Future Broadway Corridor shopping hub comes into focus

Cambie at West Broadway eyed for long-term redevelopment plans

Retailers are looking at 2019 as a year when a strong B.C. economy will keep sales growth robust, even as e--commerce continues to chip away at bricks-and-mortar store sales.

The future of retail space in both traditional and emerging spaces near Vancouver transit stations will likely gain clarity, while established prime shopping strips in the city struggle to remain relevant.

And while some of those strips have endured plenty of empty storefronts, there will be a collection of new retailers staking territory and vying for success.

One emerging retail area in Vancouver that is likely to be a high-traffic hub in a decade is unlikely to be on many people’s radar in 2019, as its transformation is largely in a conceptual stage.

Work crews, however, are gutting longtime retail spaces on the northwest corner of West Broadway at Cambie Street, where a second-floor Original Joe’s restaurant has long had prominent signage.  A ground-floor Starbucks and a string of other businesses stretching west all vacated space months ago to make way for a mixed-use building that will have five storeys of office space above two storeys of retail.

Pacific Crown Management Co. Ltd. gained a development permit earlier this year for the Yorkson Investment Co. Ltd.-owned site at 510 West Broadway, which is across the street from the Broadway-City Hall Canada Line station.

The project is significant because it is the first of many projects that are in various stages of conception. Those projects are expected to transform the area into a hub because it will in future be home to the intersection of two transit lines. Work on the Millennium Line Broadway Extension is expected to start in 2020 and complete in 2025.

B.C.’s Ministry of Transportation told Business in Vancouver that work to determine exact station locations is underway, and the ministry is now initiating discussions with property owners.

Rumours have circulated in retail circles about the possibility of a shopping centre being built under city hall and its lawns, which are south of the Canada Line station. The City of Vancouver is allotting $2 million for “master planning for the city hall precinct” in its 2019 budget.

Other potential projects in the neighourhood could be on sites such as 310 West Broadway, about a block east, where there is now a No Frills grocery store, said Retail Insider Media owner Craig Patterson.

“It’s safe to say that there are multiple proposals for development based on the fact that transit is being expanded in that area,” Patterson said.

The city’s current shopping hub servicing two transit lines is at the corner of Granville and West Georgia streets, where the landmark Hudson’s Bay Co. (HBC) building has been subject to much speculation over its future.

HBC and joint venture partner RioCan REIT put the store’s real estate on the block in 2017 and were rumoured to have been close to a sale in 2018. That deal fell through, however, prompting a reassessment of the site’s future and possibly the severing of an agreement between HBC and workspace company WeWork.

WeWork had been slated to lease the top two floors so HBC could consolidate in the rest of the building.

“I don’t know what will happen with WeWork,” Patterson said. “That was to be the sublease agreement. They were supposed to come in. The Bay was going to move menswear into the basement. We’ll see if that happens.”

Retailers along longtime prime shopping streets such as Robson and Alberni, meanwhile, will have their work cut out for them in the new year.

Robson Street in 2018 suffered a lot of rotation and plenty of empty storefronts in prime blocks east of Bute Street.

 “I was told that some stores’ sales on Alberni Street, in the luxury area, are down,” Patterson said, adding that he has heard that the reason for the sales decline is a drop in traffic from Chinese tourists – and this was before Canada arrested high-profile Huawei CFO Meng Wanzhou.

Rumblings about boycotts of Canadian goods and anti-Canada sentiment in Chinese media may stem the flow of wealthy Chinese tourists to Vancouver in 2019, and that could hurt shopping strips such as Alberni Street, Patterson said.

Nonetheless, he expects new retailers such as Warby Parker, Vacheron Constantin, Montblanc and Cartier to open Vancouver stores and to do well.

Hermès’ future two-storey flagship store is under construction on the southwest corner of Burrard and West Georgia streets. Retail sales in B.C. in 2018 are expected to grow by less than 4 per cent, which would be less than half of the 9.6 per cent retail sales growth in the province in 2017 – the highest annual rate since 1994, and the largest increase among provinces.

B.C. has the lowest unemployment rate among provinces and the economy is strong, however, and those are positive indicators for retail sales growth in 2019.

Copyright © Western Investor  Glen Korstrom Business in Vancouver January 24, 2019
  

B.C. commercial building permits break record

Statistics Canada data for November show the province issued the highest value of commercial building permits on record

The value of permits issued for commercial buildings in B.C. has never been higher.

New commercial permits topped $564 million in November, a 130 per cent increase over October, according to Statistics Canada. The agency reported that a $240-million permit for a new office tower in the Greater Vancouver region contributed most to the gain.

Total non-residential permits – which include commercial, institutional and industrial developments – reached nearly $742 million, a 75 per cent increase over the month before.

