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Ruling that Burnaby real-estate deal was 'tainted by illegality' stands – Burnaby Now

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A Realtor involved in a Burnaby real estate deal “tainted by illegality” may not have been found guilty of conspiracy or fraudulent misrepresentation, but his actions were enough to prove that banning dual agency in the province two years ago was a good idea, according to the B.C. Court of Appeal.

Realtor Kevin Hien signed a dual agency agreement with both sides of a deal involving a 4.28-acre commercial property at 5502 Lougheed Hwy., currently the site of Revs Bowling Centre, right beside the Holdom SkyTrain station.

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The property is now worth about $86.6 million, according to the latest assessment, but in October 2011, its owners, Brentwood Lanes Canada Ltd., signed an agreement to sell it for just $28.8 million.

The buyer was a company called Pacific Success Management & Consultants Inc., owned by Xiao Dong Liu, a.k.a. Allen Liu – a businessman who owns two strip malls in Richmond and has been involved in various business enterprises in China, according to court documents.

Just before the deal was scheduled to close, however, it fell apart.

Brentwood Lanes announced it wasn’t going to go through with it.

The company argued the contract wasn’t enforceable because of wrongdoing by Liu and Hien, who was supposed to have been acting for both parties but who had withheld information from Brentwood Lanes about the development potential of its property.

But Liu and Hien said Brentwood Lanes was backing out because of seller’s remorse and launched a lawsuit to force the sale or get damages for breach of contract.

Brentwood Lanes launched a counter claim, accusing Liu and Hien of lying and conspiring to keep Brentwood Lanes in the dark about a zoning change that would substantially increase the value of the property.

In a B.C. Supreme Court ruling last May, Justice Andrew Mayer dismissed the breach of contract claim, ruling the deal was unenforceable because it had been “tainted by illegality” by actions on both sides.

He found Hien had breached his fiduciary duty as Brentwood Lane’s Realtor, but he also dismissed the claims of conspiracy and fraudulent misrepresentation against him and Liu, saying there hadn’t been enough evidence to prove there had been an agreement between the two to withhold information about zoning changes from Brentwood Lanes.

Both parties appealed Mayer’s ruling, but those appeals were both dismissed in a unanimous B.C. Court of Appeal ruling this month.

Justice John Hunter had this to say about the claims of conspiracy and fraudulent misrepresentation against Liu and Hien:

“This claim, though unmeritorious in this case, demonstrates the wisdom of the decision of the Superintendent of Real Estate to ban dual-agency agreements except in narrow circumstances relating to service in remote locations.”

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Real estate market sees 'thaw' in Langley – Aldergrove Star – Aldergrove Star

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The sale of homes started to increase in Langley in May as restrictions prompted by the coronavirus slowly eased, but numbers were still down sharply from last year.

“Everything’s now thawing,” said Ty Corsie, a local realtor.

He said that 60 days ago, it was like the entire local real estate market was frozen, but now things are starting to move again as buyers and sellers adjust to the new normal.

According to data from the Fraser Valley Real Estate Board (FVREB) 59 single-family homes changed hands in Langley last month, down 32.2 per cent from the same month in 2019.

There were 52 townhouses sold, down 38.8 per cent, and 50 condos sold, down 38.3 per cent from a year before.

The numbers were comparable to sales volumes seen in January, traditionally one of the slowest months for real estate in the year, when 49 houses, 47 townhouses, and 46 condos were sold in Langley.

But Corsie noted that both buyers and sellers are re-entering the market. His firm listed six homes for sale this week alone, much more than they normally would. It looks like a delayed spring, he said, with people trying to make up for time lost in March and April.

Despite the overall low sales numbers compared to last year, Langley was faring better on average than many of its neighbours.

Overall, the Fraser Valley region saw a 46.9 per cent decline across all home types in communities running from North Delta through to Abbotsford. There were 805 home sales, down from 1,517 the year before.

Local sales also represent a significant improvement from April, when sales in Langley were down by 50 per cent.

READ MORE: Coronavirus hammers Langley housing market

Prices remained stable, with the price of a single-detached house in Langley still hovering near $1 million, where it had been for some time. The Canada Mortgage Housing Corporation has predicted that Canadian house prices will decline this year and the next, anywhere between nine and 18 per cent.

The benchmark prices for townhouses and condos were also up slightly in May compared to a year ago in Langley.

Corsie said a big part of the increase has been the creation of a “new normal” that allows people to see houses again. People are wearing gloves and masks to visit homes before signing contracts.

The pandemic and the physical distancing restrictions have made things more difficult for younger realtors, Corsie said.

Experienced realtors can rely on referrals from previous clients and a deep list of contacts. Younger realtors starting out have to build up those contacts through promotional materials, open houses, and face-to-face contacts.

“Meeting people face-to-face is a huge part of the business,” he said.

With open houses and door knocking essentially impossible, the last two months have seen a lot of young realtors without work. He’s hopeful that will change as the market picks up.

