Stagnant developments across Vancouver and Victoria and Vancouver Island are springing back to life, and this week’s top stories cover mixed-use project kick-starts in North Vancouver and Colwood. Tsawwassen First Nation’s land is also the subject of potential development, as the site has become an area of interest for industrial projects. As one of the last areas large enough for considerable industrial development in Greater Vancouver, the TFN are weighing their options. In the residential market, the federal government is looking into the legality of recent condo presale contracts that are swapping owners.
Here is Western Imvestor’s pick of the top four commercial real estate stories published this week.
North Vancouver adopted a new community plan in 2012 outlining plans to densify the neighbourhood and turn Marine Drive into a mixed-use hub. After five years, the City’s plan is finally materializing. The area is finally poised to boom, thanks to real estate demand from investors, BIV reports.
“The five-year plan was to really develop Marine Drive into a destination whereby someone would come for shopping and lunch and all sorts of services. I’ve been watching and waiting for that to happen,” Cathryn Coe said.
With the arrival of new businesses, including a White Spot, the area is starting to come into its own as development potential in other areas of the North Shore max out.
“Marine Drive is the next area, really, to take off in terms of development because Lower Lons-dale is so saturated,” she said.
Tangible proof of the shift came earlier this summer, when Coe sold the apartment she owned in the building in just 10 days. The price was 25% above the list price two years ago, when the unit sat six months without a taker.
The phenomenon doesn’t surprise Matt Thomas, a vice-president with Avison Young in Vancouver. Prices for commercial properties in the corridor have taken off in the past six months, Thomas said, as investors leap on opportunities in the Marine Drive corridor no longer available elsewhere.
“Developers have basically snapped up everything available in the Lower Lonsdale and Moodyville area. The next best spot would be Marine Drive,” he said. “There’s been a lot of sales. These aren’t huge properties, but there’s a lot of them and there is some development potential, some assembly potential, with a lot of them.”
The area has long been of interest, but the shift in sale prices underscores the demand Coe saw when she sold her solitary residential unit. Redevelopment may not be in the offing just yet, but buyer demand highlights where the future lies.
Taylor’s Crossing at 1025 Marine Drive is a prime example. Built in 2001, the project received special zoning to accommodate uses that included an Indigo bookstore and craft brewery. Part of the vanguard of a commercial renaissance now firmly in place, the project helped spur the district to build on its success to mandate greater density on surrounding properties, through the 2012 OCP.
“You wouldn’t build what’s on Taylor’s Crossing today because you’d be leaving a lot of density on the table,” Thomas explained.
While the development is nowhere near the end of its useful life, it sold this summer for $24 million, or about $455 per land foot (about $260 per buildable square foot).
A site in Colwood near Victoria has remained a hole in the ground since 2013 – until recently. The 12.5-acre area was slated for mixed-use development and was once lauded to become the West Shore centre. Now, The Onni Group, who see potential in the city’s recent surge in housing demand, is bringing Colwood Corners back to life, Victoria Times Colonist reports.
Onni, which took control of the site in the fall of 2014, has submitted plans to Colwood that call for a complete community with 471 residential units and a significant complement of commercial space to be built out over five years.
The first phase would see three mid-rise residential buildings and 152,000 square feet of commercial space housing four anchor tenants, including a grocery store.
Phase 1 is expected to be complete in 2020.
In a statement, Onni development manager Rodney Rao said: “Colwood is a vibrant and active community; however, we have seen that demand has been exceeding current supply in the region. We’re looking forward to bringing new home-ownership opportunities to Colwood with a unique new live, work, play-style community that everyone can enjoy.”
Plans include pedestrian and cycling connections to the Galloping Goose, landscaped public spaces, play areas for kids and a new boulevard along Sooke Road.
Plans for additional phases at Colwood Corners are still undergoing review with Onni and Colwood.
Currently, the site is a large hole in the ground with concrete foundation work that has partially filled with water.
Hamilton said she has been told it will be a slow start, as the environmental cleanup will take some time.
“[The start] feels great, the community has been driving past that for years now, and it just needs to be completed,” she said, noting the company has done some debris cleanup at the site, and crews are dealing with the standing water.
Hamilton said the new development brings a lot to Colwood, not the least of which is adding to the tax base to pay for various services.
“But even more so, it brings the community together. With that in place, there’s the badly needed rental. It means housing options and perhaps a better selection of local shops,” she said.
The site has been idle since the spring of 2013, when League Assets had to stop construction. Now bankrupt and all but dissolved, League has since liquidated almost all of its assets.