B.C. accounted for most of the national increase in non-residential building permit values, which rose 11.6 per cent in November to $3.3 billion.

Not all B.C. values rose.

Month to month, the value of permits for residential buildings fell 27 per cent to $893 million. The decline was driven primarily by a drop in permit values for single family dwellings, which fell 30 per cent.

Victoria, Vancouver among top national permit issuers

At the regional level, Victoria and Vancouver saw the third and fourth largest year-over-year gains for total permit values.

In Victoria, November values rose 72.6 per cent over 2017. In Vancouver, they were up 63.4 per cent.

Both regions were behind only Quebec, where values rose 177.3 per cent, and Brantford, where values increased by 158.2 per cent.

In total, Canadian municipalities issued $8.3 billion in building permits in November, up 2.6 per cent from October and 6.6 per cent over 2017.

Hayley Woodin Business in Vancouver | January 10, 2019

https://www.westerninvestor.com/news/british-columbia/b-c-commercial-building-permits-break-record-1.23590123

Provincial leaders hear conflicting advice on strata rentals

Rental task force recommends allowing all strata condo units to be rented, while industry group argues this would fuel speculation


B.C.’s Premier John Horgan and housing minister Selina Robinson are receiving opposing recommendations on whether to ban rental restrictions on strata units, or continue to allow strata corporations to limit rentals.

Currently, B.C. strata corporations formed before 2010 may have a low cap on the number of rentals allowed in their building – a bylaw that some housing advocates have argued causes units to sit empty as they cannot be rented out.

To avoid this, all strata corporations formed since 2010 have not been permitted to put rental restrictions in place, which means all owners of post-2010 condos may rent out their units.

The NDP government’s Rental Housing Task Force last week issued 23 recommendations for amending the Residential Tenancy Act. Its ninth recommendation was to “increase the availability of currently empty strata units by eliminating a strata corporation's ability to ban owners from renting their own strata units” – no matter how old the building.

The task force wrote in its Recommendations and Findings, “As one online participant wrote in support of removing rental bans in strata properties, ‘Allowing stratas to ban rentals assumes that renters are hazardous, and supports vacant condos owned by speculators. Condos have become fundamental to the supply of rental housing and should not be allowed to be prohibited.’ Most Canadian provinces allow owners of strata units to rent them out and do not allow discrimination against renters.”

It added, “While the Task Force believes this change will help to increase the rental housing supply, it is also important to give strata corporations the ability to evict tenants in exceptional cases where negligence, abuse or law breaking is disrupting the quiet enjoyment of other residents, putting people in danger, or harming the building.”

Would rental free-for-all fuel speculation?

However, the Condominium Home Owners’ Association of B.C. (CHOA) is lobbying to maintain the status quo that allows strata corporations to limit rentals in their buildings.

Tony Gioventu, executive director of CHOA, told Glacier Media ahead of the task force’s recommendations that allowing all condos to be rented out at the owner’s discretion would do the opposite of the intended result to increase supply, and would fuel investor speculation.

Gioventu said that condo buildings with no rental restrictions actually tend to have a much higher rate of empty units, as a higher proportion of the homes are purchased by investors. Units in unrestricted buildings are much more attractive to investor-purchasers, as those units can be rented out at any time. However, buildings with a lot of investor-owners tend to also have a higher proportion of units sitting empty.

Gioventu cited the results of a CHOA study of 16 buildings in Greater Vancouver with 50 or more units. Eight were built after 2010, and therefore had no rental restrictions, and eight before 2010.

“The pre-2010 strata buildings with rental restrictions bylaws had the lowest proportion of empty units,” said Gioventu. He said that these buildings had vacancy rates of two per cent or lower, meaning that virtually every unit was occupied, mostly by owners or their families.

In the strata buildings built after 2010, CHOA found vacancy rates were between 20 and 35 per cent. However, Gioventu added this had less to do with the freely permitted rentals, and more to do with investors and speculators tending to buy higher proportions of post-2010 condos.

He said, “They’re empty because the owners don’t want to deal with tenants. Those are the buildings that should be targeted.”

The City of Vancouver’s empty homes tax, and the province’s speculation and vacant homes tax, were implemented recently with the aim of solving exactly that problem.

Selena Robinson, minister of municipal affairs and housing, said she will deliver the recommendations to Premier Horgan, and the ministry will spend the coming weeks considering how the recommendations might be implemented and consulting with stakeholder groups.

Joannah Connolly Glacier Media Real Estate | December 19, 2018 | www.westerninvestor.com

Commercial real estate investment value on pace to surpass 2017 total

Investment in Canadian commercial real estate is expected to break records for a third consecutive year, led by demand in the Toronto markets and industrial sector

Commercial real estate dollar volume in the third quarter of 2018 has signified potential for another record-breaking year in investment value.

