In past years, compiling a list of the Top 10 land sales in Metro Vancouver was a daunting task; not only was there such a large volume of sales transactions to sift through, but the size of the larger deals was staggering, with the total of just these 10 deals alone eclipsing $1 Billion annually for the period of 2016-2018.

It was an overheated market that was due for a correction, and this decline began in mid-2018.

The more recent global pandemic that emerged in March 2020 has and will continue to have major implications for almost every facet of local and global real estate. For the overall Metro Vancouver land market however, the pandemic can somewhat be characterized as “beating a dead horse”. 2019 sales volume was already down by more than half the previous year.

A pullback from developers to acquire more land amid a significant condo development pipeline in most submarkets was a primary reason. Land for both rental residential and commercial development has remained relatively scarce which has offset some of the decline in condo land activity. Likewise, more recent activity suggests a return of demand for condo land in the suburbs, though core luxury condo sites have essentially fallen off the radar. Land for industrial development is now acutely scarce, with each transaction seeming to support a record value per acre.

While the 2016-2018 market may seem like a distant memory now, there are reasons for optimism heading into 2021. One sentiment emerging from this trying year is that both private and instituational investors continue to be bullish on the long-term prospects for Vancouver and a projected demand for continued residential, commercial and industrial development. Any return to inflows of international capital, either for individual strata units, or for land deals, will also contribute to momentum in the years ahead.

Here’s a look at each of the 10 largest land deals of 2020:

1. 6851 & 6871 Elmbridge Way, Richmond

• Price:                  $60 Million
• Site Area:           3.4 Acres
• Vendor:               Bene Development
• Purchaser:         Landa Global

The goods:        The largest land deal of 2020 would not have even cracked the Top 10 list in recent years, which speaks to the shift in the market. The sale of this site on Elmbridge Way in the Oval Village area of Richmond’s City Centre area has an existing rezoning application for three residential towers, plus commercial and hotel space. The deal was negotiated in 2019 and continues Landa Global’s expansion in the overall Vancouver marketplace.

2. 8188 & 8132 Manitoba Street, Vancouver

• Price:                   $60 Million
• Site Area:            5.0 Acres
• Vendor:               Private Investor
• Purchaser:          Wesbild

The goods:        This 5.0-acre, I-2 zoned industrial development site is located just South of Marine Drive in South Vancouver. Wesbild has now submitted a development application for the first phase of the site, a 3.2 acre parcel that will be developed into two unique 6-storey industrial/office buildings, totalling 330,000 SF in the first phase. The sale was brokered by Stu Morrison, Darren Cannon and Roy Pat of Colliers.

3. 9930 197^th Street, Langley

• Price:                   $40.2 Million
• Site Area:            14.5 Acres
• Vendor:               Trimac Transportation
• Purchaser:          Hall Constructors

The goods:        Another industrial land sale nears the top of the list; this one in Langley on an underutilized site zoned for Heavy Industrial uses. No word yet on plans for redevelopment of the site.

4. 495 West 41^st Avenue, Vancouver

• Price:                  $40 Million
• Site Area:           15,860 SF
• Vendor:              Coromandel Properties
• Purchaser:         PCI Group

The goods:          This sale involved a former Esso gas station site at the Northeast corner of Cambie and West 41^st Avenue. Coromandel had acquired the site in October 2014 for $15,800,000. In 2018, an update to the Cambie Corridor Plan redesignated the site to allow for a potential mixed-use tower. No rezoning applications have yet been filed.

5. 1331 & 1340 Olmsted Street, Coquitlam

• Price:                  $39.3 Million
• Site Area:           9.5 acres
• Vendor:              City of Coquitlam
• Purchaser:         Mosaic Homes

The goods:          Mosaic Homes purchased this townhouse development site on Burke Mountain from the City of Coquitlam. The preliminary plan for the site calls for 167 townhouse units.

6. 6031 Wilson Avenue, Burnaby

• Price:                  $35.5 Million
• Site Area:           1.34 Acres
• Vendor:              Private Investor
• Purchaser:         Bosa Properties

The goods:         Just a few short years ago, Metrotown tower sites were selling monthly at record valuations. Today, the market for sites has cooled considerably amid a perceived oversupply of future condo product. This sale on Wilson represents an assembly, as Bosa controls the two neighboring sites at 5977 and 5979 Wilson. The price per SF for the site is considerably lower than what could have been achieved at the peak of the market, and was likely a motivating factor in this deal having been completed in 2020.

