6-Storey Rental Building Planned for Kingsway

Another week, another rental apartment building rezoning application under the City of Vancouver’s Rental 100 program. This one is for a 12,300 SF site (99′ x 122′) located on the North side of Kingsway near Fraser Street. The application to for 855 Kingsway calls for a rezoning from the existing C-2 zoning to CD to permit the development of a six-storey mixed-use building. This is a concurrent rezoning and development permit application.

The proposal includes:

    • 49 secured market rental units;
    • 14 studios, 18 one-bedrooms, 12 two-bedrooms and 5 three-bedroom units
    • 4,043 SF of retail at grade;
    • A total density of 3.30 FSR;
    • A building height of 68.9 ft.; and
    • 25 underground parking spaces.

855 Kingsway855 Kingsway_1 855 Kingsway_2This application is being considered under the Secured Market Rental Housing (Rental 100) Policy.

The architect for the project is Cornerstone Architecture.

The site had sold in 2015 for $3,668,000, or approximately $91 per buildable SF.

Top 10 Land Deals of 2016

Residential development site sales in Metro Vancouver topped $4.5 Billion in 2016. It’s a staggering value only made possible by the confluence of a variety of local and international market forces including: incoming capital, a feverish residential real estate market, and a perceived lack of quality land available for sale. Each of these factors seemed to create the perfect storm in late 2015 and early to mid-2016 and have played a large part in driving land values to record highs.

To put the year we’ve had into perspective, the total land transaction value for 2016 almost matches the previous two years combined ($2.5B for 2015, $2.4B for 2014).

Here is a brief look at each of the 10 largest land deals of 2016:

#1 – Oakridge Transit Centre, 949 West 41st Avenue, Vancouver

OTC_3Price:                   $440 Million

Site Area:            13.8 acres

Vendor:                Translink

Purchaser:          Intergulf Developments / Modern Green Development

The goods:         This was by far the biggest land deal of the year – though the deal is structured to be paid over five years. The former bus barn site was declared surplus land several years ago by Translink and the City of Vancouver initiated a planning policy for the site and surrounding area in 2014. The planning policy was approved in December 2015 to allow for over 1,265,000 SF of density in several low and midrise buildings.  

Shortly thereafter the “OTC” site was marketed by Cushman Wakefield. The site secured offers from 14 potential buyers in the spring of 2016 and was ultimately sold to a partnership between Intergulf and Modern Green Development.

A listing video overview can be viewed here: https://youtu.be/GILwlBuOBRQ


#2 – Pearson Dogwood Lands, 650 West 57th Avenue, VancouverPearson_5

Price:                  $299.6 Million

Site Area:            25.4 acres

Vendor:                Vancouver Coastal Health

Purchaser:          Onni

The goods:          This prime site at Cambie and 57th was sold by Vancouver Coastal Health in 2014 as part of a phased deal with Onni. The bulk of the sale formally completed in March. A formal rezoning application has now been submitted which contemplates over 3 Million SF of density, to be completed in five phases with over 10 towers, several mid-rises and a future Canada Line Station. The deal includes replacement of existing VCH facilities on-site.


#3 – Molson Brewery Lands, 1550 Burrard Street & 1655 West 1st Avenue, Vancouver

Price:                  $185 Million

Site Area:            7.7 acres

Vendor:                Molson Coors

Purchaser:          Concord Pacific

The goods:          Though not the largest deal of the year, this one certainly generated a lot of buzz in the marketplace, and is the only sale on this list that is not a residential land sale – at least based on current zoning policy. The sale closed on March 31 after being listed by Simon Lim of Colliers in 2015. The site is currently zoned M-2 which only allows for manufacturing/industrial uses and is still occupied by Molson on a leaseback basis until their eventual move. Details remain scarce on Concord’s future plans for the site, though it will almost certainly include a substantial commercial component.


#4 – 1444 Alberni Street & 740 Nicola Street

Price:                  $170.1 Million

Site Area:            43,300 SF

Vendor:               Wall Financial

Purchaser:          Landa Global/Asia Standard

The goods:          This full city-block located in the West End of Downtown Vancouver was redesignated as part of the West End Community Plan, adopted in early 2014. The site is currently improved with an office and apartment tower built in the 1970’s. Wall had acquired the site in March 2014 for $83.5 Million and subsequently sold through Simon Lim of Colliers after a bid process in late 2015. The sale closed in April 2016. It is expected that the property will be completely redeveloped with two 40+ storey condo towers.