“Realtors and consumers deserve to be congratulated,” said FVREB president Chris Shields. “It’s not easy to adapt quickly to physical distancing, virtual tools and strict personal safety protocols and yet we’re seeing more and more transactions happening daily as we all get more comfortable and confident with the new normal.”

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Commercial real estate won’t be a distressed asset: Marcus & Millichap CEO – Yahoo Canada Finance

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<p class="canvas-atom canvas-text Mb(1.0em) Mb(0)–sm Mt(0.8em)–sm" type="text" content="The novel coronavirus pandemic forced offices and retailers to shift operations online over the past three months — leading some to speculate that demand for commercial real estate will drop, sending prices plummeting.” data-reactid=”16″>The novel coronavirus pandemic forced offices and retailers to shift operations online over the past three months — leading some to speculate that demand for commercial real estate will drop, sending prices plummeting.

But most commercial properties will not be selling for massive discounts, according to Hessam Nadji, CEO of Marcus & Millichap, a California-based national commercial real estate brokerage.

“There’s a broad brush sentiment that commercial real estate is going to get distressed pricing across the board and that is just not the case,” Nadji told Yahoo Finance. Apartments and warehouses, in particular, are performing “very well.” 

<p class="canvas-atom canvas-text Mb(1.0em) Mb(0)–sm Mt(0.8em)–sm" type="text" content="As Americans shelter in place, demand for apartments and condos have remained stable. Some 41.4% of investors reported multifamily acquisitions in their market in May compared to 33.6% in April, according to a monthly survey of almost 500 members in the NAIOP (National Association of Industrial and Office Properties) Commercial Real Estate Development Association conducted May 18-20.&nbsp;” data-reactid=”19″>As Americans shelter in place, demand for apartments and condos have remained stable. Some 41.4% of investors reported multifamily acquisitions in their market in May compared to 33.6% in April, according to a monthly survey of almost 500 members in the NAIOP (National Association of Industrial and Office Properties) Commercial Real Estate Development Association conducted May 18-20. 

And a surge in online shopping during the pandemic has upped warehouse demand for last-mile delivery. Warehouse acquisitions increased to 58.7% in May from 54% in April, according to the NAIOP.

Commercial real estate has a history of resilience, said Nadji. The commercial market suffered for 18-24 months after September 11, 2001, as employers feared bringing employees into central business locations. But within a few years, office leasing behavior returned to normal, said Nadji, who expects the same resilience within two to three years, depending on the degree of economic growth.

Workstations in empty office
Workstations in empty office

“We’ve seen from many companies, including IBM, that experimented heavily with telecommuting, that they eventually want to bring people back at least a few times a week to work in groups and be in person and have collaborative functions that bring people together in office locations,” said Nadji.

<h3 class="canvas-atom canvas-text Mb(1.0em) Mb(0)–sm Mt(0.8em)–sm" type="text" content="Hospitality and retail underperform” data-reactid=”34″>Hospitality and retail underperform

But properties that house hospitality or retail are a “whole different story,”  he said, and could offer some “opportunistic investment situations.” Led by a few of these underperforming asset classes, commercial real estate properties had a 2.29% delinquency rate on mortgage loans in April, up from 2.07% March — its largest jump in three years, according to New York-based Trepp Research’s CMBS Delinquency Rate, which measures mortgage ayments that are late for more than 30 days. 

<p class="canvas-atom canvas-text Mb(1.0em) Mb(0)–sm Mt(0.8em)–sm" type="text" content="With the country under lockdown, traveling virtually ceased during the pandemic. Hotel demand was down 42% in April compared to last year, prompting some 2.71% of hotels and motels to default on their loans in April, compared to only 1.53% in March. Commercial real estate suffered its highest jump in delinquencies in three years, but lodging had the highest uptick of all property types, according to Trepp Research.” data-reactid=”36″>With the country under lockdown, traveling virtually ceased during the pandemic. Hotel demand was down 42% in April compared to last year, prompting some 2.71% of hotels and motels to default on their loans in April, compared to only 1.53% in March. Commercial real estate suffered its highest jump in delinquencies in three years, but lodging had the highest uptick of all property types, according to Trepp Research.

The cities where commercial real estate will take the biggest hit are service-based hospitality economies, including Atlantic City, N.J., Myrtle Beach, S.C., Las Vegas, Nev., Fort Walton Beach, Fla. and Wilmington, N.C., according to MillionAcres, a real estate investing branch of the Motley Fool, an investing advice company based in Alexandria, Va. 

<p class="canvas-atom canvas-text Mb(1.0em) Mb(0)–sm Mt(0.8em)–sm" type="text" content="With less investor demand for retail space, opportunistic investors could also find deals on vacant storefronts. Some 13.4% of NAIOP members said they had witnessed retail deal activity in May, unchanged from activity in April but significantly down from before the pandemic, according to the NAIOP. Notably, retail spaces with grocery stores are proving resilient, according to CrowdStreet, a Portland, Ore.-based investing platform.&nbsp;” data-reactid=”38″>With less investor demand for retail space, opportunistic investors could also find deals on vacant storefronts. Some 13.4% of NAIOP members said they had witnessed retail deal activity in May, unchanged from activity in April but significantly down from before the pandemic, according to the NAIOP. Notably, retail spaces with grocery stores are proving resilient, according to CrowdStreet, a Portland, Ore.-based investing platform. 