Commercial investment across the country may reach an all-time high for the third year in a row, according to new statistics by CBRE. The third quarter recorded 38.6 billion in sales year-to-date, nearly exceeding the $43 million total investment value in 2017. 

“This is the third year Canadian CRE investment will have hit an all-time high in trading volumes, and it’s no secret why: Canada boasts a rapidly growing population and diverse economy, and the security of income from real estate versus other asset classes looks like a safer bet,” said Peter Senst, president of CBRE Canada, Capital Markets. 

Investment value was led primarily by demand in the Toronto market and the industrial sector. 

Commercial investment in Toronto accounted for $14.5 million year-to-date, followed by $4.5 million in Montreal, $3.8 billion in Calgary and $3.3 billion in Edmonton.

Industrial investment across Canada accounted for more than a quarter of all real estate transaction value at $10.1 billion year-to-date – eclipsing the total dollar volume for 2017 of $7.4 billion. 

“Calgary has already doubled its 2017 industrial investment total and Edmonton has tripled its 2017 industrial investment volumes, while Halifax has seen its industrial investment increase nearly tenfold compared with 2017’s total: $215 million versus $26 million,” the press release reads.

Multi-family real estate is the second-best performing asset class, accounting for $5.5 billion in sales so far this year. 

Moving forward, lack of available multi-family stock and land supply for new projects may slow further investment.

Tanya Commisso | Western Investor | December 20, 2018

  

Five hottest British Columbia news stories of 2018

Western Investor's most-read stories, from dual-agency regulation to new and expanded residential real estate taxes

During a year of major real estate policy and regulation change, it comes as no surprise that WesternInvestor.com’s most-viewed B.C. stories gave readers the insight into these new developments, including B.C’s foreign buyer tax, restrictions on assignment sales to prevent ‘shadow flipping’ and ‘ double-ending’. Readers also frequented the sight to get the lowdown on up-and-coming investment destinations.

Here is our annual countdown of our five most-read British Columbia stories published in 2018.

5. Mill town of Powell River becomes low-cost investment destination

Our first story to garner the most views this year focuses on the economic growth of Vancouver Island town Powell River, a los-cost alternative to the mainland with a 80.3 per cent increase in housing sales year-over-year. 

4. Dual agency rules will disrupt housing market, real estate agents claim

Changes to the B.C. Real Estate Services Act that came into effect June 15, 2018 prohibited "double ending" – representing both a buyer and a seller in a real estate transaction. In our story, real estate professionals worried it could slowdown sales – and as the year progressed, they may have had a point. 

3. China's largest online retailer to start selling Canadian real estate

This quick-hit story on Chinese real estate portal Juwai.com and retail site JD.com teaming up to offer Canadian real estate to Asian consumers garnered the third-most views this year, showing us that readers are still drawn to stories on foreign investment in Vancouver property. 

2. Higher-priced house markets nailed by tax hike

Our second-most read story of the year focused on the first effects on the housing market following the B.C. Budget 2018 housing measures announcement. Pricey markets like Vancouver’s west side were the first to fall, seeing prices down 70 per cent in April 2018 versus April 2016. 

1. Canada Revenue Agency recruited to help fight mortgage fraud

Our most-read story of the year covered the CRA’s recruitment to combating mortgage fraud together with the Canadian Mortgage and Housing Corporation, by allowing lender to have access to an applicant’s tax data. Together with numerous Bank of Canada interest rates this year, it’s no surprise that readers we’re reading and watching to see how new regulations would affect mortgage eligibility in a changing market. 

REMAX forecasts Canadian markets in 2019

According to the REMAX 2019 Housing Market Outlook, the country’s average sale prices will get a 1.7% boost, an indication that the balance has finally returned to Canada.

The report notes that markets throughout the country stabilized this year after the 2017 aberration that saw prices in markets like Toronto’s surge beyond reasonable levels. Stabilization is expected to continue through 2019, a likely consequence of interest rate hikes that are believed will increase as the year goes on.

Thirty-one percent of REMAX survey respondents don’t believe interest rates have hitherto affected their ability to afford a mortgage, but that optimism doesn’t extend beyond December. Another REMAX survey of its brokers and agents revealed 83% expect interest rates to make Canadians’ home purchases cumbersome next year.

The report also expects sale prices in Vancouver to decline 3% in 2019 because obtaining a mortgage in the Metro region is becoming well-nigh impossible.

"The drop in sales in key markets across British Columbia can be partially attributed to Canadians' increasing difficulty in getting an affordable mortgage in the region," says Elton Ash, REMAX of Western Canada’s regional executive vice president. "The situation created by the introduction of the mortgage stress test this year, as well as continually increasing interest rates, means more Canadians will be priced out of the market."

