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Sonder turns vacant office, multires into apartment hotels | RENX – Real Estate News EXchange

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IMAGE: Martin Picard is Sonder's co-founder and vice president of real estate. (Courtesy Sonder)

Martin Picard is Sonder’s co-founder and vice-president of real estate. (Courtesy Sonder)

The co-founder of apartment-hotel company Sonder says his firm is being approached by a growing number of landlords in Canada’s three biggest cities seeking to lease out vacant office and multiresidential spaces.

“I can see a lot more of those deals happening in the next few years,” Martin Picard, Sonder’s co-founder and vice-president of real estate, told RENX. “A lot more office landlords are reaching out to us to know whether or not we would have interest in taking over an office building and making it into a Sonder property.”

On the multiresidential front in Montreal, where the vacancy rate is about six per cent, “you can see developers are getting concerned about the lease-up of these properties,” he added.

Picard says Sonder is not trying to be opportunistic about the situation faced by some landlords. “We’re trying to see if we can be part of a solution right now,” he said, “but we are definitely seeing a lot more inbound interest, especially in the office front.”

Sonder’s model and its history

Aside from Montreal where Sonder has 230 units, Sonder has a Canadian presence in Toronto (with 122 units) and Vancouver (66 units). The company expects to add 500 to 700 units in Canada over the next year.

Worldwide, Sonder has 4,500 units and an additional 6,500 units that should come onto the market in the next 12 to 18 months.

The company is active in about 30 cities, 25 in North America. It also has facilities in London, Dublin, Madrid, Rome and Dubai and plans to open another four European markets this year.

Sonder got its start in Montreal in 2012, but moved its headquarters to San Francisco two years later. In December, Sonder agreed to establish a hub office in Montreal that will result in the creation of as many as 700 jobs by 2025, many in engineering, data science and AI. It currently has 120 employees in the city.

The decision came after the Quebec government agreed to provide the company with a $30 million loan through Investissement Québec.

Picard returned from San Francisco to lead the Montreal office.

How Sonder differs from Airbnb

Unlike Airbnb, Sonder is not a home-sharing platform. Sonder leases and manages all of its spaces, which Picard said allows the company to provide “a consistent experience throughout all of our properties.”

Most of Sonder’s portfolio consists of apartment units with a kitchen, living room and one or more bedrooms.

About 18 months ago, the company started adding hotels to its offerings. Today, about 10 to 15 per cent of its properties are hotels. “The objective is to have a more comprehensive offering for the guests.”

Most Sonder spaces have self check-in, 24/7 digital concierge services and no front desk, providing a contact-free experience Picard said is popular during the pandemic.

The Sonder app “guides the entire experience,” from check-in to accessing the unit to interacting with staff, he said. “It’s much more of a tech-enabled hospitality experience.”

Picard said commercial real estate may be the only real estate sector that will perform worse this year than last. Some office leases up for renewal will not be renewed, while others will be renewed with less space.

As tenants leave or downsize, the Sonder model of transforming spaces into apartments that can be licensed as hotels “becomes quite compelling for a landlord.”

Prefers to lease entire buildings

Sonder prefers to lease entire buildings, so it can control lobbies and other areas. As a result, smaller class-B office buildings are of greatest interest to the company, Picard said.

“There’s been a lot of outreach, both (from) large institutional groups and more local landlords,” he added.

For zoning purposes, in a city like Montreal it’s easier to transform office to hospitality than it is to go from residential to hospitality, he noted.

Sonder now has four buildings in Montreal, including the 53-unit Guerin Lofts on Drolet Street in the Plateau Mont-Royal area which opened in October. The five-storey building once housed a textbook publishing company.

Plans are to open another four properties in Montreal during 2021, including 150-unit properties downtown and in the Old Port in which it will operate the entire buildings.

Other Canadian cities

The company opened its first building in Vancouver last October, the 66-unit Sonder at Revival on Comox Street in the West End. Properties in Toronto included the refurbished Beverley Hotel on Queen Street West.

