Commercial Real Estate

Planned city office tower on hold.
Aquilini Investment Group says there's no market for its proposed 23-storey building.

Frances Bula
Vancouver Sun
Friday, April 25, 2008

One of two planned office towers for downtown Vancouver is on indefinite hold because the developer says there's no market for it, a troubling sign for the city's commercial future. David Negrin of Aquilini Investment Group said the company had planned to build a 23-storey tower on land it owns near GM Place. But he said commercial brokers weren't able to find any tenants willing to pay the $40-45 a square foot the company needed to make the project which had been planned as a cutting-edge carbon-neutral building designed by well-known architect Peter Busby work financially.

Negrin acknowledged that businesses might be willing to pay the higher prices right in the central business district, but not for something on the edge of the peninsula like the GM Place site. "Once you're outside of that downtown core, people will say, 'If we're paying this much here, we might as well go to the suburbs."

The brokers might have been able to find customers willing to pay the $30-32 a square foot that is the going price in suburban locations, said Negrin, but that amount wouldn't even have covered construction costs for the tower. That's in spite of the fact the company already owned the land and wouldn't have had to provide parking, since parking is available around GM Place.

Negrin said the company also offered to build boxes in GM Place that corporate clients could have as part of their lease, but even that wasn't enough of an enticement. He said the company got only one nibble, a small law firm that indicated some interest but never actually came through. Negrin said that means if the city wants to create commercial space to ensure that the downtown continues to have space for jobs and not just condos, city planners will have to allow buildings that are a mix of condos and offices. That way, the profit from the condos can help subsidize offices and allow them to be rented at rates that businesses are willing to pay.

"If you had residential, then you could sell the office for $30 to $32 and then you attract the businesses back in from Richmond and Burnaby," said Negrin. He said construction costs currently are running at almost $300 a square foot.

For the past two years, city planners and others have been debating the whole issue of how the downtown is developing. Critics have said that condos are squeezing out commercial building in the downtown and turning the entire peninsula into a resort where people live and entertain themselves, but don't work. City planners have undertaken a massive study of where people work in the city and imposed a moratorium on condo building in certain parts of the downtown, in an effort to preserve job space for the future.

The downtown hasn't had a new office-only tower built since 2003.
The only other office tower currently being planned is a new Bentall tower on Thurlow Street, although other inquiries have been made at Vancouver city hall.

SOLD

I am pleased to anounce the sale of 3349 Archimedes Street, Vancouver.

For further information please visit:

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Market Update

BC Home Sales Down in First Quarter.
Vancouver, BC – April 18, 2008.

British Columbia Real Estate Association (BCREA) reports residential sales dollar volume on the Multiple Listing Service® (MLS®) in BC dipped 1.8 per cent to $8.9 billion during the first quarter, compared to the same period in 2007. Residential unit sales declined 13.5 per cent to 18,635 units during the same period. The average MLS® residential price in the province reached $478,423, up 13.5 per cent from the first quarter of 2007.

“The housing market lost some steam during the first quarter,” said Cameron Muir, BCREA Chief Economist. “Eroding affordability has squeezed some potential buyers out of the market, while uncertainty about the duration and impact of a weak US economy and housing recession likely has some consumers sitting on the sidelines.”

“Despite weakness in the forest sector, economic fundamentals in the province remain strong and continue to underpin housing demand,” added Muir. “A 25 per cent increase in the number of homes for sale is providing home buyers with more selection and reducing the chances of competing bids on the same property.”
March MLS® residential sales volume fell 12.4 per cent to $3.48 billion compared to March 2007. Residential unit sales declined 22 per cent to 7,128 units in March, while the average MLS® residential price increased 12.3 per cent to $488,796 compared to March 2007.

Market Review

Sector reaching for sky, Building permits leap by $130 million in B.C.

The Province; With CanWest News Service files
Tuesday, April 08, 2008

B.C.'s construction industry looks set to continue its winning ways, based on a 16.1-per-cent jump in building permits issued in February.

The value of permits in B.C. in February rose to $944.9 million from $814.1 million in January, Statistics Canada said yesterday. The province posted the country's second-largest gains in dollar terms after Alberta, where building permits climbed 11.8 per cent to $1.3 billion, StatsCan said.

Residential permits in B.C. climbed 15.1 per cent, it said. Non-residential, which includes institutional, commercial and industrial, rose 19.9 per cent. In Vancouver, building permits rose by 5.3 per cent to $447.5 million while Victoria's soared 37.3 per cent to $74.3 million.

Building permits are regarded as a leading indicator for construction activity.

Nationally, Canadian building permits declined unexpectedly in February for a fourth consecutive month, led by a sharp drop in non-residential construction plans in Ontario. Municipalities across the country issued $5.8 billion worth of building permits in February, down one per cent from January, the federal agency said. The value of non-residential permits fell 25.6 per cent to $1.9 billion - the lowest level in more than a year due to declines in institutional, commercial and industrial sectors, it said.

The institutional sector dropped 35.7 per cent to $452 million, the commercial component lost 16.2 per cent to $1.2 billion and the industrial sector fell 39.4 per cent to $265 million. In the residential sector, building permit values were up 18.2 per cent to $3.9 billion, with multi and single-family permits accounting for much of the gain in February.

