Weekly Buzz: Major commercial real estate sales

Western Canada's top commercial real estate stories, featuring coverage on sales from Vancouver to Victoria and construction costs

Western Investor
February 8, 2019

tillicum centre


The week’s top stories cover three separate major sales that made news this week, from a shopping mall on Vancouver Island, to the sale of Vancouver’s newest casino and hotel, to a profile of several self-storage facilities across four provinces. Meanwhile, new analysis on construction costs across Canada reveal impending pressures for small developers.

Here is Western Investor’s pick of the top commercial real estate stories published this week.


Crestpoint and Anthem partner to acquire $110M Victoria property – Western Investor

The two real estate investment groups purchased Tillicum Centre from RioCan, a retail mall of over 50 stores and services.

Two real estate investment management groups have partnered to acquire a Victoria, B.C. shopping centre for $110 million.

Crestpoint Real Estate Investments Ltd. and Anthem Properties Group Ltd. purchased Tillicum Centre, a retail mall of over 50 stores and services located at 3170 Tillicum Rd., from RioCan. The property is home to a Lowe’s Home Improvement, Save-on-Foods, London Drugs, Winners and a Cineplex cinema.

"This is an excellent acquisition for us," says Kevin Leon, president of Crestpoint. "Greater Victoria has emerged as one of the most desirable markets in Canada due to its growing population, diversified regional economy and strong fundamentals in the commercial real estate market.”

The shopping centre’s strong anchor tenants make Tillicum Centre an in-demand retail location for the Capital Regional District.

Tillicum Centre was built in 1982 and was recently renovated in 2016.

Vancouver-based Anthem Properties and Toronto-based Crestpoint each manage approximately $6 billion and $4 billion in real estate assets, respectively.

[Western Investor]


Paragon Gaming sells stake in Parq Vancouver casino – Business in Vancouver

The company behind Parq Vancouver sold its stake for an undisclosed amount to PBC Group.

Paragon Gaming announced Feb. 1 that it has sold its stake in downtown Vancouver’s casino, hotel and dining resort Parq Vancouver, for an undisclosed amount to PBC Group.

The announcement comes nearly three months after rapper Drake claimed that he was profiled and kept from gambling at the casino.

The casino's public relations response to the incident came under fire from crisis-management professionals because the casino did not deny that Drake was profiled, even though the casino put out a statement saying that “we categorically stand against racism of any kind.”

Las Vegas-based Paragon had spearheaded the design and development of Parq, along with Ottawa-based PBC Group and Toronto’s Dundee 360Vox. Paragon’s involvement in downtown Vancouver started in 2006, when it acquired Edgewater Casino, the only licensed casino in the city.

It then unsuccessfully lobbied city hall to be able to expand operations.

Nonetheless, Paragon managed Edgewater for more than 10 years before it relocated its gaming operations to Parq Vancouver.

Parq opened on Sept. 29, 2017, after a Coldplay concert. It was about a year behind schedule and roughly $95 million over its original $535-million budget.

The site includes a two-level, 72,000-square-foot casino with 600 slot machines and 75 game tables. It also has a 188-room Douglas Autograph Collection hotel, a 329-room JW Marriott hotel, eight eateries and a 63,000-square-foot conference centre.

[Business in Vancouver]


StorageVault Canada buys 38 self-storage facilities for $275M – Western Investor

The storage properties are located in B.C., Alberta, Manitoba and Ontario.

StorageVault Canada has agreed to purchases 38 self-storage facilties across four provinces from Wilmington Capital Management, Real Storage Private Trust and its partners.

The storage properties are located in B.C., Alberta, Manitoba and Ontario. The transaction also includes a 24 per cent interest in a redevelopment property in Kitchener, Ontario.

“[The sale] is in keeping with Wilmington’s strategy of seeking undervalued investment opportunities and optimizing the timing of value realization,” said Christopher Killi, CEO of Real Storage Private Trust and Wilmington’s managing partner of real estate, in the release.

Wilmington will retain non-storage assets that are part of its present portfolio. Wilmington partnered with Real Storage Private Trust as well as SNS Storage (Ontario) Limited Partnership, Real Storage GP Inc., and 2242907 Ontario Inc., for this transaction.

Wilmington plans to repay $106 million in debt from the proceeds of the sale. Wilmington stands to gain approximately $53 million from the deal, which requires two-thirds of Wilmington shareholders’ approval to go ahead.

“Post-closing, the corporation will have the financial flexibility to continue to add value to its remaining operating platforms and to actively seek out additional investment opportunities where it can add value,” Wilmington said in the release.

[Western Investor]


Rising construction costs herald a reckoning for small developers – Business in Vancouver

Today, buyers are more cautious and construction cost increases mean developers have limited room to manoeuvre.

A year ago, people wondered how high prices could soar. Presale condo pricing was pushing the envelope across the region, and Bosa had recently sold office space at 320 Granville Street for slightly more than $2,100 a square foot.

Today, buyers are more cautious and construction cost increases mean developers have limited room to manoeuvre. While the average increase is less than 10 per cent, according to cost consultants at Altus Group, several trades are able to demand many times that because schedules are tight. It’s their way of prioritizing whose work gets done.

This concerns Neil Chrystal, president of Polygon Homes Ltd. and a panellist at the recent Urban Development Institute (UDI) forecast luncheon.

“How does the bottom line look after you factor in much more expensive construction costs? Because if the numbers don’t make sense, we won’t move forward,” Chrystal said. “We started doing less last year, and we’re still trying to figure out what we’re going to do this year.”

With some projects, it might be better to wait, so that the final cost to the consumer allows developers to get the requisite number of pre-sales to trigger financing, which banks are less inclined to give these days.

“We all need to go out and get pre-sales to get our financing, and financing is going to be tougher,” he said. “The big banks say, ‘We’re only going to be financing our Tier 1 developers.’ They’ve only got so much money to put out there.”

This could cause problems for smaller developers that aren’t well capitalized and find themselves pinched by rising costs, lower sales and higher interest rates on financing they do secure.

“There’s going to be a shakeout a little bit this year with the smaller guys,” he said. “It’s going to be trouble.”

Time to think

Your intrepid columnist is filing this from Sacramento, where he’s on the lookout for Anthem Properties Group CEO Eric Carlson. During a lively exchange at the UDI forecast luncheon, Carlson announced he was heading there promptly.


It’s not just the company’s recent purchase of the Cathedral Square site in Sacramento’s downtown for mixed-use development. Rather, it’s the city’s desire to see projects built – a desire lacking over at the District of North Vancouver.

The district regularly failed to meet its long-standing goal of building 500 new homes a year. Indeed, it recently asked for a revamp of a six-storey project for seniors in the Edgemont Village neighbourhood.

“Thoughtful people, architects and planning staff” had put in two years of work on the project, he said.

“Is two years not enough?… Is that not what they’re good at? Shame on you,” he exclaimed, to thunderous applause from an audience too familiar with cumbersome civic approvals processes.

Under the circumstances, few in the audience expect the BC NDP to build 114,000 affordable new homes in 10 years. Most pegged this year’s tally at between 1,000 and 2,000 units.

[Business in Vancouver]

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