Vancouver office tower confidently rises on Burrard Street without a single tenant in place | Chung Chow
If an urban planner were to design an environment for commercial real estate success, Metro Vancouver would fit the bill perfectly.
With a population of around two million big-spenders hemmed in by mountains, oceans, the U.S. border and decades of progressive politics that has frozen thousands of acres out of the market and stalled necessary development, there is nowhere better to make money in real estate.
And the data shows it.
Metro Vancouver has the lowest industrial real estate vacancy in North America and the highest leasing and strata costs in the country. The industrial land base has shrunk close to zero, driving land prices into the stratosphere.
In the multi-family sector, where rental construction is low, demand and rents are the highest in Canada. Sales of existing apartment buildings hit a record $1.6 billion through the first half of this year.
New condo apartments, meanwhile, are pre-selling for $2,000 to $3,000 per square foot at new Vancouver towers at Oakridge and downtown.
Despite the pandemic, confidence in downtown offices is so strong that developers are building giant towers without a single tenant signed on, and the biggest strata office offering sold out two years ago at more than $2,000 per square foot.
The retail sector, which should be suffering in a pandemic, has been buoyed by Metro consumer spending that is rising faster than anywhere else in Canada. Even in the worst streets in the region, the notorious Downtown East Side, retail sites sell for the equivalent of $10 million an acre and retail strata sells at up to $800 per square foot. When the province bought skid row hotels in the area this spring, it paid up to $327,000 per door.
Yet, while the opportunity to profit from a captive market appears legendary, Metro Vancouver real estate developers must be wily to make it all work.
Serviced industrial land has virtually disappeared in Metro Vancouver. Developers are now looking east to areas like Chilliwack and Abbotsford, even Mission, for raw land. With 150,000 acres locked in the 40-year-old Agricultural Land Reserve, industrial developers and owner-occupiers are paying tens of millions per acre for brownfield parcels and turning to questionable sites for construction.
This year investor Veramax Holdings paid $44 million for a 2.5-acre industrial site in North Vancouver and biotech firm AbCellera paid $38 million for two acres of East Vancouver industrial land.
Beedie, B.C.’s largest industrial developer, has been struggling for six years to turn 163 acres of a Delta peat bog into an industrial park, a plan that has raised protests from environmentalists and huge infrastructure costs.
In Richmond, a 170-acre waste landfill is being converted into a $300 million industrial park by Montrose Property Holdings. The resulting Richmond Industrial Centre will include up to 14 buildings ranging from 100,000 square feet up to 500,000 square feet when completed.
The payoff could make it worthwhile. The second quarter of 2021 marks the fourth consecutive quarter of no industrial vacancies in the 100,000-square-foot segment across Metro Vancouver, with the largest vacancy being 47,495 square feet, according to Colliers.
Industrial space now leases for an average of $14.88 per square foot, up 13.7% from a year ago and the highest in Canada. Suburban industrial strata space is selling for an average of $488 per square foot, but that price can more than double in Vancouver or the North Shore.
There is some debate about how many workers will return to the office this September, and the office vacancy rate is rising, but downtown developers appear giddily bullish on the future.
There is 3.3 million square feet of office space under construction in Vancouver’s downtown, including three towers scheduled to open from this year to 2024 that have no tenants in place. A 215,000-square-foot, 25-storey office tower set to open this fall has signed only one tenant, which has taken just 27,000 square feet.
Still, reports Avison Young, 61% of all the new office lease space now under construction to the end of 2023 is pre-leased.
In its mid-year 2021 office report, the agency summed up the core confidence.
“Despite a significant increase in vacancy, the overall market performed quite well through the pandemic with very few tenant defaults or lease terminations or developers abandoning development projects,” the report noted. “An increase in new supply may actually provide a short-term benefit for the market and stimulate leasing activity and accelerate the recovery.”
Metro Vancouver saw a multimillion-dollar shopping spree by investors snapping up retail assets this year before the province began to lift restrictions on store openings July 1. But, for many retailers, the traffic had already returned, according to a Cushman & Wakefield study.
“Google data shows that, as of the end of June, Metro Vancouver was just 3% below normal traffic for destinations including restaurants, cafés [and] shopping centres,” the agency reported July 28.
Its Marketbeat report also noted that at least 10 notable brands, including Athleta, Dollarama (TSX:DOL), Herschel Supply Co., Lucid Motors (Nasdaq:LCID), Nike (NYSE:NKE) and Peloton (Nasdaq:PTON), had all either expanded or opened retail outlets in Metro Vancouver while restrictions were still in place.
