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Why this old apartment building is worth $19 million

In Vancouver it is often what lies beneath, not what is built above, that determines real estate value
1065 Pacific Street, Vancouver is assessed at $17.75 million while the building is worth less than $50,000, according to BC Assessment. | Goodman Commercial

A 60-year-old, 30-unit rental apartment building on a 0.20-acre lot in Vancouver’s West End sold recently for approximately $19 million, the equivalent of $630,000 per suite, or $95 million per acre.

Only in Vancouver, perhaps, where what lies beneath is often worth much more than what is built above.

In this case, according to BC Assessments, the 12,696 square foot lot at 1065 Pacific Street is valued at $17.75 million while the old apartment building is worth less than $50,000.

Wall Financial Corp., considered one of Vancouver’s more astute developers, closed on the property on January 31, 2023, with the intent of rezoning the land and developing a 32-storey rental building.

Mark Goodman, principal of Goodman Commercial, with partner Cynthia Jagger, represented the vendor in the transaction.

Goodman said there was considerable interest in the property, which is in a prime location two blocks north of Sunset Beach and close to downtown. It offers easy access to Stanley Park, shops, nightlife, restaurants and public transit.

“It was a challenging deal because we needed someone who was sophisticated enough, and who had an understanding of how something like this could work, and somebody patient who could take the time and go to work with the city,” said Goodman.

The transaction involves a two-pronged payment structure that should end up with a valuation close to the property’s $18.95-million list price. A base price was paid and a bonus payment will be triggered, based on rezoning of the site and the determination of its density.

Goodman called the sale an “historic shift for Vancouver’s West End” since such properties haven’t come forward in a long time.

“The new owners will take it through the rezoning and facilitate the construction and there will be a new tower featuring both market and below-market rentals,” he said.

Wall Financial proposes replacing the existing building with 144 market rental units and 36 below-market rental units in a tower of 151,453 square feet, if rezoning allows.