Values for apartment buildings in East Vancouver have grown steadily over the past 10 years and have generally tracked rents in its upward trajectory. The supply of rental units in this market is limited to new condos in areas such as Main and Fraser Street. Transaction activity has been fairly limited in this market with few sellers; however, a number of buildings have been acquired by investors looking to take advantage of rising rents, particularly in trendy areas near Main Street and Commercial Drive.

This market is predominantly characterized by low-rise buildings and complexes over 40-years of age. The average sales value over the past five years in this market is about $145,000.

East Vancouver has traditionally been considered an affordable option to renters relative to the Westside or West End; this is evident in rents which are on average approx. 15% lower. According to CMHC, the average one-bedroom rents for $915 in Mount Pleasant/Renfrew Heights, and $845 in the East Hastings Area.

Much of the transaction activity taking place in East Vancouver over the past few years have been of older apartment product that has been renovated and reintroduced to the market at higher rental rates. Average cap rates have hovered in the 4.0% to 5.0% range, with lower cap rates for older buildings with upside potential.

According to CMHC, vacancy rates for apartments are generally around 1.0%; which will continue to be tight amid little new rental supply. Investors will continue to look to East Vancouver for buildings with upside as well as those properties which are well-positioned for future growth and rent increases.

A 4-storey walkup apartment building located at 6353 Royal Oak Avenue near Metrotown has sold for $4,930,000. The property was built in 1968 and contains 29 one and two bedroom units. The sale price equals $170,000 per unit, and a 4.4% cap rate. The building had been listed for sale at $4,980,000.

Park Strand Apartments, located at 1999 Nelson Street, a 50-unit walkup apartment building in the West End of Vancouver has sold for $14,925,000, or $298,500 per unit. The building was built in 1951 and was purchased by a private local investor. The net operating income at the time of sale was projected to be $496,000, representing a 3.3% cap rate. The property had been listed for sale; click here for a brochure.

Values for apartment buildings in Surrey have grown steadily over the past 10 years, a trend expected to continue with new supply of rental units generally limited to new condo projects. More affordable rental units tend to be limited to older rental stock.

This market is predominantly characterized by low-rise buildings and complexes over 20-years of age. The average sales value over the past five years in this market is just over $100,000 per unit.

With a limited stock of apartment buildings per capita relative to other municipalities such as Vancouver and New Westminster, investment activity in this market has been relatively confined to less than a dozen transactions each year. Cap rates have fallen steadily as well, to average just over 6.0% currently.

The prospects for this market are generally positive, with new supply limited to areas of residential development such as Surrey City Centre. According to CMHC, vacancy rates for apartments are approximately 3.7%; this is higher than the Metro Vancouver average, but still in healthy territory. Average rents range from $610 for bachelors, up to $982 for 3-bedroom units. CMHC estimates that there are over 29,000 condos in the Fraser Valley, of which approximately 21% are rented at rates averaging 10-20% higher than purpose built rental.

A 14-unit three-storey walkup apartment building in Kits has sold for $4,800,000, or a 3.1% cap rate ($343,000 per unit). The building, located at 2250 York Avenue contains one and two bedroom units and had been listed for sale for $5,600,000. The property is zoned RM-4.