Interest rates may be low, cash readily available and buyers lined up, but owners of Victoria rental apartment buildings are not eager to sell in a city with a tight 2 per cent vacancy rate.
That's a synopsis of the Victoria multi-residential market, according to Colliers International's recent apartment investor overview.
"And it pretty much applies to all commercial real estate product segments - office, retail, industrial and multi-residential apartment - there's just not enough product to satisfy demand," said Ken Cloak, Colliers Victoria associate vice-president and multi-family specialist.
The Colliers report noted that last year there were 12 apartment-building sales for total sales of $46 million, down from 2010's 22 sales totalling $98.5 million. The 10-year average is around $56 million.
"The only meaningful thing about that is we didn't see any portfolio trades in 2011," said Cloak.
Of the 12 large sales last year, the biggest was the 72-unit Westside Apartments (now Olympic View Terrace) at 885 Craigflower Road, which sold for $7.9 million in October. Other big sales included the 64-unit Quadra Villa at 2835 Quadra Street, sold for $6.7 million in June, and the 43-unit Don Quadra at 3244 Quadra Street, sold for $5.3 million.
Cloak said the only thing helping the vacancy issue is investment in condominium projects. He said investors are buying now while interest rates are low and renting the suites.
from Western Investor May 2012