"Nationally, a marked increase in residential intentions was not enough to offset a decline in intentions in the non-residential sector,"StatsCan said. "February's decline resulted from much lower non-residential construction intentions in Ontario. If the province were excluded, the total value of building permits nationally would have increased 9.8 per cent, instead of declining one per cent."

Most analysts had expected the value of building permits to rise by more than one per cent in February. Values fell 3.5 per cent in January. "Despite the weak headline number, the housing sector remains on solid footing in Canada," said Jacqui Douglas, economics strategist at TD Securities.

Market Update

New listings outpace sales to start the spring cycle.

VANCOUVER, B.C. – May 2, 2008.
An influx of new listings entered the Greater Vancouver housing market in April 2008, while residential sales reduced slightly compared to the same period a year ago.

The Real Estate Board of Greater Vancouver (REBGV) reports that residential property sales in Greater Vancouver totalled 3,218 in April 2008, a decline of five per cent from the 3,387 sales recorded in April 2007, and a 3.8 per cent drop from the 3,345 sales in April 2006.

New listings for detached, attached and apartment properties increased 25.6 per cent to 7,010 in April 2008 compared to April 2007, when 5,580 new units were listed.

“Residential sales continue to be strong, but there is a lot more choice on the market today. This is good news for a market that has been defined by record-breaking activity for most of this decade,” said REBGV president, Dave Watt.
“Despite this seeming re-balance between sales and listings, it took, on average, six fewer days to sell a home in Greater Vancouver compared to the previous year, with a days on market average of 33 in April this year,” said Watt.
Sales of detached properties declined 7.8 per cent to 1,293 from the 1,403 detached sales recorded during the same period in 2007. The benchmark price, as calculated by the MLSLink Housing Price Index®, for detached properties rose 11 per cent from April 2007 to $771,321.

Sales of apartment properties in April 2008 declined 2.4 per cent to 1,317, compared to 1,350 sales in April 2007. The benchmark price of an apartment property increased 9.6 per cent from April 2007 to $389,070.
Attached property sales in April 2008 are down 4.1 per cent to 608, compared with the 634 sales in April 2007. The benchmark price of an attached unit increased 10.5 per cent between April 2007 and 2008 to $477,900.

Bright spots in Greater Vancouver in April 2008 compared to April 2007:
Attached:
Squamish: up 84.6 per cent (24 units sold from 13)
Vancouver East: up 50 per cent (51 units sold from 34)
Sunshine Coast: up 157.1 per cent (18 units sold from 7)

Apartments:
Maple Ridge/Pitt Meadows: up 32.3 per cent (41 units sold from 31)
New Westminster up: 33.8 per cent (95 units sold up from 71)
Port Moody/Belcarra: up 23.7 per cent (47 units sold up from 38)
Richmond up 7.8 per cent: (179 units sold from 166)

For Sale

I am pleased to announce the listing of 3349 Archimedes Street, Vancouver.

This 2 level home is located in a popular Collingwood area of East Vancouver and is close to skytrain, transit, schools, shopping & all amenities. This home's features include: 2 bdrms upstairs & 1 bdrm suite downstairs with its own entrance. Recent updates include a new roof & boiler. Live here now & build your dream house in the future.

For further information please visit:

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Market Update

Housing market moderates for spring-time buyers.

VANCOUVER, B.C. – April 2, 2008

The Real Estate Board of Greater Vancouver (REBGV) reports that while there were fewer housing sales in March 2008 compared to last year, residential prices continued to climb.

Residential property sales in Greater Vancouver totalled 2,997 in March 2008, a decline of 16.3 per cent from the 3,582 residential sales recorded in March 2007, and a decline of 25.7 per cent compared to the 4,033 sales in March 2006. New listings for detached, attached and apartment properties increased four per cent to 5,674 in March 2008 compared with March 2007, when 5,456 new units were listed.

“The market is continuing to balance, with sales and listings beginning to re-align with our 10-year averages,” says REBGV president, Dave Watt. “The selection of inventory hitting the market is wider than we have seen in the past few years, which gives prospective buyers more choices.”

Sales of detached properties declined 20.2 per cent to 1,116 from the 1,399 detached sales recorded during the same period in 2007. The benchmark price, as calculated by the MLSLink Housing Price Index®, for detached properties rose 12.1 per cent from March 2007 to $764,616.

Sales of apartment properties in March 2008 declined 10.6 per cent to 1,370, compared to 1,532 sales in March 2007. The benchmark price of an apartment property increased 11.5 per cent from March 2007 to $389,609.
Attached property sales in March 2008 are down 21.5 per cent to 511, compared with the 651 sales in March 2007. The benchmark price of an attached unit increased 10.6 per cent between March 2007 and 2008 to $473,543.

Bright spots in Greater Vancouver in March 2008 compared to March 2007:

Attached:
New Westminster........................up 142.9 per cent (17 units sold up from 7)

Apartments:
Port Moody/Belcarra....................up 31.6 per cent (50 units sold up from 38)
Maple Ridge/Pitt Meadows...........up 48.5 per cent (49 units sold up from 33)