There are no current plans to expand to other Canadian cities: “We’re really just focused on making sure that we have more units in our top three cities right now. But nothing’s off the table.”

Picard says during the early days of COVID-19, Sonder’s occupancy fell to about 45 per cent compared to its traditional rate in the low 80s. Occupancy rates have since rebounded.

“We’ve probably done slightly better than a lot of the hotels out there,” in large part because of the contactless experience.  “You don’t really need to interact with other people and that’s something that resonates with people right now.”

Sonder guests are booking average stays of 10 days, compared to the previous four-day average, making its spaces with kitchens and living rooms more attractive.

Picard says Sonder is operating on a timeline that may see it go public at the end of 2022. However, “we’re still navigating a very volatile environment for our industry.”

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Hot real estate market sparks warnings to potential buyers as complaints to regulator double

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As home sales in the province continue on a dizzying trajectory, the province’s real estate watchdog and regulator are warning buyers to be wary of what they may be getting into.

The Real Estate Council of B.C. (RECBC) and the Office of the Superintendent of Real Estate said that in the first three months of 2021, they have seen an increase in inquiries and complaints.

Calls to the regulator were up 42 per cent over the previous year, while complaints, such as how offers were made and accepted, were double the number received in the same period in 2020.

“Buying a home is one of life’s biggest financial decisions. There are potential risks at the best of times, but with the added pressure and stress of the current market conditions, those risks are amplified,” Micheal Noseworthy, superintendent of real estate, said in a statement.

 

 

The Real Estate Board of Greater Vancouver says sales in the region have continued at a record-setting pace.

Residential home sales covered by the board totalled 5,708 in March 2021, up 126.1 per cent from March 2020, when the COVID-19 pandemic hit, and up 53.2 per cent from February of this year.

Rural and suburban areas have experienced the biggest spikes.

For the past two weeks, Jay Park has been in the middle of the buying frenzy.

He and his partner are trying to upgrade from their one-bedroom apartment to a two-bedroom condo or townhouse in Vancouver.

“I wish we had done this a month or two ago,” he said.

 

A condo tower under construction is pictured in downtown Vancouver in February 2020. (THE CANADIAN PRESS/Darryl Dyck)

 

Park put an offer on a $1-million condo, $4,000 above asking price.

“To entice the [seller], we put in a subject-free offer, but it wasn’t successful,” he said. “They accepted $110,000 over asking price that was also subject-free.”

The hot market has led to bidding wars. Some would-be buyers have even lined up outside for days to try to get a jump on a property.

Erin Seeley, the CEO of the council, is warning buyers to do their research and be aware of risks before making an offer.

“It’s really important that buyers have engaged with their lender before they’re making offers so they know how to stay within a reasonable budget,” she said.

Seeley said some of the complaints the council has heard from buyers is that they weren’t aware the seller has a right to take an early offer.

“And the seller was really in the driver’s seat about setting the pricing,” she said.

 

Demand continues to outstrip supply for housing in cities like Vancouver. (Rafferty Baker/CBC)

 

Aaron Jasper, a Vancouver realtor, advises clients to avoid cash offers and to include finance clauses even if it may mean they lose a deal.

“There’s a lot of frustration among buyers, feeling pressure to take some risk,” he said.

“You’re better to be delayed perhaps a year getting into the market as opposed to being completely financially ruined.”

Jasper also says realtors are limited in the advice they can give to clients on legal matters, home inspections, potential deficiencies with homes, and financing.

‘Caught up in the craziness’

Other tips from the council include seeking professional advice before making a subject-free offer or proceeding without a home inspection, and speaking to a professional to determine how market conditions may be affecting prices.

Meantime, people like Jay Park say they are still keen to buy. Park has more viewings scheduled and is optimistic.

“It’s a very exciting time for us, but I also don’t want to get caught up in the craziness and make a purchase that’s above our means.”

Source: – CBC.ca

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Black Press Media introduces one of Western Canada's best real estate platforms helping home buyers Find. Love. Live. that new home – Aldergrove Star

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Need an agent who knows the community?

