This week’s top stories are spread out across the commercial real estate sector in B.C., providing insight into the recreation, multi-family, industrial and construction arenas.
Our most-read Western Investor story of the week covers a multi-million dollar investment into Whistler Blackcomb resort. Over on BIV.com, a strata council in Coquitlam seeks to dissolve their group in hopes of coming away with a multi-million dollar pay-off. Meanwhile, a lack of industrial space is springing Mount Pleasant stock to life.
Developers looking to build transit-accessible projects may face a transit tax, Victoria Times Colonist reports.
Get the scoop on these stories in this week’s edition of Weekly Buzz.
The province’s biggest tourist draw is undergoing a huge transformation, in the hopes of pumping more investor and consumer spending into B.C.’s tourism sector.
Whistler Blackcomb is now embarking on a $345 million plan to turn Whistler Blackcomb into a year-round, weather-independent destination for tourism and sport – an unprecedented investment proposal that, despite the resort’s status as the largest and most visited destination of its kind in North America, Whistler Blackcomb needs.
Up against climate change and what the competition has to offer, Ski magazine’s best resort three years running is readying itself for a future beyond fresh powder.
That includes a wide range of snowless competitive and recreational sports, such as biking and hiking, and plans for a huge water park.
“What people don’t realize is … the ongoing events that we have throughout the year that continually bring people here,” said Dave Brownlie, president and CEO of Whistler Blackcomb.
Such events include the World Ski & Snowboard Festival – which extends Whistler’s winter season to April – Canada Cup Series events in ski and snowboard slopestyle and Crankworx, which has brought some of the greatest mountain bike athletes to Whistler Blackcomb for more than a decade.
“Most resort destinations will have what I refer to as sort of a single bell curve,” said Barrett Fisher, president and CEO of Tourism Whistler. “You have a high season that is either typically in a summer season or a winter season. But Whistler is unique in that we have two bell curves for summer and winter, and in fact we’re seeing more and more those shoulder seasons – primarily on weekends in the spring and fall – filling in.”
Fisher said visitor numbers in July and August “are now matching our high-season winter months.”
Coquitlam’s Brandywine development is appealing to the B.C. Supreme court to dissolve their strata corporation so they can sell the property to developers despite some opposition from strata members. The members will all face expensive renovation costs if strata opposition keeps owners from selling the property. If they dissolve and sell, the owners stand to make a considerable profit in a market with very tight supply.
At both Twelve Oaks and the Brandywine property at 585 Austin Avenue in Coquitlam, owners in the strata corporations are faced with significant maintenance and repair costs. Twelve Oaks was built in 1973; Brandywine was built in phases starting in 1976.
In both cases, an owners' vote was overwhelming but not unanimous in favour of dissolving the strata corporation.
At Twelve Oaks, 93.33% of the owners of 30 strata units voted for the wind-up; at Brandywine, 84.5% of the owners of 58 strata lots voted to wind up the strata corporation.
The Brandywine petition stressed that realtors at CBRE shopped around the development to ensure that the complex attracted the highest bid possible – something that the courts are expected to consider important when deciding whether the sale is in the best interest of the owners who do not want to sell.
“Following an extensive marketing campaign by its real estate broker and a competitive bidding process that resulted four initial offers and two further offers, the owners received an offer to purchase their strata lots that significantly exceeds the market value,” noted the Brandywine petition, which was filed on February 10.
All commercial real estate sectors in Vancouver are facing a squeeze. In the industrial category, inventory, sales and vacancies are exceptionally low. Vancouver’s Mount Pleasant neighbourhood features considerably more activity than other surrounding areas.
Still, price increases mean that many deals today are for smaller properties, and given the scarcity of available properties, there are fewer deals.
While total industrial sales hit a new record of $1.2 billion, most deals were for properties smaller than 5,000 square feet and worth less than $2 million. Underscoring this is the fact that about half of the largest deals were either non-arm’s length or went firm in 2015. The deals completed in 2016 were largely small trades.
Similarly, industrial land trades totalled 312 acres – and again, the deals were small. Just three properties in excess of 10 acres changed hands, the lowest number of large transactions in five years.
But don’t just take CBRE’s word for it.
Over in North Vancouver, Avison Young reports that vacancies remain tight at 0.6%, while just 16 deals occurred last year – among the lowest tally this decade, and not likely to be alleviated by new supply in the near future. Everyone’s holding on to what they’ve got, and even incoming strata units face fierce demand.
Speaking of strata, CBRE considers the market “alive and well in Metro Vancouver,” and Chard Development Ltd. is transforming a cinder-block warehouse in Mount Pleasant into a project set to complete in 2018.
Situated at 34 West 7th Avenue, the former Far-Met Importers warehouse will become a four-storey commercial strata development for up to five companies. The project will have 49,500 square feet of interior space plus 6,000 square feet of terraces that will include what Chard acquisitions officer Byron Chard terms an “outdoor boardroom.”
“We’re really trying to play on that and get the creative class to be in the area,” Chard said.
Provincial and municipal governments are meeting to discuss the possibility of establishing a tax for development near transit corridors that will go towards improving transit, the Times Colonist reports.
Provincial Communities Minister Peter Fassbender has been meeting in the Lower Mainland with developers and politicians there, floating the idea of a transit-supporting levy as a way to raise money for transportation projects.
While still conceptual, it’s an idea that could be applied to the capital region, Fassbender said, adding he is considering meetings with local officials here.
“Indeed, the approach to help fund transit is not isolated to Metro Vancouver. There are, I think, needs in the future in the Capital Regional District and other parts of the province,” he said.
Casey Edge, executive director of the Victoria Residential Builders Association, said provincial and local politicians have to realize there’s a limit to how many extra fees in terms of amenity contributions and development-cost charges developers can afford.
“Multiple levels of government are thinking that the development industry can pay for infrastructure or anything else that rightfully is the responsibility of taxpayers,” Edge said.
“Municipal and provincial governments talk about the profits of development, but they never talk about the losses.”
But municipal politicians are open to the idea.
“One thing I’m sure of is we need better transportation solutions in the region,” said Victoria Mayor Lisa Helps.
Helps said she would prefer to see transit funded through the gas tax, but applauded Fassbender for looking at creative options.