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Report: Industrial Real Estate is Vancouver’s Most Prized Investment Asset
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(Posted on Nov 24, 2018 at 02:31AM by Michelle Bogle)
According to a new Vancouver Flash Report 2018 by Altus Group, the city’s industrial real estate market is the most prized investment asset, well surpassing other commercial property types.
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In the last eight quarters, nearly 5 million square feet of new industrial space has been added to the market. However, this injection of properties hasn’t snuffed out demand. According to the report, the overall vacancy rate in this asset class dropped to the 2 percent range within the first half of this year. The trend is also expected to push the market’s net rental rates even higher.
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Industrial transactions have also played an important role in making up for the losses in the office and retail sectors during the first half of the year. Warehouses have been cited as one of the main driving forces, helping to boost the market’s lease rates up by 29 percent annually in Q1 2018. This significantly outpaces the worldwide average increase of 3 percent during that quarter.
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To learn more about Vancouver’s commercial real estate market, click here to view the Vancouver Flash Report 2018. Our team at Marcus & Millichap can also answer any of your questions. Contact our office today to speak with one of our expert advisors.
Controversial Sechelt Land Back on the Market in B.C.
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(Posted on Nov 24, 2018 at 02:27AM by Michelle Bogle)
A parcel of land at the epicentre of one of the most contentious decisions of the last Sechelt council is back up for sale.Â
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In 2015, Sechelt Sustainable Communities (SSC) applied to re-zone 162 hectares made up of several smaller lots in Porpoise Bay for a mixed-use development. However, the project was abandoned after a six-to-one March council vote that rejected sending the company’s rezoning application to public hearing. Then-councillor Darnelda Siegers, who is now the newly elected mayor, was the sole supporter in favour.Â
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The zoning for the land remains CD 13, which is the zoning that was put in place to allow the original Silverback development on the parcel, which went bankrupt. It was intended to include a golf course and 1,600 homes.
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When SSC, which includes then-mayor John Henderson and developer Clark Hamilton, purchased the land from the Silverback in 2014, the selling price of the parcel was quoted at $11.75 million. The property is now listed at $23.8 million.Â
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For more information regarding this land investment opportunity along the Sunshine Coast, please contact our team of commercial real estate advisors at Marcus & Millichap’s Vancouver office.
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Report: Apartment Rental Prices Increasing By Less Than Inflation in Vancouver, B.C.
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(Posted on Nov 24, 2018 at 02:22AM by Michelle Bogle)
According to a recent report by rental website PadMapper, the average rental prices in Vancouver have increased by less than inflation over the past year. This is in advance of the new, more-stringent rent-hike caps, which have yet to come into effect.
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In the November 15th report, the median rent for a Vancouver listing on PadMapper was $2,110 for a one-bedroom – an increase of 1.4 percent year-over-year, and Canada’s second-highest after Toronto. For two-bedroom Vancouver apartments, the median advertised price of $3,160 is the highest in the country by a significant margin, but it is 1.3 percent lower compared to November of last year.
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The allowable annual rent hike that B.C. landlords can impose on sitting tenants has been two percent plus inflation, which in 2018 totalled 4 percent. As of 2019, this allowable increase will be reduced to inflation only, which equates to 2.5 percent. However, this does not include any increases to rents on units between tenancies, which can impact average rental price increases. Rental price increases between tenancies are currently at the discretion of the landlord and are not government controlled.
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As for other parts of B.C., PadMapper noted that Burnaby was the third most-expensive market in the country for both one-bedroom and two-bedroom rents, at $1,580 and $2,250 respectively. Unlike Vancouver, Burnaby's one-bedroom price was a 5.3 percent increase over November 2017.
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To view the report, please click here. To learn more about multi-family investment opportunities in B.C., please contact our Vancouver Marcus & Millichap office to speak with a commercial real estate advisor.
More Affordable Housing Coming to Vancouver, B.C.
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(Posted on Nov 24, 2018 at 02:16AM by Michelle Bogle)
The B.C. government is funding 4,900 new affordable rental units to be built in the next three years as part of its plans to address the housing crisis across the province. The units will include both non-profit and co-operative housing and are designed to address affordability needs across a range of income levels in 42 communities.
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The buildings will contain a mix of units for middle-income individuals and families, heavily subsidized rentals for seniors and others on fixed incomes, as well as homes for low-wage workers. This is the first set of housing projects selected through the B.C. government’s $1.9-billion Building BC: Community Housing Fund. The fund is part of the government’s commitment to build more than 14,000 affordable rental homes over 10 years.