TFN are making a strategic play by pressing pause on the marketing of the area’s 300 acres of land while they weigh their options. The site is one of the few available, vacant parcels of industrial land left in Greater Vancouver. Peter Mitham has the story.
Tsawwassen First Nation (TFN) often crops up in discussions of the shortage of developable industrial land in Metro Vancouver.
But an overhaul of TFN Economic Development Corp. following a review this spring has led to the temporary suspension of marketing efforts for the 300 acres slated for port-related industrial development.
“Now is the time to temporarily suspend the marketing of TFN industrial lands for long enough to properly assess what our future development goals should be, and how we can best realize those goals,” a statement TFN issued at the end of July said. “TFN lands are a limited resource, so it is essential that we carefully consider alternative development models to ensure we make well-informed decisions about the remaining 180 acres of unleased industrial lands.”
Developed in partnership with TFN Economic Development through long-term leases, the projects are intended to ensure long-term employment opportunities for Tsawwassen members. When fully built out, industrial developments will generate an estimated $245 million in annual income for TFN.
The largest project to date in the initial release of 100 acres is Delta iPort, a 57-acre venture of GWL Realty Advisors Inc. on behalf of Healthcare of Ontario Pension Plan (HOOPP). Smaller projects include facilities for Euro Asia Inc. (23.5 acres) and the Port of Vancouver (11.4 acres).
“When the TFN first started, they went with the lowest risk possible in terms of how the lands were developed,” explained Tom Fletcher, interim chief administrative officer for TFN. “The expectation all along was that at some point, before they went too far, they would take a look to make sure they were doing it right and maximizing the benefits to the community.”
TFN elected officials will have a greater role in setting long-term economic development goals and managing strategic initiatives in the future.
“We will continue to support our existing development partners who have already invested in the community, and look forward to proceeding with business as usual among established partners,” the statement said. “The interim board will serve to ensure there is no impact on … day-to-day operations during this transitional period.”
The federal government is applying to look into condo flipping taking place at the Marine Gateway project to ensure compliance with the Income Tax Act. Pre-sale contracts at the development are changing hands quickly, raising eyebrows around the prevalence of property flipping in the city.
In an emailed statement, Canada Revenue Agency (CRA) spokesman David Morgan explained the rationale behind the applications.
“In general, people who buy and resell homes in a short period for a profit may be engaged in property flipping. The CRA acquires and analyzes third-party data and uses this information to identify whether all income from property flipping is being reported correctly. The profits from flipping real estate are generally considered to be fully taxable as business income. The facts of each case determine whether such profits should be reported as business income or as a capital gain,” Morgan wrote.
Executive Group president Salim Sayani and Argo Ventures CEO Jason Hyunwoo Hong, owners of the numbered company, did not respond to Business in Vancouver’s requests for comment about the case.
The firms behind the Residences at West project at 1783 Manitoba Street began pre-sales for the first phase of the development in June 2012, featuring units starting at $294,900 for a one-bedroom, and up to $499,900 for a two-bedroom, with completion slated for 2014.
Units in the building are now worth considerably more.
For example, according to the BC Assessment Authority, as of July 2016, a one-bedroom unit on the top floor (1705-1783 Manitoba Street) was assessed at $816,000, up from $620,000 a year prior. (The BC Assessment Authority has assessments for 187 units and states that the building was completed in 2015.)
In a phone interview with BIV, PCI Developments Corp. president Andrew Grant said he didn’t know why the government was targeting the Marine Gateway.
“It is a high-profile project,” Grant said. “If they were trying to get some data or track some assignments of contracts between our purchasers and subsequent people that closed on the units, then maybe they feel that because it’s high-profile and it’s large, that it would be more efficient to look at a project like that.”
Grant said pre-sales at Marine Gateway began in March 2012 and closed about four years later. He said the company took steps to verify buyers’ information and restricted purchases to one unit per buyer, eschewing bulk sales and sales to corporate entities.
“We had criteria in 2012, which was probably several years before some of this controversy and profile around foreign buyers came about, but we had a process,” he said.
“Our bank and our lenders, at that time [in] 2012, were concerned about knowing the origins of where people were coming from and the funds being used to buy, so it was relevant to us and we did a good, thorough job.”
He said they had “nothing to hide,” but the company would disclose information only if ordered to do so by the court under the proper authority out of respect for buyers’ privacy.
“They’ve requested some information and we are not going to provide or disclose any information on our purchasers or the purchase contracts without being assured that they have proper authority to get that information. If they have to go to court to get that, then so be it, and if they get that authority, we will co-operate, but only to the extent we’re required to,” he said.