7. 2219-2285 Cambie Street, Vancouver

• Price:                 $32 Million
• Site Area:          15,680 SF
• Vendor:             Reliance Properties
• Purchaser:        Nicola Wealth Real Estate

The goods:         This site on the West side of Cambie at West 7^th Avenue, mostly known as the Robinson Lighting property is a fully tenanted retail property that has future development potential under it’s C-3A zoning.

8. 140-150 West 4^th Avenue & 2004 Columbia Street, Vancouver

• Price:                  $32 Million
• Site Area:           36,234 SF
• Vendor:              Private Investor
• Purchaser:         Dayhu

The goods:        This sale involved an I-1 zoned site in the burgeoning Mount Pleasant Light industrial/office district. A development application for the site envisions a 4-storey commercial building at a total density of 3.0 FSR.

9. 475 West Hastings Street, Vancouver

• Price:                  $31 Million
• Site Area:          9,360 SF
• Vendor:              Private Investor
• Purchaser:         Private Investor

The goods:        This site at the Northeast corner of West Hastings and Richards Street in Downtown Vancouver has long been home to tenants including Mr. Big and Tall. While no redevelopment plans have been made public, the intent appears to be a midrise hotel development.

10. Whalley Station Square, Surrey

• Price:                 $26.9 Million
• Site Area:           1.87 Acres
• Vendor:              Private Local Investors
• Purchaser:         Tien Sher Group

The goods:       This property is a retail strip mall in Surrey’s City Centre. Tien Sher has a rezoning application to allow for a high density mixed use development including 500 residential units and commercial space.

Some notes from the above list:

• 5 of the 10 largest land deals in Metro Vancouver took place in the City of Vancouver (up from just 1 last year)
• 3 of 10 were sold by market bid process (the other 7 were ‘off-market’)
• All 10 were bought by well-established ‘local’ development groups, with previously active offshore buyers absent from these large deals.

Have a question or a comment on any of the transactions above? Please feel free to contact me.

A City of Vancouver report going to Council next week seeks approval for the annual inflationary rate adjustment to DCL’s and CAC’s.

The target DCL and CAC rates are adjusted annually to keep pace with changes in property values and construction costs.

The proposed adjustment for 2021 is a decrease of 0.8%; the first decrease since the annual inflationary index was developed by the City in 2011.

Here are the new proposed rates:

The new target rates will become effective September 2020.

The report also recommends proceeding with the final phase-in of the Vancouver Utilities DCL rate for high-density residential development on
the east side that was approved by Council in July 2018, and the adjustments of the Little Mountain and Southeast False Creek CAC Targets that were approved by Council with the updated CAC Policy in January 2020.

The new target rates for these areas are as follows:

Little Mountain Adjacent: The Little Mountain Adjacent CAC Target will be increased from its current level of $29.88 per sq.ft. to $47.00 per sq.ft.
Southeast False Creek: The CAC Target in Southeast False Creek (SEFC) will be increased from its current level of $16.78 per sq.ft. to $67.00 per sq.ft.

Lynn Valley is one of North Vancouver’s two Town Centre areas. It’s also the District of North Vancouver’s Municipal Town Centre in the Metro context, which is defined as “a municipal-wide centre or hub with medium and higher density uses including residential, commercial, employment, recreational and civic”.

Located in the heart of Lynn Valley, the Town Centre core is currently focused around Lynn Valley Centre, and the new Lynn Valley library and civic plaza. From the District’s OCP: “Heritage buildings and features, parks and views to local mountains reflect the rich cultural and natural history of Lynn Valley. Building on the quality design, liveliness and sense of place initiated by the new Lynn Valley library and civic plaza, there is an opportunity to revitalize the Town Centre into a more vibrant, pedestrian oriented, mixed use centre with housing choices and inviting street level shopping along a High Street with sidewalk cafes and community spaces. Redevelopment of the Town Centre also provides an opportunity to increase the diversity of housing choices in an area close to services, shops, jobs and transit.”

There has been solid growth of residential development over the past several years, though future inventory remains low given the lack of land for development coupled with the District of North Vancouver’s more recent efforts to slow new development.

The Policy Background

The District of North Vancouver created a new Official Community Plan (“OCP”) in 2011, and the land use objective for Lynn Valley Town Centre was to “accommodate approximately 2,500 new units” over a twenty year time horizon.

The OCP was further refined for Lynn Valley in 2013/2014 and opened up a number of development opportunities, but confined these opportunities to primarily the relatively small area between Mountain Highway and Lynn Valley Road.

A number of development projects have been initiated or completed (this is expanded upon below).

The rezoning designations contemplate mostly low to medium density woodframe residential except on key sites including the Lynn Valley Centre Mall site, which were given higher density designations. There are only a handful of properties with a commercial only designation.

Here is a video outlining the overall urban design/public realm concept:

Lynn Valley Centre mall was determined to be a focal point of the plan area. The 12-acre shopping centre was acquired by Bosa Development in 2003 for $36,000,000, or an 8.6% cap rate and subsequently rezoned in 2014 (further details below). The adjacent 2.8 acre Safeway site is separately owned by Crombie REIT.

As with the other growth centres in the District of North Vancouver, the appearance of rapid growth and attendant impacts such as traffic and construction has led to increasing opposition for new rezoning applications. The District of North Vancouver is now undertaking a lengthy review of their OCP to determine what adjustments need to be made to keep growth under control and to deliver on promises of affordability.

The Residential Market

Traditionally Lynn Valley has been a single family and ground-oriented community/submarket. Some older lowrise condo buildings exist on side streets near the mall site. The vast majority of condo product in Lynn Valley has been built in the Town Centre area in the last 15 years, mostly as a result of the new OCP in 2011.

The lack of condo buildings in Lynn Valley has generally supported increased pricing, particularly given price points relative to single family, which can reach well in excess of $2 Million for new product.

Here is a snapshot of the currently active condo listings on MLS:

Older woodframe condos typically trade in the $500-600 per SF range, with newer concrete condos in the $850-950 per SF range.

Recently completed projects include:

Polygon’s 68-unit Juniper at 2517 Mountain Highway. It is woodframe construction. Completed in 2019. Recent resales show values of $825-850 per SF. Taluswood has been another successful subsequent phase nearing completion across Library Lane.

Bosa’s first phase of the Residences at Lynn Valley included a 108-unit, 7-storey concrete building on the Eastern portion of the Mall site. It was completed in 2018. Resales values range from $750-1,000 per SF.

Walter’s Place is a 35-unit woodframe building by Milori Homes, completed in 2017. Recent resales figures show values of $800-850 per SF.

Canyon Springs is another Polygon project just down the street, completed in 2015. 108-units and also woodframe, recent resales show a range of $750-850 per SF.

Overall, about 800 units have been built in Lynn Valley since the OCP was adopted, and most of these have now been sold.

New Construction & Proposed Units

Phases 2 and 3 of Residences at Lynn Valley are nearing completion. These terraced buildings up to 12-storeys in height total an additional 250 units.

Approximately 400 units are in the proposal stage for Lynn Valley, the largest of which is Mosaic Homes’ Emery Village project, just South of Lynn Valley Centre, which contemplates 327 condo units and 84 rental units in a phased development. The District approved rezoning in 2018 and development permit for the first phases in 2019.

Rental

The District of North Vancouver has a total inventory of only approximately 1,200 units of purpose built rental units, and less than a quarter of these are located in Lynn Valley (excluding Seniors’ residences which number several hundred more).

Polygon Homes recently completed Hawthorne at Timber Court, a 75-unit woodframe rental apartment building located adjacent their Juniper project. The Hawthorne building is taking registrations for lease, and has also recently been listed for sale.

The Land Market

After completion of the OCP and amid a rising residential real estate market, a number of larger development sites have transacted over the past five years as the market has continually justfied redevelopment of older lowrise apartment properties on relatively underutilized sites. Some of these include:

Mountain Court, this 4.1 acre site housed 72 older rental units and was acquired by Polygon in 2015 for what would eventually become Timber Court (Juniper, Hawthorne & Talisman). The $25,640,000 price tag equated to approximately $80 per buildable SF.

Mosaic Homes acquired the aforementioned 5.1 acre Emery Village site in 2016 for $39,550,000 or $75 per buildable SF.

In 2017, Headwater Projects acquired a 16,920 SF site at 1149 Lynn Valley Road for $5,000,000 or $169 per buildable SF. A 2018 rezoning application anticipated a 36-unit condo project at 1.75 FAR, though the site has recently been listed for sale for $6,800,000 or $230 per buildable SF.

The Commercial Market

There is currently approximately 300,000 SF of commercial space in the Lynn Valley Town Centre area, over half of which (170,000 SF) is in the Lynn Valley Centre mall. There have not been any significant recent investment transactions in the area.