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Currently, 10 projects are slated for Vancouver with a total of 1,101 homes:
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• $18.1 million to Brightside Homes – 181 homes for individuals, families and seniorsÂ
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• $4 million to Lookout Housing and Health Society – 40 homes for individuals (2 projects)Â
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• $9.9 million to M. Kopernik Foundation – 99 homes for seniorsÂ
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• $10.2 million to New Chelsea Society – 102 homes for individuals, families and seniorsÂ
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• $4.6 million to Salvation Army Harbour Light – 46 homes for individualsÂ
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• $3 million to the Kettle Society – 30 homes for seniors with mental health challengesÂ
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• $7.7 million to Vancouver Affordable Housing Agency – 77 homes for individuals, families and seniorsÂ
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• $16.9 million to Vancouver Community Land Trust – 169 homes for people with HIV and AIDS and families and seniorsÂ
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• $35.7 million to Vancouver Community Land Trust – 357 homes for individuals, families and seniorsÂ
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To view the full list of approved affordable housing projects across B.C., please click here. For more information on how this may impact Vancouver multi-family investment opportunities, please contact our office to speak with a commercial real estate advisor.
BCLC Approves New Gambling and Entertainment Facility in Delta, B.C.
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(Posted on Nov 24, 2018 at 02:11AM by Michelle Bogle)
Earlier this month, the British Columbia Lottery Corporation (BCLC) announced the approval of a new gambling and entertainment facility in Delta, B.C.
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Cascades Casino Delta, which will be operated by Gateway Casinos & Entertainment Limited, will include a hotel, restaurants, meeting space and a casino with approximately 500 slot machines, 24 table games and up to six electronic table games. According to a press release, the BCLC said its approval follows extensive reviews of the market opportunity, business case, health impacts and municipal approval process to ensure that the project meets legislated requirements under the Gaming Control Act.
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The design of the casino reflects feedback from the public, which was received through ongoing community engagement. But, not all parties have been on board with the project, including the City of Richmond, which filed an objection with the BCLC, stating crime, traffic and transportation concerns. This prompted the BCLC's legislative requirement to implement a non-binding dispute resolution process and appoint an independent, third-party mediator to address issues raised in the objection. BCLC received Mr. Simon Margolis’ report on October 15, 2018, which concluded that the City of Richmond did not provide supporting documentation to substantiate its concerns. This information led the BCLC to finalize its approval of the project.
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Construction at the Delta Town & Country Inn site near the Massey Tunnel will begin in early 2019, and the casino is expected to open in mid-2020.
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Two Downtown Vancouver Office Buildings Bought By Toronto’s Allied Properties REIT
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(Posted on Nov 14, 2018 at 08:11PM by Michelle Bogle)
Earlier this month, Allied Properties Real Estate Investment Trust announced that the Toronto-based firm acquired Two Class I office buildings in downtown Vancouver for $57.5 million. The properties are located at 151 West Hastings in Gastown and 1220 Homer Street in Yaletown.Â
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“These are strategic acquisitions for Allied, in that we’re increasing our penetration in urban Vancouver just as it’s transitioning to a primary Canadian office market,†said Michael Emory, President and CEO, in a press release. “1220 Homer augments our concentration of Class I properties in Yaletown. 151 West Hastings will be our first acquisition in Gastown.â€
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Located on the east side of Homer, one building in from Davie Street, 1220 Homer is a tier-one Class I building. It is comprised of 21,708 square feet of GLA and is fully leased to Perkins + Will Canada Architects for a term expiring in March of 2023. The workspace was designed by the current user and achieved LEED Existing Buildings: Operations and Maintenance 2009 Platinum Certification in September of 2014.
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Located on the north side of West Hastings, one building in from Cambie Street, 151 West Hastings is a tier-one Class I building. While the façade has been preserved, the interior was completely rebuilt to current workspace standards. It is comprised of 38,511 square feet of GLA and is fully leased to Spaces for a term expiring in July of 2033 with four rent escalations over the term.
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The Yaletown sale has already closed and the Gastown sale is expected to close by the end of this month.
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To learn more about this recent acquisition or office investment opportunities in downtown Vancouver, please contact our team to speak with a Marcus & Millichap commercial real estate advisor.
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Capital Park Project Underway in Victoria, B.C.
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(Posted on Nov 14, 2018 at 07:57PM by Michelle Bogle)
Construction is about to commence on the new Capital Park Residences, which is part of a $250-million multi-phased mixed-use project behind Victoria’s legislature in the James Bay neighbourhood.Â
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The development is a partnership between Concert and Jawl Properties. The two companies bought the site (near Superior, Menzies and Michigan streets) in 2014 for $34 million when the province was selling land. Previously, it was used for old provincial offices and parking.Â
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A total of 113 homes are expected to be finished by early 2021 and will comprise of condominiums in five-storey and four-storey buildings, as well as seven townhouses. Condo prices range from $499,900 to $1.09 million for 485 square feet to 1,759 square feet units, while the townhomes will start at $1.489 million and offer 1,451 to 1,757 square feet of space.
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Twenty years ago, the Victoria Accord planning agreement was established for the area, which visualized a mixed-use approach. Goals of the accord included the development fitting in with the James Bay neighbourhood and the nearby legislature building, opening up the area with public access and amenities, and to preserve views. Today, that vision is becoming a reality as a second office tower of 120,000 square feet is slated to finish late next year.Â
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Currently, the site is also home to a 127,000 square foot office complex, which houses provincial staff. A Red Barn Market is open, along with a new library branch. Tenants have moved into 53 new rental apartments and a set of three heritage homes house 13 rental apartments. Much of the large public plaza is complete as well.Â
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To learn more about investment opportunities in Victoria’s James Bay neighbourhood or ongoing mix-use projects within the development, please contact our Vancouver office to speak with a Marcus & Millichap commercial real estate advisor.
