Perched over a harbour across from the bright lights of Vancouver’s city centre, a massive new residential development is pushing the boundaries of what it means to be climate resilient.
The development, called North Harbour, is being built by developer Concert Properties in North Vancouver to a set of novel standards that will mitigate against sea level rise and storm surge.
The new requirement is for the project to be raised 4.5 metres above sea level, well over a metre above the previous requirement. None of the building’s mechanical equipment will be installed below ground, which is the norm, to prevent damage from flooding.
“I think with this site, we really were on the leading edge of thinking about what the next chapter of planning for sea level rise looked like in British Columbia,” says Michael Epp, the director of planning for the City of North Vancouver.
The North Harbour project is a prominent example of a paradigm shift in civic planning to make cities and communities more weather-resistant. The storm that barrelled through Atlantic Canada last weekend swallowed homes in its fury, and was just the latest reminder of the power of nature to eat away at coastlines in the blink of an eye.
Because of climate disasters, insurers, municipal governments, developers and ordinary Canadians are waking up to the real cost of inaction.
A report released today by the Canadian Climate Institute concludes that damage from climate change will take a $25 billion bite out of the economy each year. Then there are costs to health, jobs and overall wellbeing, all of which will suffer as “heat-induced productivity losses and premature deaths shrink the workforce,” the report finds.
In other words, climate change takes a toll not just on the economy, but also on our overall health and well-being.
For city planners in North Vancouver, the flooding that washed out much of Calgary in 2013 was their teachable moment. It forced them to rethink how to deal with rising water and to plan ahead for climate scenarios all the way to the end of the century.
But the unfortunate reality, says Jesse Keenan, a professor of real estate at Tulane University in New Orleans, is that it often takes a disaster where you live to make change happen. The other problem is that information that would otherwise help make better decisions is simply lacking.
“One thing we don’t know in Canada very much about is the benefits of investing in flood mitigation,” says Jason Thistlethwaite, an expert in climate adaptation at the University of Waterloo.
His research has found that just six per cent of residents who live in flood-risk areas know they do, and the majority, 81 per cent, have not reviewed their local flood area maps.
“It’s difficult to imagine a property owner who’s desperately seeking a house to prioritize something like flood risk over, let’s say, a granite countertop or various fixtures in their home,” he said.
But the importance of getting a clear climate risk picture is becoming just as obvious as a home inspection or a study of an apartment’s sightlines.
In the United States, at least $108 billion in real estate valuation is at risk of literally going underwater, according to Don Bain, a senior advisor at Climate Central, a non-profit that looks at the impact of climate change on people’s lives.
“By mid-century,” he concludes in a recent report, “more than 648,000 individual tax parcels, totalling as many as 4.4 million acres, are projected to be at least partly below the relevant tidal boundary level.”
The world is starting to appreciate that there is a financial and health cost associated with polluting the atmosphere with reckless abandon.
“We’re at a phase where the capital markets are really beginning to understand this as a risk,” says Spenser Robinson, a professor of finance and real estate at Central Michigan University.
Large regulatory bodies like the U.S. Securities and Exchange Commission, he says, are proposing more stringent disclosure laws so that people understand the dangers associated with a range of financial products, including real estate.
But climate-risk factors, Robinson says, have yet to trickle down to the general investor level, and they need to.
“Right now, this is kind of some opaque black box concept that the average consumer can’t really understand.”
To address that, some real estate firms are starting to flag climate risk much like they do walkability scores.
For example, realtor.com has started putting environmental risk scores on some of its home listings.
Then there is artificial intelligence, which is being used to assess climate impacts on real estate valuations.
Parag Khanna, an entrepreneur and author who has written extensively on migration, argues that a warming planet is completely changing the calculus of where people are choosing to live.
His latest venture is a platform – Climate Alpha – powered by artificial intelligence that makes cutting-edge predictions on property valuations based on climate risks and other factors.
