.”

The Finance Ministry will use the completed applications to identify seniors and other homeowners who have not been getting their full entitlement to the grant.

SIN numbers should make it easier to prevent fraud, estimated at about three per cent or 33,000 of the 1.1 million claims filed annually.

“We’re reducing fraud and making sure that people get their full entitlements so we can, sort of, cross reference,” said Robinson.

“We need to have the tools in order to do that — to make sure that seniors are getting their full eligibility. But also making sure that people aren’t getting homeowner grants in two or three different municipalities. You’re only entitled to one homeowner grant.”

But as Robinson also conceded to Bernier: “The reality is — and the member knows this full well — that governments can use whatever information they have to help inform public policy. … That is how all governments operate.”

Her answer provided an opening for one more question from the Liberal finance critic: “This information gathered, does the minister, then, look at maybe any new housing taxes that could be applied now that she’ll have that information?

“No,” replied Robinson.

“I guess we’ll see if that answer means tomorrow or years down the road,” replied Bernier.

He thereby put down a marker against the hypothetical day when this finance minister —  or some future one — has an inclination to use the information gathered today to raise housing taxes.

 

© 2021 Vancouver Sun

Langley 1.1-acre residential land assembly sells for $8.6 million

Momentum Reality Ltd.
Western Investor

Momentum Realty Ltd., Langley, B.C., for Western Investor

Property type: Development land

Location: 200 Street at 53^rd Avenue, Langley, B.C.

Land size: 50,094 square feet

Land size in acres: 1.15 acres

Zoning: RM 3; FSR2 (floor-space ratio)

Potential: Multi-family rental building

Sale price: $8.63 million

Brokerage: Momentum Realty Ltd., Langley, B.C.

Brokers:  Josiah Cockrill and Wells Macey

 

© Copyright 2020 Western Investor

David Rosenberg says Canada’s housing market in a ‘huge bubble’

Derek Decloet
other

Home price gains don’t make sense when the labour market is so damaged from the COVID-19 pandemic, David Rosenberg says. Photo by Getty Images/iStockphoto

Canada’s housing market is in a “huge bubble” after months of runaway price gains, according to economist David Rosenberg, who was bearish on U.S. real estate before it crashed nearly 15 years ago.

Homes sold in the Toronto region topped $1 million (US$792,000) on average for the first time last month, with some suburbs and smaller cities recording price increases of 20 per cent or more from February 2020. On Vancouver’s west side, detached homes sold for a median price of $3.3 million in the first two months of the year.

“This might be one of the biggest bubbles of all time,” Rosenberg, founder of Rosenberg Research & Associates in Toronto, said in an interview on BNN Bloomberg Television. “Of course it’s been predicated on where mortgage rates are.”

The price gains don’t make sense when the labour market is so damaged from the COVID-19 pandemic, he said. “We have a situation where home prices are up 18 per cent year-over-year with practically no wage growth,” Rosenberg said.

 

Canada did not experience a widespread housing slump similar to the one the U.S. endured in the 2007-2008 period — a slump Rosenberg predicted when he was at Merrill Lynch. Today, Canadian home prices are about 40 per cent higher than in the U.S., adjusted for currency, according to Bank of Montreal.

The recent gain caught the attention of policy makers, including the Bank of Canada, which said housing activity “has been much stronger than expected” in a rate policy statement Wednesday. It held its key short-term rate at 0.25 per cent.

With an unemployment rate of 9.4 per cent in January, the central bank is right not to worry about inflation, Rosenberg said. Statistics Canada reports February jobs data on Friday.

“We have an unemployment level in this country that’s higher than it was at the peak of the last two recessions,” he said. “So we still have a very deep, I would say, deflationary hole in the labor market. You can have all the commodity strength in the world. If you don’t have strength in the labor market, you’re not going to get any inflationary impulse.”

 

© 2021 The Province

Kelowna penthouse sets a $10 million milestone

Mariam Halpenny
Western Investor

— Lakeview condo most expensive in Okanagan history. | Sotheby’s.

High above Okanagan Lake on the 36th storey of One Water Street’s east tower, the penthouse worth $10 million is the highest-priced condo listing in the history of Okanagan real estate.

“It’s a 4,500 square-foot residential unit. It is the tallest residential unit in Kelowna and the tallest residential unit in British Columbia, outside of Vancouver,” said Henry Bereznicki with North American Development Group. “The penthouse unit is situated on the entire top floor of our 36-storey tower.”

Once complete, the luxury three-bedroom home will be complemented by an additional 2,600 square-feet of balcony space.