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Vancouver Retail News: Lowe’s Closing Stores Across Canada and U.S.
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(Posted on Nov 14, 2018 at 07:32PM by Michelle Bogle)
Earlier this month, home improvement chain Lowe’s announced the closure of 51 stores in the United States and Canada as it strives to compete with rival Home Depot in a slowing housing market. Of those 51 stores, 31 are Canadian with one closure occurring in British Columbia. Lowe's also plans to close its block plant in Kamloops.
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It has been a trying last few quarters for the retailer, being hit especially hard by longer winters in North America and increased housing prices. Consumers are also spending less on housing, which has directly impacted the home improvement sector. The closures also follow a wave of similar moves by traditional retailers in the face of greater competition from Amazon and other mass online outlets.
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Sylvain Prud'homme, Chief Executive of Lowe's Canada, said the changes will allow the company to improve collaboration between its banners to better serve customers. “Everything will be done to ensure a smooth transition until the stores are closed, and Lowe's Canada will support impacted employees, including by transferring eligible employees to other locations within our network whenever possible,†he shared in a statement.
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The company, which operates about 1,800 U.S. stores and 300 in Canada, said it expects the closures to be completed by February, with the exception of some stores south of the border that will terminate immediately.
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To learn more about this closure and how it may impact the Canadian retail asset class, please contact our Vancouver office to speak with a Marcus & Millichap commercial real estate advisor.
Abbotsford-Mission, B.C. Named Third Region for Best Investment Opportunities in Western Canada for 2019
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(Posted on Nov 7, 2018 at 08:53PM by Michelle Bogle)
In a recent report by Western Investor, two neighbouring cities – Abbotsford and Mission – were named in the third top spot for best real estate investment opportunities in Western Canada for 2019. Located on the edge of the Lower Mainland, this region is proving popular with both residential and industrial investors.
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Part of the appeal in Abbotsford-Mission is affordability. More people from Metro Vancouver are infiltrating the area looking for work and housing. As of September, 1,567 new homes were under construction, including nearly 300 new detached houses, which sell for an average of $843,900.Â
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On the commercial front, Abbotsford’s industrial vacancy rate has dipped to 1.8 percent this year, which makes it the lowest in the Lower Mainland. The industrial lease rate is also sitting at an average of $9.17 per square foot. Investors particularly like this city for its robust infrastructure, award-winning cancer hospital and the fourth-busiest airport in Canada. It is also the agriculture capital of the country, grossing farm receipts three times those of Ontario’s Niagara region, which sits in second place.Â
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According to Western Investor, Mission is being poised as the next industrial destination. The district has great freeway and U.S. border access, which is ideal for distribution facilities. Currently, there are two main industrial parks in the area: Mission Industrial Park, which is primarily light industry, warehouse, office use and retail, and Silver Creek Industrial Park, which has direct railway and Fraser River frontage for heavier industrial operations.
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If you’ve been considering an industrial, agriculture or land commercial real estate investment in Abbotsford or Mission, please contact Marcus & Millichap’s Vancouver office to speak with one of our experienced asset-focused advisors.
East Vancouver Multi-Level Commercial-Industrial Building is Underway
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(Posted on Nov 7, 2018 at 08:48PM by Michelle Bogle)
Construction is underway for a new mixed-use commercial and industrial building on the northeastern corner of Vancouver within the waterfront area. PortLiving, a local developer, says that its Gateway project is a “first-of-its-kind vertical typology†with its diverse uses of office, light industrial and mini-storage space.
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Located at 3333 Bridgeway Street and designed by Stuart Howard Architects, the building will offer 110,000 sq. ft. of space within the 70-ft-tall, six-storey building. Unlike traditional industrial buildings, which use a single-level layout, the design of Gateway is different in that it stacks light industrial uses within a multi-storey building.
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“By going vertical with industrial space, we believe that we are developing fantastic space that can be leased at reasonable market value to help businesses stay and thrive in [the city],†said Tobi Reyes, CEO of PortLiving, in a statement. “This is an incredible site that provides an affordable Vancouver business address that is easily accessible and convenient between [...] the North Shore, Burnaby and beyond.â€Â
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The exterior of the building features a unique curved façade, which was inspired by salmon swimming upstream. It also boasts a large cantilevered landscaped rooftop, offering panoramic views of the inlet, downtown skyline and North Shore mountains. Its facilities are well-suited to artists, television and film production companies, construction trades showrooms, coffee roasters, music studios and commissary services.
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With industrial space in high demand across Metro Vancouver, this project will inject some much-needed square footage into the market by its completion date in early-2020.
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If you’d like more information about this multi-level commercial-industrial building, please contact our team of experienced investment professionals at our Marcus & Millichap Vancouver office.
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