May Metro Vancouver retail sales, at $3.7 billion, were up 34.5% from the same month a year earlier. This is the largest year-over-year increase of any city in Canada, according to Statistics Canada.
Bricks-and-mortar retail investors have been piling into the Metro Vancouver market for months.
On May 12, the 42,000-square-foot Nordel Centre shopping centre in Delta sold for $21.3 million, nearly $3 million over its BC Assessment value, reported the Fraser Elliott Group, which brokered the deal.
Other big sales in the first half of this year included the 81,000-square-foot Lougheed Super Centre in Coquitlam, bought in a share-sale worth $42 million; and an assembly of three retail properties on Victoria Drive at East 49th in Vancouver, totalling 45,257 square feet, that sold for $42.5 million.
In the second quarter, Skyline Real Estate Investment Trust paid $31.4 million for a 71,800-square-foot Abbotsford shopping centre; and a private investor bought the 34,781-square-foot Rodeo Square in Surrey for $23.3 million.
There has also been an increasing number of storefront retail assets and strata retail sales across the City of Vancouver, based on Western Investor Done Deals listings.
“Economic recovery is ramping up in Metro Vancouver and can be expected to gain significant momentum through the second half of 2021,” the Cushman & Wakefield Marketbeat report concluded. •
US real estate heir Robert Durst convicted of murdering friend – Al Jazeera English
A California jury has found multimillionaire real estate heir Robert Durst guilty of murdering his longtime friend Susan Berman in 2000, the first homicide conviction for a man suspected of killing three people in three states over the past 39 years.
Durst, 78 and frail, will likely die in prison as the jury also found him guilty on Friday of the special circumstances of lying in wait and killing a witness, which carry a mandatory life sentence. Superior Court Judge Mark Windham, who oversaw the trial, set a sentencing hearing for October 18.
The trial came six years after Durst’s apparent confession was aired in the HBO television documentary series The Jinx, in which Durst was caught on a hot microphone in the toilet saying to himself, “What the hell did I do? … Killed them all, of course.”
The nine-woman, three-man jury had deliberated for seven and a half hours over three days for Friday’s decision. Durst, who has been in jail for the duration of the trial, was not present for the reading of the verdict because he was in isolation after having been exposed to somebody with COVID-19.
Windham decided to have the verdict read in Durst’s absence. Speaking to lawyers for both sides later, he called the case “the most extraordinary trial that I’ve ever seen or even heard about”.
Lead prosecutor John Lewin, who had pursued Durst for years, credited The Jinx filmmakers Andrew Jarecki and Marc Smerling for their revealing interviews with Durst, telling reporters after the verdict: “Without them having conducted the interviews, we wouldn’t be where we are.”
In closing arguments, Lewin called Durst a “narcissistic psychopath” who killed Berman in an attempt to cover up the disappearance of his wife, Kathleen McCormack Durst, in New York in 1982.
Durst was only on trial for killing Berman in California, but prosecutors argued he murdered three people: his missing wife, Berman and a neighbour in Texas who discovered his identity when Durst was hiding from the law.
Despite long being a suspect in the disappearance of his wife, a 29-year-old medical student, Durst was never charged. Prosecutors said he killed her, then decided to kill Berman 18 years later because she had told others that she helped Durst cover up the crime. Berman, 55, was shot in the back of her head inside her Beverly Hills home.
Shortly after the verdict, the McCormack family issued a statement urging prosecutors in Westchester County, New York, to prosecute Durst.
“The justice system in Los Angeles has finally served the Berman family. It is now time for Westchester to do the same for the McCormack family,” the statement said.
Westchester County District Attorney Mimi Rocah reopened the case in May, shortly after taking office.
Her office issued a statement on Friday commending those involved in securing the conviction, but a spokesperson said the Westchester investigation “remains ongoing and we will have no further comment at this time”.
‘Sick old man’
Defence lawyers portrayed Durst, a cancer survivor who testified from a wheelchair wearing a baggy jail uniform, as a “sick old man”. But he withstood 15 days as a witness, nine of them under cross-examination.
During a 58-day trial spread over a year and a half, including a one-year delay due to the coronavirus pandemic, Durst testified that he discovered Berman’s murdered body when he went to visit her but did not call the police.