Developed by North American Development Group and Kerkhoff Construction, the penthouse is priced at nearly three times the highest valued condo previously sold on Multiple Listing Service in the Okanagan.

“This is a world class tower. There’s nothing like this in Kelowna. I think it really puts downtown Kelowna on the map in comparison to downtown Vancouver or downtown Calgary or Edmonton. There’s a strong urban vibe here in Kelowna now. People do want to live in the core,” Bereznicki said.

The unit features floor-to-ceiling windows and gives people a 360-degree view of Kelowna’s downtown, Lake Okanagan and surrounding mountains.

The interior space is designed by Toronto-based Gluckstein Design and the penthouse is part of One Water Street’s Reserve Collection, a selection of two-bedroom and penthouse residences.

“Our goal with the One Water Street Reserve Collection is to provide an elevated living experience for discerning buyers” said Bereznicki.

Residents of One Water Street will also get access to The Bench — a 1.3-acre area on the fourth floor with a variety of resort style amenities including two outdoor swimming pools, a hot tub, fire pits, yoga and Pilates studio, kitchen area, entertainment area and pickleball court.

“There has been a surge in demand for luxury properties outside of major metropolitan areas since the start of the pandemic, launching cities like Kelowna onto the national and global map,” said president and CEO of Sotheby’s International Realty Canada Don Kottick.

One Water Street’s east tower features 427 condo units and is located on the corner of Water Street and Sunset Blvd, in the north-end of downtown’s cultural district.

“Half of our buyers came from Kelowna which surprised us. We thought there would be a large influx of people from other cities but basically, it’s about half Kelowna residents, about 40 per cent from the rest of British Columbia — a lot of Lower Mainland buyers and the balance would be Alberta with a handful of people from the United States.”

One Water Street is expected to be complete in 2021. The penthouse unit will be custom finished to the buyer’s requirements.

 

© Copyright 2020 Western Investor

Prince George building permits soar 300 per cent

Arthur Williams
Western Investor

— New homes under construction in Prince George. | Citizen

The value of building permits in Prince George, B.C., continued strong, with a more than 300 per cent increase in the value of permits issued in February, compared to February 2020.

The city issued a total of 26 building permits in February, worth an estimated $6.36 million according to a report to city council March 8.. In February last year, the city issued 17 permits with a combined value of $1.83 million.

Coun. Garth Frizzell said that the city had expected a slowdown in development during the COVID-19 pandemic.

“It really was a blip, and we’re coming back strong,” he said. “We’re still seeing really high dollar (values).”

Over the first two months of the year, the city issued a total of 58 permits worth a combined $17.88 million. That compares to 56 permits worth an estimated $9.53 million in the same period in 2020 and 64 permits worth a combined $16.13 million in the first two months of 2019.

Residential projects made up the bulk of the permit value in February, with permits issued for seven new single-family homes contributing $4.32 million, and two permits for new mobile homes adding $305,000.

City acting deputy manager Ian Wells said he anticipates development to continue at a brisk pace this year.

“We’re seeing a good uptake for subdivision applications and building permit application coming up,” Wells said.

 

 

© Copyright 2020 Western Investor 

Winnipeg’s tallest tower nears 42nd floor

WI Staff
Western Investor

— Construction photo at 300 Main Street on March 8, 2021.

Winnipeg is seeing completion of the tallest tower in the city as a $165 million, mixed-use mammoth building finishes construction near the intersection of Portage and Main.

It is also the largest multi-family rental build in Winnipeg.

Winnipeg-based Artis Real Estate Investment Trust(Artis REIT) had the concrete poured March 5 on the 41st floor of what will cap out at a 42-storey tower at 300 Main Street.

The Artis building is already, at just above 128 metres (419.9 feet), higher than the former TD Centre at 201 Portage, which has been Winnipeg’s tallest tower since it was built in 1990.

Once completed later this year, the Artis building will rise 142 metres above the pavement, anchoring the south end of Winnipeg Square.

The plan for the $165-million south tower was first unveiled in April 2016 by Artis REIT, a commercial real estate investment trust that owns Winnipeg Square and 360 Main, a 30-storey Class AAA office tower that comprises the north tower of the square.

The upper floors of 300 Main Street will be residential, with 400 luxury rental apartments. The lower levels will be taken by retail and office tenants.

Artis REIT is a diversified Canadian real estate investment trust investing primarily in industrial and office properties in select markets in Canada and the United States. Since 2004, Artis has built up a portfolio of commercial properties that has grown to approximately 23.8 million square feet of leasable space.