#5 – Brighouse Square, 6340-6390 No. 3 Road, Richmond

Price:                  $73,500,000

Site Area:            3.6 acres

Vendor:               Sanna Enterprises

Purchaser:          YYH Development Ltd.

The goods:         Brighouse Square is a retail strip plaza at No. 3 Road and Cook Road across from Richmond Centre. The site sold as a potential future residential development play in May 2016 to a Chinese development group. It had been designated as ‘Urban Core T6’ in Richmond’s City Centre Plan to allow for mixed residential and retail. Simon Lim of Colliers acted as the broker in the off-market deal.


#6 – 1745 West 8th Avenue, Vancouver1745 West 8th Avenue

Price:                  $70,000,000

Site Area:           56,550 SF

Vendor:              CIBC

Purchaser:          Delta Land

The goods:         Our team marketed and sold this C-3A zoned, Fairview office building/development site on behalf of CIBC in late 2015, with the sale closing in February 2016. The site achieved 9 offers, with the successful buyer being Delta Land Development. CIBC is leasing the property back until mid-2017 after which time Delta will likely release plans for the property.


#7 – 1059-1075 Nelson Street, Vancouver

Price:                 $68,000,000

Site Area:          17,292 SF

Vendor:              Suncom

Purchaser:          Shan Gao

The goods:         In one of the more interesting sales in recent Vancouver history, this assembly of two non-descript walkup apartment buildings sold three times in just under two years in a series of events documented by Ian Young. Our team acted for Wall Financial in the original assembly and subsequent sale in January 2016. The site flipped in February 2016 for $68,000,000 to a Chinese buyer who remains generally unknown to the market.



1070 - 1080 Barclay_Sold#8 – 1070-1080 Barclay Street, Vancouver

Price:                  $59,000,000

Site Area:          17,292 SF

Vendor:              Two Private Local Investors

Purchaser:         Bosa Properties

The goods:        Just across the lane from #7 on this list, this assembly of two apartment buildings was listed by our team in late 2015 and sold after multiple offers to Bosa Properties. The site was also re-designated in the West End Community Plan to allow for towers up to 550 ft. (subject to shadowing). Bosa also secured the neighbouring strata building at 1060 Barclay. The deal closed in February 2016.


propertyfile-ashx#9 – 1818-1862 West Broadway, Vancouver

Price:                 $56,250,000

Site Area:          37,500 SF

Vendor:              Private Local Investors

Purchaser:         Suncom

The goods:        This assembly of lots on West Broadway near Burrard Street was sold by our team in September 2016. The assembled site comprises 300 feet of frontage and the existing C-3A zoning allows for up to 3.0 FSR residential with retail.


asdfas#10 – 1810 Alberni Street & 703-751 Denman Street

Price:                 $55,000,000

Site Area:          17,292 SF

Vendor:              Local Investor

Purchaser:         Landa Global

The goods:        This West End development site was sold by the Simon Lim team in September 2016 after a listing process. The Property is currently zoned C-5A (West End Commercial), which provides for 2.20 FSR with potential to increase density to 7.00 FSR, and by heritage density increasing up to 7.70 FSR. It is situated in Lower Robson Area A of the West End Community Plan – designation consistent with the amended C-5A Zoning (no rezoning required).


Honourable Mentions:

Below are a couple of notable transactions that formally closed in 2016, but we are not including as they aren’t technically relevant sale deals for the purposes of this analysis.

  • 508 Helmcken Street – this site, more commonly known by its project name “8X on the Park“, is part of a land exhange that was negotiated back in late 2012 with the City of Vancouver. The completion of the Jubilee House social housing replacement project triggered the land exchange so that Brenhill Development can move forward with the construction. The sale value was $83,500,000.
  • 1166 W Pender_Sold1166 West Pender Street – our team acted in this $71,400,000 sale, closing in April 2016. The site is currently improved with a 15-storey office building that the Purchaser, Reliance Properties, intends on redeveloping, though we have not considered it a pure land play as with the transactions above.