Machine learning, Khanna says, can take into account a range of data points, from climate forecasts, to immigration patterns, to the availability of land. These data can then be used to assess property prices in ways that financial data and models simply can’t compete with.
For example, new AI-powered modelling tools can look at how much property prices have been going up or down in a given property market over a period of time, and calculate where those valuations will go in the coming years based on a variety of climate risk calculations and migratory patterns, Khanna says.
Retirees Joan and Rob Boras recently moved to BC’s Okanagan Valley from Alberta, and decided to build their home in the most environmentally sustainable way possible. But part of their motivation was also to ensure their home was resilient, given the hotter summers and more intense wildfire seasons.
“You can’t bury your head in the sand anymore,” Joan Boras told Global News from Naramata, B.C.
They didn’t need advanced technology or fancy financial models to tell them they needed to look climate change straight in the eye.
“You’ve got to look, and when you look, you’ve got to think, ‘OK, what is this area prone to? What are the things that happen?’ We knew it was fires out here. You know that,” Joan says, emphasizing that, “We’re not super wealthy by any means.”
They did their homework and found a contractor who understood the mission. They deliberately picked a lot that was away from the forest edge, and are using a range of energy-efficient and fire-resistant products and technologies to reduce their home’s impact on the environment and make it more resilient.
But this kind of forward-thinking innovation by ordinary homebuyers is still more of an exception than the rule. Information, however, is starting to trickle down to the average person, and that means there will be more demand to build differently.
A study led by UBC researcher Markus Baldauf found that flood-prone homes in communities where there is strong acceptance of climate change sell for less than in those communities where climate change is not taken as seriously. In other words, if you know about the climate risk, you’re not going to pay as much for your property.
“The more information we get out there, the greater response we see among buyers and sellers,” Keenan says.
The most forward-thinking municipalities know that as well: getting ahead of climate risk means more investment, not less.
“In the future,” says Jason Thistlethwaite, “we’re going to be looking at municipalities who are recognized for being climate resilient, and their property values are going to go up because people are going to want to live there.”
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A nearly $890 million replacement project for Duncan’s Cowichan District Hospital has taken a major step forward as land clearing at the Bell McKinnon Road site begins.
Initially scheduled for 2021, the North Cowichan property near the intersection of Herd Road and the Trans Canada Highway is being cleared this month ahead of a construction start planned for 2023, pushing the hospital’s completion target to 2027 after some three and-a-half years of building.
A landmark condominium project coming soon to Esquimalt’s Gorge Waterway is now selling one, two and three-bedroom residences with ‘junior’ floorplan options.
Central Block, from Victoria-based developer Abstract Developments, is comprised of 99 suites at pricing from $339,900. Nearly 40 per cent of Central Block’s inventory is priced below $500,000 and over 80 per cent of homes are available from under $750,000.
Slated to begin construction next March, the six-storey Central Block will rise in the former location of the Gorge Pointe Pub opposite Gorge Park’s Tillicum Road entrance, offering unimpeded views of the picturesque Gorge Waterway from many homes, and park, city and urban canopy views from most units.
BC Housing has started work on the last of six facilities announced in the spring of 2021 to house individuals in the Capital Region experiencing homelessness or who may be at-risk of homelessness.
As construction winds down on five buildings in Victoria, Saanich and Central Saanich, crews have begun preliminary work on a 56-unit complex at 953-959 Balmoral Road in Victoria’s North Park neighbourhood.
The five-storey low-rise will be operated by the Cool Aid Society as permanent housing with support services, and is scheduled for occupancy in 2023.
Collectively, the six builds will contribute nearly 300 permanent supportive homes as part of a provincial plan to address homelessness in the Capital through the creation of 24/7-managed housing solutions.
A nearly 100-unit rental proposal is in motion from telecommunications giant TELUS and Victoria-based Aryze Developments for several parcels at Feltham Road and Tyndall Avenue in Gordon Head.
Planned for 1805-1811 Feltham Road, TELUS and partner Aryze are working to redevelop a TELUS network facility into TELUS Living, a five-storey, purpose-built rental project that would provide high density housing to Gordon Head in addition to network infrastructure for the telecom.