 

 

© Copyright 2020 Western Investor 

Condo developers perk up as buyers return to Metro Vancouver presale market

Jaonne Lee-Young
The Vancouver Sun

A conceptual photo from Centra, a project from the Everest Group of Companies in Surrey, which is getting back on track after pandemic delays. Photo by Everest Group of Companies /PNG

What a big difference a few months can make in the new condo presale market. There is renewed buyer interest and more projects are selling out as the impact of tight supply, surging prices in the resale market and low interest rates finally spills over from the detached-single home sector of the market

But the outcome for developers, buyers and real estate agents at two presale projects illustrates how tricky it has been navigating the pandemic and adapting to the very sharp, recent upturn in the presale market.

For much of 2019, sales had been frozen. For most of 2020, they stayed weak as other parts of the real estate market boomed.

In November, Denna Homes cancelled its Apex project of 276 condos and townhomes in a North Vancouver highrise. After sales fell off a cliff as COVID-19 cases started to rise, Denna returned down payments to buyers instead of holding onto them, said Dan Thomson, vice-president of marketing.

It didn’t look as if Denna would be able to sell enough presale contracts to get financing to proceed with construction, he said. The rising cost and tight supply of materials was another problem.

“We made a decision based on the information we had at the time,” said Thomson.

He recalled there were reports of more sales in the resale home market in November, but it wasn’t until “come January, all of a sudden, you’re hearing about single family homes that have 30 to 35 offers.

“That wasn’t the case at the time. People were still buying single-family homes at relatively ask(ing) prices.”

Meanwhile, some real estate agents who sold units at the Everest Group of Companies’ Centra condo tower project in Surrey, which sold mostly in 2019, had been wondering about commission fees that have been owed to them since last spring. The company only forwarded these payments to marketing firm Rennie last week.

Sales contracts set out that Centra would pay 50 per cent of the commissions owed to real estate agents 30 days after the company filed an amendment statement and received a building permit, which it did in February 2020. The remaining would be paid upon completion.

Real estate agent Becky Zhou, who sold five units at Centra, hasn’t heard directly from anyone at Everest or Rennie yet, but is glad to hear the commission cheques are en route.

Like other agents who had been wondering if they would be paid, she sees the payments as a sign the project will proceed rather than continue to stall or be cancelled. Her clients each paid deposits of 20 per cent of the full price.

The company said that shortly after it filed a disclosure and received a building permit, the province declared a public health emergency and Centra came to a standstill.

“We, like other developers, faced a reduction in the number of workers allowed on site, uncertainty surrounding the shipment of building materials, as well as other moving parts, all of which had a cascade effect, including a delay in paying realtors,” said Francisco Ignacio, vice-president of operations at Everest Development Group.

Now, he said, with low interest rates and shrinking options in the hot resale market, Everest is looking to relaunch presales and break ground on the Centra project this spring, with a new target of completing the project in about two years.

 

© 2021 Vancouver Sun

Real estate investment Part 2: condo pre-sales and LPs

Frank O’Brien
Western Investor

Vancouver real estate investor Ralph Case helped his son buy a pre-sale condominium in central Surrey in the summer of 2016, putting $30,000 down for a $200,000 apartment scheduled for completion in late 2018. In the summer of 2018, months before the project closed, his son sold the condo as an assignment for $330,000. Minus the down payment, the net profit was $120,0000, Case told the Jurock Land Rush conference March 6 in Vancouver.

In this second of a four-part Western Investor series on real estate investing, we outline how investments in pre-sale condominiums, or purchasing a share of a limited partnership in new condominium or multi-family rental projects can allow investors to get onto a real estate ladder that could carry them to their first home and beyond.

The advantages of buying pre-sale condominiums is that you are investing at today’s prices for a property that will complete in three years, when you expect the price to be higher. Also, a number of Metro Vancouver condo developers are currently offering discounts to move pre-sale units.

There is no guarantee, of course, and investors must be selective about what and where they will be buy. The overall benchmark price of a condominium apartment in Greater Vancouver is now actually 0.4 per cent lower than it was three years ago, but it increased 4.7 per cent in Surrey, 8.7 per cent in Maple Ridge and by 18 per cent in Mission over the same period.

For investors, the concept is not to move into the condo, but to sell it upon completion, or even earlier if assignments are allowed, or to place it on the rental market when the building is complete.

The following are current examples of pre-sale opportunities that are launching shortly, likely by April 2021, compiled with the assistance of Ryznar Media Inc.

• Era, by Swiss RealGroup Canada, is a 20-storey condo tower in Maple Ridge with about 200 units. The developer is offering selected pre-sale one-bedroom condos from $249,900.