Some notes from the above list:

  • 9 of the 10 largest land deals in Metro Vancouver took place in the City of Vancouver
  • 8 of 10 were sold by market bid process (the other 2 were ‘off-market’)
  • 3 of 10 were bought by well-established ‘local’ development groups, the other buyers were offshore or ‘new-entrant’ development companies
  • 8 of 10 will require a rezoning process before development can occur

How Burnaby is Building More Highrises than Vancouver (…Way More)

While the City of Vancouver grapples with worsening housing affordability conditions, increasingly contentious area plans, and an excruciatingly slow planning process for even modest density increases, Burnaby is quietly going through what is likely one of the most dramatic suburban transformations in the history Metro Vancouver, if not Canada.

Most people have only really begun to take notice more recently with higher and higher towers starting to pop up in Metrotown and now Brentwood. With a strong condo market fuelling demand for new towers near transit, most of Vancouver’s large developers have been active securing sites in Burnaby in the last several years. While the rezoning applications tend not to attract as much attention as those high profile projects in Downtown Vancouver, the magnitude of activity can’t be ignored, particularly when one ponders the scale of projects like Shape Properties’ recently approved Lougheed Town Centre.

How did Burnaby become a hotbed of highrise construction at a scale that dwarfs even the City of Vancouver? You have to go back a few years to understand how the plans were put in place.

The City of Burnaby put plans in place several years ago to concentrate growth in and near major rapid transit (Skytrain) nodes, particularly in four town centre areas they identified as follows:

Furtheremore, unlike homeowners in Vancouver that have been increasingly vocal against even midrise developments, towers in Burnaby have faced less public opposition during rezoning, in part due to the fact that many highrises are being being built in former industrial areas that are being lost to residential, or in areas that are primarily occupied by older rundown apartments where tenants have, seemingly, less influence with the City than single family homeowners.

So far, about 30 highrise towers have been built in these four town centre areas (including 2 office towers), primarily in Metrotown, where projects such as Sovereign by Bosa – a 45-storey hotel and condo tower, and Metroplace by Intracorp – a condo tower near the Metrotown Skytrain station, have each taken advantage of sizeable density increases per the Metrotown Town Centre plan. The sales velocity and pricing of each new development spurs even greater interest for new projects and generates more and more rezoning applications. Land speculation is now commonplace, particularly in more mature areas such as Metrotown.

The City of Burnaby’s willingness to allow fairly substantial density on previously underutilized parcels of land previously dedicated to commercial and industrial use has vaulted Burnaby far ahead of any area in Metro Vancouver in terms of highrise construction. Shape Properties’ two mall sites: Brentwood and Lougheed, are the largest and most well known, but others such as Onni’s Gilmore Station (rumored to include BC’s new tallest tower) and Concord’s Brentwood projects are massive themselves and in terms of height and scale, tower over Vancouver’s most ambitious plans such as the recently scaled back Oakridge.

A review of current and forthcoming developments in the City of Burnaby shows over 100 highrises in various stages of development (under application or construction), almost all of them intended for residential condos, with a handful of commercial office towers usually required on the larger scale developments to preserve job space. A few stats show the scale of this wave of development in Burnaby:

  • 106 highrises under development (compared to 68 in the City of Van)
  • 47 highrises of 40-storeys or more (compared 13 in the City of Van)
  • Over 30,000 units under development (excluding lowrise and townhouse units)

Here is a breakdown of all of this activity, by each area of Burnaby:

