Chinatown gentrification has polarized opinions for years, and one of the week’s top stories hits on the most recent development to ruffle feathers in the area. Our Weekly Buzz also touches on the increasing popularity of co-working spaces and how it’s changing the commercial real estate sublease game. Western Investor also took a look at B.C. mining regions emerging from industry bankruptcy. Lastly, the commercial real estate squeeze continues in Abbotsford, where a new community plan aims to limit residential sprawl.
Here is our roundup of the top four commercial real estate stories published this week.
City’s Chinatown residents fight 12-storey tower plan – Business in Vancouver
A 12-storey mixed-use building has been proposed for construction at 105 Keefer St., and Chinatown residents are pushing back against the City of Vancouver and developer Beedie Development Group. Residents are worried the new building with further gentrify the area and push up rents beyond the reach of locals.
After nearly four years of public consultation and five open houses, the Beedie company unveiled its plan to build 106 market housing units, 25 social housing units targeted to seniors and space for commercial use.
The property is currently under HA-1A (Chinatown historic area) zoning, which limits building heights to 90 feet. Beedie is seeking rezoning of the district to CD-1 (comprehensive development), which would allow buildings to go up to 120 feet.
“As a result of feedback from the community, the proposal before you will deliver a high-value community benefits package and elevated quality of architecture and urban design, which this gateway site rightfully deserves,” said Beedie Development Group president Ryan Beedie in a statement to council. “The opportunity for these community benefits simply would not exist if the project was developed under the allowable 90-foot height.”
Opposition to the proposal is fierce, however, with a petition signed by over 2,500 people asking council to reject it.
The main worry for Chinatown residents is that with each new residential development, the neighbourhood will become increasingly gentrified, raising market rent prices and squeezing some residents out of the area.
“We’re protesting this development because there’s 110 market units, so it’s a huge development that will gentrify the neighbourhood,” said Beverly Ho, an organizer of the Chinatown Concern Group. “If it’s approved by council and it gets built, it will inevitably raise the rents in the area and displace a lot of the low-income community – many of whom only speak Chinese, and can’t afford to live anywhere else.”
Co-working office options go upscale in Vancouver – Business in Vancouver
Co-work office spaces are becoming the new coffee shops for freelancers and tech startups alike. Real estate brokerages are seeing an increase in these kinds of spaces, and comment on whether they’re replacing or rivaling traditional sublease arrangements.
Reporting in the Vancouver office market in the first quarter of the year, NAI asked whether demand from co-working space providers represents true absorption in a market where vacancies sit at 8.6%, or if observers should view them as a use that delivers cash flow to landlords without substantially affecting vacancies.
It concluded that yes, co-working space providers are a legitimate use – just as legitimate, if not more so, than the sublease arrangements startup companies looked to in the past.
“People are looking for more of the flexible, packaged, higher-end office deals without the commitment,” Beaudry explained. “Rather than seeing large companies come in and lease out space, [co-working providers] are taking on the risk and they’re creating a business of absorbing and consuming a lot of the available square footage.”
The lease requirements are flexible, with tenants paying a monthly per-desk fee, and the finishes are high-end, with the provider effectively absorbing the cost of tenant improvements a company might have made had it been leasing its own space.
“Traditional leases are definitely not going to accommodate the current needs of tech companies,” Beaudry said. “These companies are creating a great short-term opportunity with a lot of flexibility.”
While co-working providers in the past provided a collaborative workspace with refreshments, the new generation of co-working spaces takes matters a step further.
Regus, the brand name of Jersey-based IWG PLC (IWG stands for International Workplace Group), is redeveloping 151 West Hastings as a campus-style office and event space.
“They’re creating events, they’re creating networking opportunities, they’re offering free beverages and food, and snack rooms and nursing rooms, co-ed washrooms. They’re putting a very interesting spin on it. When you look at the logistics of the deal, the type of build-out and the excess of quality in the space, typical businesses aren’t necessarily going to be able to afford that extent of a luxury build-out.”
B.C. mining towns bounce back – Western Investor
Mining towns are providing political pundits wrong as the Kootenays and Cariboo industries are regaining their glitz as company stock prices have risen to near-recovery levels. This spells economic success for resource towns.
One year ago, the share price for B.C.’s largest mining company, Teck Resources Ltd., had fallen below $4, and some analysts were predicting it would follow more than a dozen American coal mining companies into bankruptcy.
One analyst predicted the company’s stock would drop to $1 per share.
One year later, the company’s stock has moved back above $30, and Teck CEO Don Lindsay stood in front of his industry peers and cheerily dished out some crow for those analysts at the Association for Mineral Exploration BC’s (AME BC) Roundup 2017 conference in Vancouver.
“We had analysts and prognosticators telling us that we would never recover and that the industry was doomed,” Lindsay said. “Next time you see that, buy Teck.”
For the first time in four years, there was a sense of optimism at the annual conference that the mining and exploration sectors have survived one of the worst downturns ever and have good prospects ahead.
“There is a palpable sense that a turnaround is real,” says AME BC CEO Gavin Dirom.
The mood was similarly upbeat at the Cambridge House International Resource Investment Conference at the Vancouver Convention Centre West.
Mickey Fulp, publisher of the Mercenary Geologist and one of the Cambridge House conference speakers, points to the performance of the TSX Venture Exchange – which bottomed in January 2016 at 474 and is now around 809– as an indicator of the returning investor confidence.
“That’s [better than] a 50 per cent gain,” Fulp said. “And commodity prices have increased, and you’ve got [U.S. President Donald] Trump, and this infrastructure build-out – all of this kind of lining up. I think it’s going to be a very good year.”
Minerals and metals prices are rising, investor confidence in the majors is returning, and those majors are keen to restock depleting minable reserves, which means many juniors with promising deposits will find some willing partners or buyers.
Abbotsford community plan aims to limit ALR exclusions, sprawl – Business in Vancouver
The debate between whether limited available land should be used for residential or commercial development takes us to Abbotsford, where new city community plans are outlining how to regulate urban sprawl.
While densification of properties increasingly crops up as a potential means of keeping certain industrial uses closer to the core, the economics of the proposition often fail to pencil out. The throughput of industrial businesses would need to increase significantly to make the structures work. Most often, industrial activities remain ground-oriented and need lots of affordable space.
This fact is key to a decision that’s starting to play out in Abbotsford, which adopted a new community plan last summer. Part of the vision for preparing the community to grow to 200,000 people from the current tally of approximately 141,400 was the recognition that more land would be needed. Hemmed in by the Agricultural Land Reserve (ALR), the city knew it would have to choose carefully if it wanted to make another application for ALR land.
Speaking with Business in Vancouver last week, Abbotsford Mayor Henry Braun said the municipality decided to limit residential growth and seek extra land for jobs space only (Abbotsford hopes to seek exclusion of up to 696 acres from the ALR for industrial use).
“This council, and I as a mayor, are not going to be looking for exclusions in the ALR for residential growth,” he said. “We have too much sprawl that’s happened over the years: we need to densify, and go up, and that’s welcome news for lots of people.”
Braun said the city is focusing on infill opportunities, not just to limit sprawl but also to limit the expense of sprawl on civic infrastructure.