<p class="canvas-atom canvas-text Mb(1.0em) Mb(0)–sm Mt(0.8em)–sm" type="text" content="While there will also be a short-term reduction in interest in city-based offices, suburban satellite offices may become more popular, said Nadji. Long-term, experts expect the office to remain an attractive investment.” data-reactid=”39″>While there will also be a short-term reduction in interest in city-based offices, suburban satellite offices may become more popular, said Nadji. Long-term, experts expect the office to remain an attractive investment.

“Those kinds of things [a shift toward decentralized locations], I think, will last, and will have a residual effect, but the demise of office space used as kind of a broad statement, I think, is over-exaggerated,” said Nadji.

<p class="canvas-atom canvas-text Mb(1.0em) Mb(0)–sm Mt(0.8em)–sm" type="text" content="Sarah Paynter is a reporter at Yahoo Finance. Follow her on Twitter&nbsp;@sarahapaynter” data-reactid=”45″>Sarah Paynter is a reporter at Yahoo Finance. Follow her on Twitter @sarahapaynter

<p class="canvas-atom canvas-text Mb(1.0em) Mb(0)–sm Mt(0.8em)–sm" type="text" content="Read the latest financial and business news from Yahoo Finance” data-reactid=”46″>Read the latest financial and business news from Yahoo Finance

<p class="canvas-atom canvas-text Mb(1.0em) Mb(0)–sm Mt(0.8em)–sm" type="text" content="Follow Yahoo Finance on&nbsp;Twitter,&nbsp;Facebook,&nbsp;Instagram,&nbsp;Flipboard,&nbsp;SmartNews,&nbsp;LinkedIn,&nbsp;YouTube, and&nbsp;reddit.” data-reactid=”47″>Follow Yahoo Finance on TwitterFacebookInstagramFlipboardSmartNewsLinkedInYouTube, and reddit.

<p class="canvas-atom canvas-text Mb(1.0em) Mb(0)–sm Mt(0.8em)–sm" type="text" content="More from Sarah:” data-reactid=”48″>More from Sarah:

<p class="canvas-atom canvas-text Mb(1.0em) Mb(0)–sm Mt(0.8em)–sm" type="text" content="The office apocalypse is not here, yet” data-reactid=”49″>The office apocalypse is not here, yet

<p class="canvas-atom canvas-text Mb(1.0em) Mb(0)–sm Mt(0.8em)–sm" type="text" content="People are still paying rent during the coronavirus pandemic” data-reactid=”50″>People are still paying rent during the coronavirus pandemic

<p class="canvas-atom canvas-text Mb(1.0em) Mb(0)–sm Mt(0.8em)–sm" type="text" content="Bidding wars start to heat up in some states as coronavirus lockdown eases” data-reactid=”51″>Bidding wars start to heat up in some states as coronavirus lockdown eases

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Real estate sales show signs of 'uptick' – Times Colonist

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The province’s phased-in approach to restarting the provincial economy seems to have had an effect on the Victoria real estate market.

Figures released Monday by the Victoria Real Estate Board show sales, inventory and some prices rose in conjunction with the second phase of the provincial restart plan.

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Last month, 457 properties changed hands in the region, and while that’s a 46 per cent drop from May of last year, it’s a big jump from the 287 homes sold in April.

“We are still down in terms of sales [year-over-year], but we were up from April, and we saw a real uptick after May 19, when Phase 2 was implemented,” said Sandi-Jo Ayers, president of the board. “We are feeling cautiously optimistic based on the numbers from last month. And our home prices have seen a slight increase from last month as well.”

There were 2,544 active listings for sale at the end of May, up from the 2,305 available at the end of April. That is still well off the more than 3,000 available in May last year.

The benchmark price of a single-family home in the Victoria core last month was $885,400, up from $884,600 in April. Year-over-year, however, the price was down from $863,000. The benchmark condominium price in the core last month was $534,300, up from $533,600 in April, and $516,400 in May 2019.

“I’d say we have seen a trickle of activity, not a tsunami. People are being cautious,” said Ayers, who noted buyers want to ensure they are employed and that they can qualify for the kinds of homes they want.

Indications are Victoria’s real estate market could avoid some of the pain other markets in Canada will face this year, she said. “We believe the way B.C., the Island and the community have responded to the health crisis and our market being local, [real estate] has responded in a healthy way as well here,” she said. “Victoria is such an attractive place to live, it’s safe and the way we responded to this health crisis is catching people’s eye and they may start to think this is a good place to retire or move.

“We firmly believe we are on the radar now.”

The short-term outlook is likely to remain cautious, but Ayers said they expect to see a lot of local movement ahead of the fall school opening, and with local buyers moving up and down in the market.

aduffy@timescolonist.com

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