Or, is it time to look for a new place to live, but you don’t know what’s on the market?

Whatever the real estate need is for residents in the communities of British Columbia, Yukon & Alberta, there’s a new way to do that one-stop shopping – by visiting Today’s Home.

The slogan for the site is “Find. Love. Live.”

“We want people to find their dream home, love it, and live in it,” said group publisher Lisa Farquharson.

Building on the success of Black Press Media’s niche digital platforms – Today’s Home brings the same wealth of knowledge and local expertise to the search for a home, be it buying, selling, or even just daydreaming about what changes you can make in the future.

Search hundreds of listings that local real estate agents have available.

The listings cover properties around the region, from a one-bedroom, one-bath condo for $339,900 to million-dollar acreages throughout the province of BC, Yukon, Central Alberta and beyond.

Click on a listing, and see not only the realtor handling the property sale, but links to his or her other listings and social media feeds. With the click of a mouse, take a virtual tour of the property, find the property’s walking score, and learn about nearby amenities.

There are links available to schedule a showing, or send the agent a comment or question.

Want to share a listing? When you click on the share button, you’ll actually send an attractive digital flyer of the prospective property, not just a link.

There’s even a button to help determine how much you have to spend, courtesy of the convenient mortgage calculator.

Plus, scroll down the page on Today’s Home and find a list of expert local real estate professionals who can answer questions or help with that home sale, Farquharson explained.

Today’s Home offers the advantage of the massive reach that Black Press Media has built throughout Western Canada with its network of community newspapers and online products. That allows the public to tailor real estate searches based on location, price, and other key factors while allowing real estate professionals to gain unprecedented audience reach with their listings.

Today’s Home will dovetail into the media company’s existing print real estate publications.

“Black Press Media has real estate solutions in print and now we can add in the digital component,” Farquharson said.

Watch for expansion of the Today’s Home platform in the near future, she added. That will come as Black Press Media adds a new component – the development community. Developers will be able to reach a huge audience when their projects are ready for presentation.

For information on Today’s Home, contact group publisher Lisa Farquharson at 604-994-1020 or via email.

Happy house hunting!

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PGIM Real Estate, Revera Affiliate Target UK Market in Newly Formed JV

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Real Estate Sales In September

PGIM Real Estate has been active in recent months providing capital to facilitate blockbuster senior housing acquisitions. Now the firm is looking to capitalize on demand for senior housing in the United Kingdom.

The Madison, New Jersey-based real estate investor and lender announced this week it is entering into a joint venture with Signature Senior Lifestyle, an affiliate of Revera, to develop and operate senior housing communities around greater London

Mississauga, Ontario-based Revera serves 20,000 older adults in long-term care homes and retirement residences in Canada. It is also the majority shareholder of Sunrise Senior Living, one of the largest senior housing providers in the U.S. The company operates a portfolio of 12 communities in the U.K. under the Signature Senior Lifestyle brand, with one community in development that is slated to open in autumn 2021.

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The JV has one development underway — a senior housing community, or “prime care” home, in southwest London. PGIM worked with Elevation Partners, a London-based investor and asset manager in U.K. health care real estate, in sourcing, structuring and executing the venture. Additionally, PGIM will retain the firm to leverage its expertise.

PGIM and Revera did not respond to requests for comment from Senior Housing News regarding details about its development pipeline.

London is emerging as a future hotbed of senior housing development, spurred by favorable demographic growth trends and a lack of available supply, and the PGIM-Revera venture will find competition.

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Maplewood Senior Living CEO Gregory Smith told SHN last month that demand for U.K. senior housing is comparable to major U.S. markets such as New York and San Francisco, where supply has historically been constrained.

Maplewood and its investment partner, Omega Healthcare Investors (NYSE: OHI) are looking to expand its luxury Inspir brand to the U.K., and identified five suburban markets around London with high barriers to entry that are favorable for the brand’s growth.

Revera CEO Tom Wellner sees similar untapped upside potential for senior housing in the U.K.

Source: – Senior Housing News

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