Market Snapshot: Top Commercial Properties in 2013

To start off the new year, we have compiled a summary of Metro Vancouver’s most valuable commercial real estate assets. The summary is based on a survey of the top 25 commercial properties ranked by asssessed value.

While assessed values can often vary significantly from market values (take Bentall 5 for example, which sold for $400M last year), the survey provides a glimpse into who controls the larger commercial assets in Metro Vancouver and yields some interesting observations:

• Metrotopolis at Metrotown is by far Vancouver’s most valuable commercial property. The nearly 1.8M sq ft shopping centre is assessed at $725M ($406 per sq ft). This value does not include the adjacent office towers, also owned by Caisse de depot, which is Quebec’s largest pension fund manager.

• The top 25 are almost all retail or office, or both. One apartment and hotel property each cracked the top 25.

• Pension funds control the vast majority of these larger core/trophy assets. (76% to be exact)

• A group of 6 pension fund managers (some in partnership) control well over 50% of the top 25.

• While the top 3 are super regional shopping centres, 15 of the top 25 are Downtown office towers.

Where does Vancouver rank next to other cities in terms of commercial property valuations? While Vancouver valuations are among North America’s highest on a price/sq ft and cap rate basis, due to scale we’re not quite in the same league as others for total values… For reference, Scotia Tower in Toronto sold in 2012 for $1.27 Billion. The Bow office tower in Calgary cost $1.4 Billion to construct. Canadian Pension Plan Investment Board acquired a 50% stake in a 2.5M sq ft. Manhattan office tower in 2012 for $576M.