Although the proposed building height and density are a departure from the immediate area’s built form, a document drafted by Aryze’s Director of Development, Chris Quigley, for the District of Saanich and the local community describes the effort as taking “an existing public utility site and [transforming] it into a much-needed rental housing development while also continuing to deliver critical telecommunications infrastructure.”
A 488-unit rental project envisioned for the 100-block of Gorge Road East in the Burnside Gorge neighbourhood could also include a significant public realm improvement along the Gorge Waterway.
Proposed for 129-135 Gorge Road East, property owner Belmont Properties and partner Intracorp Projects have unveiled plans for a five-building redevelopment of the Oxford Motel (turned rental complex) and three rental blocks known as the Gordreau Apartments. The existing density totals 200-units, and is described by the proponents as nearing its end-of-life.
Belmont and Intracorp, along with architectural firm IBI Group, have designed a two-phase masterplan that will deliver 488 new residential units on the land, padding the City of Victoria’s rental housing stock by 288 net rental homes.
Victoria-based Alpha Project Developments has proposed its latest residential investment in the James Bay neighbourhood’s legislative precinct.
Planned as a seven-storey complex at 475 Kingston Street, the lowrise will include approximately 60 up-market condominium suites in one, two and three-bedroom configurations, along with ground oriented, family-sized layouts.
The majority of the property is presently a surface parking lot, as is an expansive province-owned parcel immediately to the east known as the ‘Q-Lot,’ currently planned as future office space for government ministries.
A boutique pre-sale comprised of seven three-bedroom plus-den townhomes is coming soon to Victoria’s Fairfield neighbourhood.
Known as Seven by Aryze, the offering represents an evolution in design from a firm known for its innovative, market-leading infill projects, at a time when ‘missing middle’ housing is top of mind among urban homebuyers.
Situated at 931 McClure Street – a quaint no-through lane between Vancouver and Quadra streets – Seven’s location is within short walking distance to the heart of downtown Victoria, Cook Street Village, and the Dallas Road waterfront.
Mike Kozakowski is with Citified Media and can be reached at mailto:firstname.lastname@example.org
For small businesses hoping to establish or expand their brick-and-mortar presence, it may seem like a bad time to sink cash into a commercial property purchase.
Amid predictions of an upcoming recession, the U.S. Federal Reserve increased the federal funds rate for the sixth time in 2022, citing inflation risks and global conflict. Inevitably, this will make loans more expensive for borrowers.
In reality, though, the perfect time to buy commercial real estate doesn’t exist. And when you consider the bigger picture, not all signs point to doomsday.
“There are still really amazing opportunities out there, but I think it really requires small-business owners to think about what their goals and their plans are,” says Alyssa Dangler, a commercial real estate attorney and president-elect of Commercial Real Estate Women Network.
Here’s what small-business owners should consider when deciding whether to purchase commercial real estate.
COST OF BORROWING
While higher interest rates might not make or break a deal, they could push business owners to cut the size of their down payments or reduce spending elsewhere to accommodate larger monthly payments. Small-business owners waiting for interest rates to fall might be in a holding pattern for longer than they expected, though. According to the Federal Reserve, future fed rate hikes are likely.
However, today’s interest rates don’t seem as astronomical when you look at rates throughout history, Dangler says. For instance, the annual average rate for a 30-year fixed-rate mortgage was 8.39 per cent in 1992 and 16.04 per cent in 1982. This year’s average currently stands at 5.08 per cent.
Some entrepreneurs, like Elaina Paige Thomas, owner of Next Paige Talent Management and Production, are choosing to move forward despite rising rates.
“It didn’t scare me because I know that we can always refinance down the road,” Thomas says. “It’s still going toward ownership and equity, so for me, that was always the goal.”
Buying commercial property becomes more complicated if construction loans are involved. Interest rates for this type of financing are typically variable, leaving plenty of opportunity for rates to climb over the duration of the project.
