With the New Year comes a look-ahead with real estate news likely to have a lasting affect on 2017. In our first weekly buzz of the year, we take a look at BC Assessment’s 2017 commercial property values. The new values were released earlier this week and show an unsurprising increase on some of downtown Vancouver’s priciest pieces of real estate.
Rising property values can go hand in hand with rising property taxes – though not necessarily. Business in Vancouver explores the possibility of small businesses getting tax breaks in the wake of escalating values, while WI offers safe investment options for commercial investors.
Here is Western Investor’s media content roundup of the top stories covering what was new and notable in real estate this week.
Infographic: Pacific Centre BC Assessment's most valuable commercial property – Western Investor
Business properties in Greater Vancouver have risen in value up to 30 per cent. Multi-million (and in one case, billion) dollar retail and office centres continue to lead the pack as the highest-valued pieces of Vancouver real estate. Western Investor took a look at the ten priciest examples.
Vancouver’s top ten highest valued properties are mostly concentrated in the city’s downtown, with Pacific Centre shopping centre, office towers and Four Seasons hotel taking the top spot at over $1.77 billion, up nearly $150 million over last year’s value.
The top ten priciest properties include mostly large-scale retail centres and office towers, such as Oakridge Mall in south Vancouver and the Broadway Tech Centre buildings. The properties are the second and third-highest valued commercial addresses in Vancouver, respectively.
Commercial property values in Greater Vancouver increased between 15 to 30 per cent. BC Assessment's evaluation of Greater Vancouver includes Vancouver, the North Shore, Squamish, Burnaby, the Tri-Cities, Richmond and Surrey. The Fraser Valley saw an even greater increase bracket of 10 to 35 per cent.
Property tax relief for long-suffering small businesses in 2017 – Business in Vancouver
Small-business owners have cause for worry in the wake of BC Assessment’s new assessed values, as a rise in values could translate into a rise in property taxes, pushing businesses to close up shop. However, Business in Vancouver reported that city of Vancouver councillors are looking to ease the tax burden on businesses looking to get off the ground in 2017 and into 2018.
Vancouver councillors Raymond Louie and Geoff Meggs are working with the Urban Development Institute to rewrite legislation determining how small businesses are taxed.
By 2018, Sullivan said small businesses could see additional development potential exempt from taxes, or taxes based on the class at which they’re valued as opposed to current use. This would save businesses from paying non-residential tax rates on additional, unbuilt residential density attributed to the site.
“We’re going to impose new legislation in 2018 to save small business from skyrocketing land values in the city of Vancouver as a result of residential redevelopment pressure.”
In the meantime, Sullivan points out that property owners can appeal – a process his firm handles. BC Assessment notes that just 1% of property owners appeal each year.
Commercial real estate 2017 outlook: mixed-used developments the way to go – Western Investor
With residential real estate sales and development driving the investment boom in Vancouver in recent years, Western Investor believes that smart commercial investors should turn their sights (and wallets) on mixed-use developments. New developments in Vancouver’s office and retail market typically incorporate a residential component to draw in investors.
It is impossible to crowbar residential investors from the future of the commercial real estate sector in Metro Vancouver because it is the lowly homebuyer who has been driving commercial land and property deals to new levels.
For evidence one need only look at Metro commercial real estate transactions during the first nine months of 2016: sales of land for residential development accounted for 53 per cent of total volumes and dwarfed every other type of commercial real estate.
Add in the 109 sales of multi-family rental buildings and residential made up $5.8 billion of the total $9.5 billion in commercial transactions as of September 2016, a dominance that has characterized the Metro market for two years.
Yet the muscle of the homebuyer goes beyond these numbers.
Today, many commercial developments rely on a healthy mix of condominiums to make the numbers work, whether in office and retail projects and even, lately, in industrial and hotel developments.
Joyce-Collingwood rezoning sets area for transformation – Business in Vancouver
If you need anymore proof to back up our article on mixed-use developments, look no further than Business in Vancouver’s story on a potential 30-storey tower set to be built in the Joyce-Collingwood area. The development is causing the rest of the area to ponder other improvements and developments to existing real estate, including much-needed rental units.
“[Councillors] say that CACs are great for communities because we can build community centres, move libraries and improve parks,” said Arielle Yip, a member of the Joyce Area Residents Association.
“About the only thing we can do with $4 million is to create a dog park.”
She estimated that a new library would cost at least $10 million while a community centre would cost upwards of $15 million.
Even if sufficient CAC funding were included in the area’s revitalization, many residents do not want new tall towers to be built because they are concerned about traffic congestion and construction noise, Yip said.
The biggest concern, however, is that a slew of new towers will gentrify the area, push up rents and displace longtime residents and small-business owners – much like what is happening in Burnaby’s Metrotown neighbourhood.
Ong said the plan being developed by Saint Mary’s Parish reflects those community concerns.
“We want to be part of the solution by building 100% rental housing instead of more market condos,” he said.
"Anything we build will be rental units. We won’t be able to stratify the tower and sell it off.”
