Saddle up
Vancouver’s Aquilini Investment Group has bought more property in Washington state wine country.
The company’s real estate holdings now include 694 acres of vineyard land in the Horse Heaven Hills southwest of Prosser, Washington. The transaction, which is set to close on or before May 9, gives the Aquilini family approximately 335 acres of developed vineyard. The property was bought out of receivership for US$6.89 million.
The deal follows the family’s purchase of 670 acres from the Kennewick Irrigation District in November for US$8.8 million.
With approximately 1,364 acres of vineyard land in hand, Aquilini’s plans are piquing curiosity.
Aquilini is no stranger to the food or hospitality business, most recently acquiring Vancouver’s Toptable Group of restaurants in March in addition to owning extensive berry-growing operations. The company remains mum – but optimistic – on its plans for Washington state.
“It is our intention to invest our resources and capital to maximize the opportunity,” is all Luigi Aquilini, group principal, would say in a comment to media following the latest purchase in Washington state.
Record year forecast
“Vancouver is expecting a record year in 2014,” according to the latest overview of the corporate housing and executive suite market from the Corporate Housing Providers Association (CHPA) of Indianapolis.
And to what does the city owe this boon?
The numbers in the report, which has tracked this segment of the real estate market in the city since 2010, indicate that the supply of units is being met with strong demand and steady rates.
Corporate housing is typically used to accommodate temporary workers, as well as people who require short-term accommodation when they’re displaced by an event insurance covers. Similar to hotel accommodation, it provides companies with a reliable pool of rooms. Vancouver-based HighStreet Accommodations, for example, aims to house people within two hours of a request. The average length of stay last year was 81 days.
Key sources of demand in recent years have been the software sector, with the strength of the market increasing as the financial crisis of 2008 falls further into the past.
Conditions improved markedly following 2010, the first year for which the CHPA gathered data on the Vancouver market. Average daily rates have typically been between $126 and $128 in the past three years, up from $108 in 2010. Similarly, occupancy is running at 83% – up from just 68% four years ago.
Combined with an expected reduction of more than 300 units this year that will tighten supply, prospects for ongoing strength in the market are good.
There are currently an estimated 1,707 designated corporate housing units in the city.
Record year witnessed
Several companies unleashed a tide of data at the end of the first quarter regarding the volume of investment transactions that took place across B.C. last year.
Among the notable phenomena was the deal volume in the second half of the year, once it was known who won the provincial election. Whether coincidence or just greater confidence in economic conditions as a whole, the activity pushed the year to one of the busiest ever seen.
But what makes the numbers really fun to examine are the variations between reports.
Avison Young identified 119 transactions worth $5 million or more, for an aggregate transaction value of $2.12 billion.
It all sounds impressive, until the myriad small deals in the Lower Mainland are factored in, and that’s where the numbers become interesting.
Real Estate Board of Greater Vancouver figures offer the most ambitious picture, with 1,799 commercial real estate sales worth more than $5.5 billion.
RealNet Canada Inc., limiting itself to sales valued at $1 million or more, pegs the aggregate value of deals at $5.1 billion, with research director Paul Richter noting transaction activity had “levelled off, albeit at a historically high level.”
That level was a notch lower in the opinion of Colliers International, which – though it also drew on RealNet numbers – identified 575 investment sales in the region through 2013, with an aggregate value of $3.1 billion.
While new development will feed investors’ appetites this year, a constrained land supply will keep values high and opportunities slim – potentially cooling activity until fresh opportunities arise. •