• Belvedere, 275-unit condo concrete tower in Central Surrey at a SkyTrain station, by Square Nine Developments. One-bedroom units start in the high $300,000 range. More than 1,000 buyers have registered though it has not officially launched pre-sales yet.

• Telford on the Walk, in Burnaby’s Metrotown, by Intracorp, launched pre-sales in January 2021 and sold out 70 per cent of the 332 units in three weeks. The studio units pre-sell from $389,900 and the completion is set for 2024.

Limited partnerships

There are a number of limited partnerships involved in the real estate investment space, some of which allow income-producing property to be sheltered inside of a registered retirement savings fund. Most of these are targeted at accredited investors, who are those holding at least $5 million in assets (not counting a principal residence) and with incomes of $200,000 or more.

Nicola Wealth of Vancouver is one of the larger groups, with holdings in both commercial and residential and with three funds, including two which concentrate on long-term income and one, a capital fund, that focuses on buy-hold opportunities. According to the company, $1 million invested in Nicola Wealth in 2000 would now be worth $4.08 million. Nicola’s composite annual return is 6.9 per cent over the past 20 years.

One of the smaller limited partnership, and fairly typical of genre, is the Greater Victoria Property Group (GVPG), which concentrates on new multi-family rental apartments.

The latest GVPG offering is a 22-suite rental building in the Esquimalt area of Victoria, being developed as a joint venture with a general partner. The plan is to complete the building, rent the units and then sell the project within three years. Minimum investment is $50,000. The projection – not guaranteed – is for a net profit of $2.4 million, of which the limited partners would take a 40 per cent share, or about $966,958. The simple return on investment is projected at 48.3%, or 16.1 per cent per annum over the three-year horizon.

Developers can also act as partners for condo investors. An example is Mission Group, Kelowna’s largest residential developer, which pre-sells some new condos that are destined to put into a rental pool. An example is the Bertram building, which has 257 condos ranging from studios to two-bedroom suites, with prices starting in the mid-$200,000 range. It is close to the future University of British Columbia Okanagan downtown campus that was approved last summer. The Kelowna rental vacancy rate is 2.7 per cent and monthly rental averages $1,345 for a one-bedroom, but is higher for new projects.

 

© Copyright 2020 Western Investor

Abbotsford townhome project holds presale lottery

Jaonne Lee-Young
The Province

Cinema District townhouses in Abbotsford by Diverse Properties. Photo by Diverse Properties

Home sales and prices have rocketed during the COVID-19 real estate boom. Now, that heat is spilling into the townhome and condo market, where sales had been hammered by government policies in 2019 and then languished for most of 2020.

“Interest in the presale market always follows big rises in the market” for existing homes, said Vancouver real estate agent Mike Stewart.

He named several presale townhome projects — Forester in Coquitlam, Founders Block in North Vancouver and Five Road in Richmond — where developers recently said they had sold out.

This weekend, Diverse Properties was collecting forms for a lottery draw at its Cinema District, a project in Abbotsford,” so it can “determine the priority of buyers to make it fair for everyone interested in purchasing” one of seven 3-bedroom townhomes, starting at $770,999.

It is aiming to complete construction by January 2022, but the lottery will also lineup potential buyers for one larger show home unit it is also selling.

“There’s just been such high demand for these because they have legal rental suites. They were releasing their last phase and we just decided to be organized instead of dealing with all the craziness of multiple offers,” said real estate agent Wendy Tyson.

Interested buyers have until Monday at noon to submit a form. Entrants will receive a price list on Tuesday and then get details for a Zoom call on Wednesday at 6 p.m., during which there will be a live draw “for transparency.”

Michael Ferreira of Urban Analytics, which tracks presale trends, said buyers have been “lining up” again for townhome presales.

This clamouring to buy townhomes, however, hasn’t yet hit presales of highrise or low rise condo units, where there are more projects on the market. But even in those markets, buyer interest has perked up.

It comes as analysts and economists are debating where the housing market will go as low interest rates and tight supply fuel price surges, and there is a return of investors and speculators. Sales of existing detached homes and condos have been selling for hundreds of thousands of dollars over their asking price

The shift in a matter of months is hitting a market where timelines can last for years from the launch of presales to the completion of a project.

“For most of 2019 and 2020, it was difficult to generate the level of buyer interest and urgency needed” for developers to proceed, said Ferreira. “Sales reps were making literally thousands of calls to realtors and prospective buyers to try and generate sufficient interest.”

He added that highrise projects are “seeing significantly higher interest levels, particularly among investors, that will allow most projects to” move forward. Ferreira, however, said “the interest is nowhere close to the … frenzy we saw in 2016-18” when there were double-digit price increases for presale contracts.

 

© 2021 The Province