To mitigate the risk of a business being unable to afford costlier future payments, Dangler explains, lenders may ask borrowers to purchase an interest rate cap. While this safety net ensures their rate won’t exceed a set limit, it’s also an additional cost.
Understand and prepare for these added costs before moving forward with a real estate deal. If you’re concerned about stretching your finances too thin, consider looking at buildings that don’t require major renovations, or scale back the scope of the project to only the essentials.
YOUR BUSINESS’S GROWTH STAGE
Typically, more mature businesses have capital and a strong understanding of their growth trajectory. These factors, plus time in business and more established credit, make for a more appealing loan application — and likely a better interest rate.
On the other hand, startup businesses may want to consider leasing before buying right away, suggests Max Grover, president-elect of Commercial Alliance of Realtors West Michigan. As opposed to more established businesses, he says, some startups might see better returns putting their cash toward inventory, equipment, hiring or marketing. Additionally, leasing gives them more flexibility to move locations if they grow.
Connecting with a commercial real estate agent or broker who specializes in a particular type of property can help buyers weigh their options.
“It helps to have your own representation so that your interests are pursued,” says Barbi Reuter, CEO, chairman and designated broker of Cushman & Wakefield ‘ PICOR, a commercial real estate firm. “You want to have the expertise to move at the right time.”
In particular, they can help small-business owners narrow down their options, compare buy-versus-lease situations, run calculations and navigate market changes, she adds. They can also look into commercial zoning laws that determine which types of businesses can occupy the property and how it can be used.
Factor in the market conditions for your particular industry and geographic region before committing to a space. Property demand may vary from sector to sector, which dictates how much competition you’ll face and, subsequently, how much negotiating power you’ll have.
Depending on your business type, Reuter suggests finding out where your customer base, suppliers or workforce are located, too.
“You really have to be super focused on what the dynamics are in your … geographic market and the market in which you sell or trade or operate your business,” Reuter says.
Data on where people are moving to and from, as well as industry reports on how other businesses in your sector are faring, can provide more insight.
This article was provided to The Associated Press by the personal finance website NerdWallet. Hillary Crawford is a writer at NerdWallet.
Blackstone will limit investor withdrawals from its $125 billion real estate investment fund following a spike in redemption requests, according to the New York-based firm, following an announcement that it will sell its stake in two Las Vegas properties.
Only 0.3% of the fund’s net assets will be available for redemption in December, according to a notice sent to investors Thursday, following a surge in requests in November and October.
In October, Blackstone received $1.8 billion in redemption requests—2.7% of the net asset value—and has already received requests in November and December exceeding its quarterly limit, according to the Financial Times.
Only 43% of redemption requests from investors were fulfilled in November, totaling $1.3 billion in assets.
Following the announcement, shares at the company fell by as much as 10%.
Blackstone will receive $1.27 billion in cash—generating about $730 million for shareholders—from Vici Properties Inc. for its 49.9% stake in the MGM Grand Las Vegas and the Mandalay Bay, two properties valued at $5.5 billion total, according to a release Thursday.
“Our business is built on performance, not fund flows, and performance is rock solid,” a Blackstone spokesperson told the Financial Times, adding the company will continue to focus on rental housing opportunities.
$69 billion. That’s the estimated value of Blackstone’s assets across logistics facilities, apartment buildings, casinos and medical office parks. Forbes estimates the real estate firm totaling $15.5 billion in revenue through 2022.
The Blackstone Real Estate Income Trust rose in the real estate industry with its inception in 2017, according to Bloomberg, as it quickly acquired apartments, suburban homes and dorms during a period of low interest rates. Investors have become increasingly more cautious about accumulating money in assets that are hard to trade and value while Blackstone continues to place more limits on access to its funding. Because of the two Las Vegas property sales, in addition to the earlier $5.6 billion sale of The Cosmopolitan, the firm now has access to more liquid assets, potentially allowing it to redeem more requests in the near future.
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