Brentwood

ProjectDeveloperHeight (Storeys)UnitsStatus
The Amazing BrentwoodShape
Brentwood ONE53591U/C
Brentwood TWO53563U/C
Brentwood THREE51526U/C
Brentwood Tower 440~2,500Proposed
Brentwood Tower 530Proposed
Brentwood Tower 655Proposed
Brentwood Tower 735Proposed
Brentwood Tower 830Proposed
Brentwood Tower 935Proposed
Brentwood Tower 1040Proposed
Gilmore StationOnni
Gateway Tower 145~2,600Proposed
Gateway Tower 255Proposed
Gateway Tower 365Proposed
Dawson Tower 125Proposed
Dawson Tower 235Proposed
Dawson Tower 335Proposed
Dawson Tower 445Proposed
Carlton Tower35Proposed
Commerce Tower 115Proposed
Commerce Tower 230Proposed
Concord Place - BrentwoodConcord Pacific
Hillside Tower 142892Proposed
Hillside Tower 247Proposed
Hillside Tower 345~2,900Proposed
Hillside Tower 455Proposed
Flatlands Tower 130Proposed
Flatlands Tower 240Proposed
Parkside Tower 125Proposed
Parkside Tower 235Proposed
Parkside Tower 335Proposed
Parkside Tower 445Proposed
Solo DistrictAppia
Stratus45374Complete
Altus48284U/C
Tower 339700Proposed
Tower 445Proposed
1846-1904 Gilmore46340Proposed
2242 Alpha AveMonark30Proposed
2425 Alpha Ave Tower 1Thind25~750Proposed
2425 Alpha Ave Tower 230Proposed
2425 Alpha Ave Tower 335Proposed
2630 Douglas Road Tower 125n/aProposed
2630 Douglas Road Tower 230n/aProposed
4720 Dawson Road25170Proposed
AviaraLedingham McAllister32300Complete
Escala (1710 Gilmore Ave)Ledingham McAllister42520U/C
Fulton House (2338 Madison Ave)Polygon41300Proposed
Milano (2450 Alpha Ave)Solterra31176Pre-sales

East Burnaby/Lougheed

ProjectDeveloperHeight (Storeys)UnitsStatus
Lougheed Town CentreShape
Lougheed Tower 125-65~11,000Proposed
Lougheed Tower 225-65Proposed
Lougheed Tower 325-65Proposed
Lougheed Tower 425-65Proposed
Lougheed Tower 525-65Proposed
Lougheed Tower 625-65Proposed
Lougheed Tower 725-65Proposed
Lougheed Tower 825-65Proposed
Lougheed Tower 925-65Proposed
Lougheed Tower 1025-65Proposed
Lougheed Tower 1125-65Proposed
Lougheed Tower 1225-65Proposed
Lougheed Tower 1325-65Proposed
Lougheed Tower 1425-65Proposed
Lougheed Tower 1525-65Proposed
Lougheed Tower 1625-65Proposed
Lougheed Tower 1725-65Proposed
Lougheed Tower 1825-65Proposed
Lougheed Tower 1925-65Proposed
Lougheed Tower 2025-65Proposed
Lougheed Tower 2125-65Proposed
Lougheed Tower 2225-65Proposed
Lougheed Tower 2325-65Proposed

South Burnaby

ProjectDeveloperHeight (Storeys)UnitsStatus
Southgate VillageLedingham McAllister
Gateway Tower 126~6,250Proposed
Gateway Tower 228Proposed
Gateway Tower 330Proposed
Gateway Tower 434Proposed
Gateway Tower 536Proposed
Gateway Tower 638Proposed
Gateway Tower 740Proposed
Gateway Tower 844Proposed
Ernie Winch Tower 30Proposed
Ernie Winch Tower 226Proposed
Island Tower 126Proposed
Island Tower 230Proposed
Island Tower 338Proposed
Crescent Tower 138Proposed
Crescent Tower 240Proposed
Crescent Tower 346Proposed
Courtyard Tower 124Proposed
Courtyard Tower 226Proposed
Courtyard Tower 332Proposed
Kings CrossingCressey
Kings Crossing Tower 125803Pre-sales
Kings Crossing Tower 230Pre-sales
Kings Crossing Tower 340Pre-sales

