Taken by 604 City. July 9, 2014
By Paul Brent
Real estate investors have been the beneficiaries of a two-decade decline in interest rates but with rates expected to trend upward again, buyers need to be pickier and focus on operations even as the prospects for landlords are improving along with the U.S. and Canadian economies.
That is one of the conclusions that can be drawn from Jones Lang LaSalle‘s recently released report on Canada’s debt market Commercial Property Financing Renaissance. (The adjacent table is sourced from JLL Debt Capital Markets and referenced in the report.)
“Rates have been declining pretty much every year for 25 years and going forward we are looking at a reversal of that,” said Amar Nijjar, vice-president and practice lead with JLL Canada‘s Toronto office. “Borrowers will have to have some readjustment: buyers will have to see a different type of financial modelling and rely more on income growth than just cap rate-related appreciation.”
The JLL executive said the pressures behind rising bond yields and interest rates are also good news for real estate operators in general.
“They are rising because inflation is getting up and unemployment levels are going down. Those are the …read more
Source: RENX
An 11-unit building at 2358 York Avenue has sold for $3,938,000, or $358,000 per unit / 2.6% cap rate. The realtor’s brochure describes the building as follows:
“…a well maintained three storey plus penthouse apartment building located in Vancouver’s extremely popular Kitsilano neighbourhood. Only one block south of Kits Beach, the property features 11 suites including 2 penthouse units with sweeping views of English Bay and the North Shore Mountains. Ideal for owner-occupier. Rents significantly below market.”
The building had been listed for sale for $4,000,000.
The owner of two rental apartment buildings at 141 & 147 East 21st Street in North Vancouver has applied to rezone the properties to allow a new 6-storey rental apartment building. The application for the site, which is located behind the London Drugs on Lonsdale, proposes to demolish and replace the existing buildings on site with a new building. The redevelopment would result in a net increase of 74 units. The site is 27,670 SF in size and the total proposed density is 72,613 SF, resulting in a total density of 2.53 FSR. The provision of rental under a secured agreement is considered the CAC for the rezoning.
Plans for a rental building in Kerrisdale that were submitted earlier this year, have now been withdrawn.
Bogner Development Group had proposed rezoning on the church site for a 6-storey, 56-unit rental building. A notificaiton on the City’s website indicates that Bogner is withdrawing the proposal:
“After review of the public feedback provided through the application process, the applicant has decided to withdraw rezoning application for a 6-storey secured market rental building on this site. The applicant is now working with staff to review potential options for the site.”
The rezoning would have been one of the first under the Interim Policy for Affordable Housing, and at 6-storeys, would’ve also been taller than most proposals under existing zoning in Kerrisdale.
Here is what was proposed:
