The City of Vancouver will present their third annual Housing and Homelessness Strategy Report Card to council next week. The purpose of the annual report is to track progress of the City’s various initiatives under the Housing and Homelessness Strategy 2012-2021.

The report is an excellent source of some key housing indicators compiled from CMHC and REBGV, of which several are summarized here:

• the City of Vancouver had 4,648 dwellings commence construction in 2014 (approximately 25% single family and 75% multi-family units). This rate is close to the 5-year annual average of 4,824.
• Vacancy rates continued to decrease between 2013 and 2014, both in the city of
  Vancouver (from 1.0% to 0.5%) and regionally (from 1.7% to 1.0%) reflecting
  ongoing population growth and demand for housing
• Between March 2014 and March 2015, the benchmark  price for a single family

  house increased by 14% on the eastside and 12% on the westside, while the

  benchmark price for condos fell by 1% on the eastside and increased by 5% on

  the westside.
• 409 units of interim supportive housing were created in 2014 (395 Kingsway, 3475 E. Hastings, 1335 Howe and 1060 Howe)
• 439 units of permanent supportive housing were created (1134 Burrard, 111 Princess, 2465 Fraser and 951 Boundary)
• 3,783 secured market rental units have been approved during 2012-2014 (only 407 were actually completed in 2014)

1867 West Broadway, a 3-storey B Class concrete office building more commonly known as The CGA Building, has sold for $16,125,000. The 31,000 SF building was owned by the Certified General Accountants Association of B.C., who will vacate it’s 26,000 SF this summer. The site the building is located on is 13,402 SF and is zoned C-3A. The property was listed for sale in late 2014 with no asking price.

The 2nd floor of the building is currently listed for lease at $22.00 per SF.

The purchaser was Austeville Properties who owns the adjacent commercial building. This appears to be a long-term strategic investment as opposed to any kind of redevelopment deal.

The Cambie Corridor Plan has been approved for almost four years now and a great deal has taken place within the plan area from 16th to Marine Drive. The end result of five years of planning and development activity is only beginning to be seen with a handful of buildings sprouting up. Up and down the Corridor, numerous land assemblies have occurred, with dozens of rezoning applications at various stages of the process. Eleven sites have now had rezoning enacted; meaning they have been officially approved by the City.

Approximately 28% of the 439 lots in the plan area have now been sold to 42 different developers, and despite a growing list of projects at various stages of construction and approvals, demand from developers continues unabated, particularly for prime locations such as those near Queen Elizabeth Park and Langara Golf Course. The result has been an increase in land values of almost 20% since the Cambie Corridor Plan was adopted by Vancouver City Council in May 2011.

The following chart depicts all of the site/land assembly sales that have taken place within the plan area since 2009.

* based on approved density, or plan maximum where no application exists yet.

So why are values going up despite an increase in the number of projects coming down the pipeline? Two underlying factors appear to be primary valuation drivers for Cambie land sales, particularly over the past 18 months.

First, a handful of projects have now gone into the marketing phase and have achieved very strong sales in terms of both pricing and sales velocity. In desirable areas of the corridor, woodframe product in selling in the $650-$700 per SF range, and concrete product is selling in the $775-$825 per SF range. Clearly there is a market for new condo product anywhere on the Westside of Vancouver, and Cambie’s accessibility and proximity to transit, parks and schools appeals to many buyers. Developers such as Mosaic Homes and Intergulf have been able to capitalize on this demand.

Secondly, the Cambie Corridor Plan facilitates a relatively straightforward rezoning process that is difficult to find elsewhere in the City. Opportunities for densification in other areas of Vancouver are now almost entirely limited to commercial strips such as Broadway with existing zoning for mixed-use multifamily. With public pushback to other planning efforts in such areas as Grandview-Woodlands where public consultation is being prolonged at the behest of vocal community organizations, developers are forced to concentrate their efforts to the path of least resistance. The Marpole Community Plan was also approved in 2014, though is far less ambitious than Cambie, partially as a result of public opposition, and will result in far fewer rezoning applications and developments.

With a dearth in supply of new sites for development elsewhere in the City of Vancouver, Cambie Street land values will likely continue its steady upward march so long as attendant condo demand continues to be strong.

Here is 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 the 2015 tax assessment value. While assessed values don’t neccesarily reflect market values, this analysis provides a fairly accurate snapshot of our city’s most valuable assets:

A few observations:

• Metrotopolis at Metrotown continues to hold its rank as by far Metro Vancouver’s most valuable commercial property, as it has for the last decade. The nearly 1.8M sq ft shopping centre is now assessed at over $1 Billion. This value does not include the adjacent office towers which would likely add another $200 Million, also owned by Caisse de depot, which is Quebec’s largest pension fund manager.

• The redevelopment of Sears into Nordstrom significantly bolstered its assessment value. Including the office towers, Pacific Centre is now valued at over $1 Billion.

• Renovations and improvements at aging regional shopping centres including Park Royal and Guildford Town Centre bolstered values significantly.

• Oakridge Centre’s value had a large increase likely based on it’s 2014 rezoning for over 2,000 residential units.

• Langara Gardens and Landsdowne Centre both fell off this list, but will likely return in the near future. Both properties are slated for redevelopment. Landsdowne in particular is speculated to have significant redevelopment value.

• Pension funds control the vast majority of these larger core/trophy assets. (77% 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.

Here’s a quick look at the largest deals of 2014. While the announcement of the sale of the Jericho Lands was considered to be among the biggest deals of the year, this is not included as this was not a market transaction.

1. Hyatt Regency ($140 MM)

The sale of the Hyatt Regency hotel in Downtown Vancouver to InnVest REIT last month was the largest deal in Vancouver in 2014. The 644-room hotel sold for $140 Million. According to an InnVest press release: “InnVest funded the acquisition of the Hyatt with a new $70 million, 3.8% floating rate mortgage (three-year term plus two one-year options) and cash on hand”.

2. 1500 West Georgia ($120 MM)

Bosa Properties acquisition of 1500 West Georgia from Morguard was one of the most talked about deals in 2014. The 193,000 SF A Class office building sits on a very valuable and partially underutilized 43,320 SF, full-block site at the Southeast corner of West Georgia and Cardero. Speculation abounds as to future redevelopment.

3. Langara Gardens ($102 MM)

Peterson Group quietly sold a 50% interest in their 621-unit, 21 acre apartment property on Cambie Street known as Langara Gardens to Concert Properties in a deal that would peg the value over $200 Million. The site has been undergoing a preliminary planning process with the City of Vancouver since 2013.

4. 3777 Kingsway ($87 MM)

Another 50% sale managed to make Vancouver’s top deals of the year. The 50% sale of a building that many Vancouverites refer to as the ‘Telus Boot’, a 22-storey office tower near Metrotown, was sold by H&R REIT to Crestpoint for $87 Million.

5. 1444 Alberni & 740 Nicola ($84 MM)

Wall Financial’s acquisition of a full-city block in the West End was one of Vancouver’s largest deals with redevelopment potential. At just under an acre and containing existing apartments and office space, the site has redevelopment potential under the City of Vancouver’s new West End Community Plan.