Metrotown

ProjectDeveloperHeight (Storeys)UnitsStatus
Station SquareAnthem/Beedie
Station Square Tower 135269Complete
Station Square Tower 238434U/C
Station Square Tower 348U/C
Station Square Tower 452334Proposed
Station Square Tower 541424Proposed
Metrotown SearsConcord Pacific
Sears Residential Tower 1~1,500Proposed
Sears Residential Tower 2Proposed
Sears Residential Tower 3Proposed
Sears Residential Tower 4Proposed
Sears Residential Tower 5Proposed
Sears Commercial Tower 1Proposed
Sears Commercial Tower 2Proposed
Gold House Tower 140490Pre-sales
Gold House Tower 228Pre-sales
The Met Tower 132295Complete
The Met Tower 238312U/C
ModelloBoffo37170U/C
Aldynne on the ParkPolygon41242U/C
The Park MetrotownIntergulf42298U/C
Bluesky Metrotown (5977 Wilson)BlueSky Properties34365Proposed
6380 SilverBeflord Propertise41479Proposed
6420 SilverBelford Properties26Proposed
6695 Dunblane / 4909 ImperialTransca Development40280Proposed
6750 Dunblane / 5025 ImperialAmacon27177Proposed
Maywood ParkIntracorp30n/aProposed
MidoriPolygon37253Pre-sales
SussexTownline Homes30375Proposed

The above floor & unit counts are best estimates unless otherwise confirmed in City of Burnaby planning/rezoning application documents.

It is anticipated that there will be more rezoning applications forthcoming in the near future, particularly as the Town Centre Plans are further refined; however, it can be argued that the majority of the most central and logical development sites have now been secured by developers. With a very active presales market and continued upward trajectory of condo prices, it can be anticipated that land costs will continue to increase for these Burnaby tower sites in the future, with areas such as Port Moody and Coquitlam seeking to catch some of the spillover of this growth in conjunction with the 2017 completion of the Evergreen Line.

With the height and scale of these projects in Burnaby, it will be interesting to see what, if any response the City of Vancouver has while it struggles to create even modest height and density in increasingly expensive and largely unaffordable areas.

For the record, I am not espousing the virtues of density as the primary means of increasing affordability. In fact, if Burnaby is behind in an area, it is in the creation of new rental units for which there is currently no coherent or substantive policy. This, in part, has helped the viability of several projects since rental replacement is not a requirement like it is in other municipalities. The City of Vancouver has been more proactive in the provision of affordable housing which has hopefully had at least a moderate impact in terms of affordability.

As Affordability Worsens, Municipalities Taking Differing Approaches

While the City of Vancouver is most often the focus of debate and discussion surrounding the current housing affordability crisis, development pressures are now forcing other municipalities to engage in research and analysis on the issue. Recent public backlash related to the redevelopment of older low-rise apartment buildings has forced staff and council in many Metro Vancouver cities to spend time reviewing the issues.

The Councils of both City of Burnaby and the District of North Vancouver (“DNV”) received reports in the past week from their respective planning departments on issues surrounding housing affordability. In both cases, the reports were prepared primarily for information purposes only and will not immediately result in policy changes; however, the increasing dialogue at the municipal level is sure to have an impact on planning and rezoning policies in these and other municipalities in the near future. Both Burnaby and DNV are grappling with the impending redevelopment under new OCPs that have targeted older apartment buildings in “town centre” areas, though they appear to have differing perspectives on what can actually be done at the municipal level.

Suburban municipalities are well behind the City of Vancouver which was forced to take more severe measures to protect rental housing stock after development pressure in the 80’s and 90’s. Likewise the City of Van has been more progressive on devising and implementing rental incentive policies, to varying degrees of success.

As both single family and condo values increase throughout Metro Vancouver, redevelopment pressures are now mounting in many areas and citizens throughout Metro Vancouver are urging governments to take a harder look at housing affordability. Even sleepy Maple Ridge is feeling pressure on the rental market.

Below is a brief summary of the two reports that went to each City Council with specific focus on the issues identified in each municipality and potential policy implications (or lack thereof):

City of Burnaby – Growth Management and Housing Policies in Burnaby (Nov 4, 2015)

Purpose of Report

“to place the City’s approach to the management of growth within the context of housing policy and demand, tenure and affordability. This report outlines the City’s policy framework for managing growth; reviews the roles and responsibilities of local and senior levels of government in the provision of housing and housing affordability; highlights the City’s legislative role and ability to improve the range of market and non-market  housing opportunities and affordability levels; and discusses the constraints faced by local governments to directly provide or influence the supply and/or affordability of housing.

This report has been prepared in response to observations and concerns received by the City regarding new developments within the Town Centre…where existing rental housing sites nearing the end of their building life-cycle have been advanced for redevelopment”.