The Greater Toronto Area, on the other hand, is expected to fare better next year as REMAX predicts sale prices will rise 2%, thanks to high demand for homes priced below $1 million. Demand will be weaker for homes above $1.5m, though. According to Christopher Alexander, REMAX’s vice president and regional director for Ontario-Atlantic Region, looming rate hikes might be spurring the restraint.

“People are a little more cautious than they were in the past because interest rates are starting to rise,” he said. “Government said it would be more aggressive with interest rates and people are waiting to see how it will all shake out.”

Alexander added that Toronto remains a popular destination, which should balance out weaknesses in its market.

“It’s not surprising [November sales in the GTA] were down year-over-year, but because Toronto is such a big destination, both domestically and globally, there will be good pockets of the city that balance everything gout.”

by Neil Sharma12 Dec 2018 | www.canadianrealestatemagazine.ca

After a relatively sedate 2018, Toronto is heating up again

After exhibiting relatively modest performance for most of 2018 with the advent of stricter mortgage qualification rules, Toronto is seeing a resurgence in market competition once again.

The latest numbers from the city’s real estate professionals’ association indicated that the total number of active for-sale listings in the GTA saw a 9.8% year-over-year decrease in November, down to 16,420 units.

During the same time frame, the volume of new for-sale listings in the region shrank by 26.1%.

“New listings were actually down more than sales on a year-over-year basis in November,” TREB President Garry Bhaura said, as quoted by Bloomberg.

Read more: Toronto apartment inventory having trouble catching up with demand

“This suggests that, in many neighbourhoods, competition between buyers may have increased. Relatively tight market conditions over the past few months have provided the foundation for renewed price growth,” Bhaura added.

Average home sales price last month was $788,345, growing by 3.5% from the same time last year.

Meanwhile, total sales in November stood at at 6,251 completed deals, representing a 14.5% annual decline.

TREB stressed, however, that any year-over-year comparison should take into account that November 2017’s performance is “distorted” due to a large number of buyers rushing to beat the implementation of B-20 in January 2018.

www.canadianrealestatemagazine.ca
by Ephraim Vecina07 Dec 2018

New small-space flex offices push $1,000 a square foot

Metro’s high-tech sector driving demand for new office-industrial strata projects

New light industrial/office strata projects springing up from Mount Pleasant to East Vancouver may have tapped into a profitable path, despite per-square-foot prices ranging from $800 to $1,000.

The most recent manifestations include a four-storey project on Yukon Street at West 6th Avenue – formerly the 3 Vets outdoor store – by Chard Development, which bought the site last year for $20.4 million.

Now under development, the 49,000-square-foot Yukon project will feature a high-ceiling ground floor for light industrial, with bay access for trucks, capped by three floors of stylish office space.

Chard recognized a demand for smaller office sizes from the area’s tech, finance and retail services industries. As a result, Yukon will feature smaller unit sizes (1,000 to 5,000 square feet) to adapt to this new Vancouver real estate reality, according to Byron Chard, Chard’s principal and CFO.

A similar Chard project at 34 West 7th Avenue sold out all 48,000 square feet while still under construction.

Nothing has pre-sold yet at the Yukon, where strata space starts at $1,000 per square foot.

The building will include a freight elevator, bike lockers, showers and 83 parking stalls, and it could prove popular, according to the type of high-tech tenant Chard is targeting. Completion is expected in 2020.

“I can definitely see the demand,” said Dogu Taskiran, a partner and founder at Stambol Studios, a virtual-reality startup that concentrates on the real estate market.

Taskiran said the Mount Pleasant location and ample parking would be among the draws.

Stambol is currently splitting 2,000 square feet of space in False Creek Flats, where the total monthly rent is $3,000, which Taskiran described as “a very good deal, very cheap.”

Chard noted that a startup could buy office or industrial space at Yukon and lease out part of it until it expands, but he expects most of the buyers will be sole owner-occupiers.

“Our goal is to make the space as flexible as possible,” he said.

Alliance Partners is trying the same concept in East Vancouver with a five-storey, 55,000-square-foot light industrial/office strata project on Clark Drive at Adanac Street.

Kevin Kassautzki, vice-president at Avison Young, which is handling sales of the project, expects per-square-foot prices to be in the $700 range for industrial space and $800 for offices.

“I think this area is on its way to becoming the next Mount Pleasant,” Kassautzki said.

There is an appetite for buying strata office space from larger players in the tech community, Taskiran said, but he added that Stambol and other startups often prefer to lease. A common theme, he said, is to stay out of the downtown, where higher lease rates and a lack of parking are considered obstacles.

Frank O’Brien | Western Investor
November 21, 2018