Anthem Properties recently announced the acquisition of the BC Electric Building, a 119,334 square foot office building located at in intersection of Hastings Street and Carrall Street. The price was undisclosed.
The Real Estate Board of Greater Vancouver has released stats for August which show mixed results amid a general slowdown of sales activity since May of this year. A sample of selected areas in Metro Vancouver shows pricing as flat or in decline during the summer.
Year over year pricing is in slight decline pretty much across the board, with the exception of some of the Fraser Valley suburbs which did not exhibit significant price increases over the past two years. Pitt Meadows condos, for example, have shown a slight increase of 1.2% since May 2012. Other markets with much higher levels of new inventory, such as North Burnaby, have declined about 2.5% over the summer, and have remained relatively flat since 2010.
Prices are continuing to come off on the Westside of Vancouver, which was one of the hottest markets in 2010/2011 and was the basis for much of the commentary on the health of the overall residential market.
The HPI for single family homes on the Westside declined 2.5% in August alone, and is down over 6% since May 2012. The HPI remains 20% above where it was in August 2010, indicating that with a prolonged lack of sales activity, there may be a further decline in store. Between June and August, sales volumes were down 50% over 2011.
Valuations for office buildings in Burnaby have risen over the past ten years amid declining cap rates and rising rental rates. The average value for office building sales in the past two years has been hovering around $200 / SF.
This market is predominantly characterized by larger office complexes, interspersed with smaller local office and strata business park office. Newly built buildings in the core areas such as Glenlyon office park and Canada Way corridor have achieved values over $250 / SF, with older product in local residential areas and industrial areas reaching below $100 / SF.
Cap rates have generally decline from an average above 8.0% to decline below 6.50%; a trend consistent with other suburbs in Vancouver.
Investment activity in this market has been relatively constrained given a lack of available product. As we reported in July, Bosa acquired a sizeable office asset located just off Canada Way at Sperling Avenue, for $33,000,000.
In terms of new supply, Metrotower 3 is currently under construction and is expected to complete in 2014. The leasing market remains in favour of tenants with a reported Q2 2012 vacancy rate of 11.2% (source: Colliers).