Here is a recent news clip about a project on Silver Avenue:

Snapshot of Burnaby’s Rental Housing Market

  • One third of Burnaby’s dwelling units are rental (32,000 of 96,000)
  • 2nd largest rental market (after City of Van – 55,800 units)
  • Current apartment vacancy rate of under 1%
  • Most town centre areas have buildings from 50s/60s – nearing end of life
  • Land costs largely preventing new rental construction despite demand

Role of Municipality and Burnaby Policies to Date

  • Rental Conversion Control Policy (1972) -can’t convert rental to strata
  • Density Bonus Policy (1997) – allows rezoning, 20% of CAC to non-market
  • Tenant Assistance Policy (2015) – requires tenant assistance exceeding RTA

Overall, the City indicates that 7,900 Non-market units have been developed in 154 developments.

Constraints to Addressing Affordable Rental Housing

  • City cannot impose a moratorium on demolition of existing apartments
  • A “Standard of Maintenance Bylaw” imposed on existing apartment owners would not have the desired effect of increasing supply or addressing affordable rents
  • City is looking at ways to build rental housing directly, but needs support of other levels of gov’t
  • A requirement for rental replacement would impair feasibility of new projects

The report points out that it is estimated that 25% of all new strata are rented out, equating to 8,400 rental units in new supply.

CONCLUSION

The general conclusion of the report is that any policy in the near-term that would slow the redevelopment in town centre areas would have an overall worse impact on housing affordability by suppressing the supply of new units. The report does acknowledge the attendant impact development is having on older apartment stock, but infers that this is necessary to generate housing supply and new rental (through strata investment)

While the discussion isn’t likely to end here, it does not appear that there will be any impact on rezoning applications in the near future. The City of Burnaby is effectively keeping things status quo for now.

District of North Vancouver – Rental and Affordable Housing Green Paper (Nov 2, 2015)

Purpose of Report

“This report…provides an overview of the housing situation in the District and identifies the key issues for rental and affordable housing. Through the implementation of the Official Community Plan and other relevant policies, and the administration of the land development application and review process the District has an opportunity to advance key objectives towards protecting existing rental stock and creating more affordable housing.

Emerging developer interest in redeveloping existing rental, and older fractional interest multi-family residential properties in the District has prompted concerns from Council over the potential loss of older, more affordable purpose built rental and low end market ownership units and the potential displacement of lower to moderate income residents.”

Snapshot of Rental Housing in District of North Van

  • 9,020 total market rental units
  • 4,500 estimated secondary suites
  • 850 strata rental units
  • $1,209 average rent per month

Key Housing Challenges in the District of North Van

  • High housing prices relative to income
  • Aging purpose built rental housing stock and lack of renewal
  • Almost 90% of 1,269 rental units built before 1980
  • Existing rental at risk for redevelopment (over half of stock in town centre areas)
  • Displacement of tenants an issue through new market rents
  • Apartment vacancy rate is under 1%
  • Lack of options for rental for families, students and seniors
  • Expiring operating agreements for co-ops and non-profit societies
  • Growing homeless population

Potential Tools to Consider

Below is an outline of some of the tools DNV planning staff are examining and considering to address some of the issues above.

  • Update Standards of Maintenance Bylaw to improve effectiveness
  • Establishment of DNV Housing Corporation to acquire and operate rental
  • Amending 1:1 rental replacement to acquire fewer but more affordable units
  • Phasing development to replace existing rental
  • Create a rent bank
  • Priority processing and potential density bonus for rental applications
  • More affordable housing incentives in rezoning including CACs to fund
  • More affordable ground oriented housing / market value restrictions

CONCLUSION

The District of North Van appears to be taking these issues quite seriously and in fact staff has indicated that they will not consider new applications involving rental housing until these issues are more thoroughly explored.

This may lead to a new rental and affordable housing policy that could potentially impact future rezoning applications. Time will tell which measures actually get implemented. In the short term, the above analysis will almost certainly have the negative effect of slowing rezoning and development applications.


As older rental stock continues to age through Metro Vancouver, we’re likely to see more municipalities exploring ways to address housing affordability, primarily on the rental side.