The prosecution also delved into the 2001 death and dismemberment of Morris Black, who was Durst’s neighbour in Galveston, Texas. A Galveston jury acquitted Durst of murder, even though Durst admitted he chopped up Black’s body and dumped it in Galveston Bay.
Durst said Black pulled a gun on him and was shot accidentally when the two men wrestled over the firearm.
Black’s death marked the second time Durst had a dead body at his feet, according to his testimony.
In both cases, Durst said he at first tried to call the 911 emergency number, but later decided against it, fearing nobody would believe he was not guilty.
Besides The Jinx audio, two other pieces of evidence appeared to damage Durst’s defence. One was the recorded 2017 testimony of Nick Chavin, a mutual friend who said Durst admitted to him in 2014 that he had killed Berman.
“It was her or me. I had no choice,” Chavin recounted Durst telling him.
Durst also admitted he authored a handwritten letter to Beverly Hills police with the word “cadaver” and Berman’s address, directing them to her undiscovered body. Durst had denied writing the note for 20 years.
Durst is the grandson of the founder of The Durst Organization, one of New York City’s premier real estate companies.
He long ago left the company, now run by his estranged brother Douglas Durst, who testified at trial and said of his sibling: “He’d like to murder me.”
Detached home in Toronto is attainable for $700,000 says real estate agent – NOW Toronto
The two-bedroom listing at 15 Beechwood is appealing to renovators and first-time home buyers
A detached home listed for just under $700,000 sounds too good to be true in the Toronto real estate market. The average price for a home in the city is at $1,000,008, the lowest it’s been since February, according to the Toronto Regional Real Estate Board (TRREB). Meanwhile the average for detached homes in the city is still hovering around $1.7 million, a full six figures more than the listed $699,900 price for 15 Beechwood in the Jane and Eglinton area.
According to WE Realty broker of record Odeen Eccleston that price may actually be attainable, even though similar lots on the street sold between $865,000 and $880,000 over the summer.
“We don’t have enough information yet about the condition inside the home,” says Eccleston. She adds that any potential buyers should consider booking a home inspector, especially since the listing is marketed to investors and renovators along with first-time buyers without providing any photos of the interior.
Listing agent Lino Arci of Re/MAX Hallmark Lino Arci Group Realty told NOW that the home is currently being rented, which is why photos of the interior have not been made available. He understands that the tenants will be moving out in a couple of weeks. He also adds that the house has been priced fairly, and is not purposefully priced hundreds of thousands below its value to spark a bidding war, a practice that buyers have been wary of in this heated market.
“If we get the asking price, they’ll probably sell it,” says Arci. “I always like to price it right on the money so we sell it quickly.”
The two-bedroom bungalow with a mutual driveway was already listed earlier in the summer, sitting on the market for 48 days before being taken off the market, which Eccleston says bodes well for buyers. Arci explains that the sellers were not happy with their previous real estate agent.
“These are older people,” says Arci. “Sometime a seller expects their agent to be there when they call them and take them through step-by-step. We’re a small team. We can do that.”
Eccleston adds that the bungalow resembles other common listings on the Toronto real estate market, where a home that has been in the family for nearly a century is finally being sold by the family or estate.
Several listings in the Toronto real estate market appeal to builders to tear down old dwellings and build modern new homes. But Eccleston warns buyers to do their math before considering such a venture. Building prices have risen to between $250 to $350 per square foot. On the lower end of the spectrum, a 2,000-square-foot home could cost $500,000 plus soft costs such as municipal permits, surveys and architectural plans, which could add up to upwards of $1.2 million when you add the purchase price. For comparison’s sake, a newly renovated home on the street sold in 2020 for $1.1 million.
But Eccleston says this house could appeal to buyers who have no interest to tear down and build anew, and instead just choose to buy the property cheaply and spend less to renovate the interior.
“Some people are paying more than that for 600-square-foot condos,” says Eccleston. “So they may be willing to put up the money to renovate a detached home that frees them up from paying condo fees.”
“Anyone thinking of getting into the marketplace, they should,” says Arci. “Rates are good. Just jump in.”
Special Feature: Safety net invaluable in current real estate market – Canadian Lawyer Magazine
Real estate has always been considered a high-risk area of practice, and in 2020, real estate reached its highest recorded portion of claims in the market. Running a successful law practice that deals in real estate comes with unique challenges and competition.
Lawyers must ensure that all internal processes are properly adhered to, but it’s not uncommon for experienced lawyers to accidentally overlook details.
This special feature from FCT highlights the benefits of E&O products in real estate practice.
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