While the BC Real Estate Association says normalization continued in B.C. housing markets in January, a recent Colliers International report suggests that 2011 will be a competitive year for residential highrise builders.
Polygon Homes Ltd. president and CEO Neil Chrystal spoke of the emerging competition in remarks to the Urban Development Institute’s annual forecast luncheon in January; Colliers fleshes out the picture. It reports that marketers were offering 238 projects in Metro Vancouver at the end of 2010, an all-time high, even as inventories rose and prices hammered affordability.
With tighter rules for mortgage qualifications kicking in this spring, Scott Brown, senior vice-president, residential project marketing and sales with Colliers, expects project marketers to experience more competitive pressure.
“We are concerned that the projects targeting the first-time buyer may experience slower absorptions as these changes come into effect,” he writes in the report.
Burnaby’s Metrotown is one area with plenty of standing inventory and new projects jostling for position that illustrates the risks.
“[We’re] not necessarily predicting trouble on the horizon,” Brown said last week. “[We’re] predicting fascinating markets to watch, and things could go wrong. And you really have to get your marketing, and your positioning and your pricing right, or you could be the one project that kind of gets stuck.”
Sales of properties from the Holman Lang Group of wineries in the Okanagan are showing there’s still demand – and even competition – for appropriately priced vineyard and orchard land.
Recent court-ordered sales have seen properties from the group – which entered receivership in November 2010 – trade for above the appraised value. A 12.2-acre property with cherry orchard, single-family home, two cabins and shed at 823 Sworder Road sold at the beginning of February to Michael Dinn and Heidi Noble, operators of Joie Farm in Naramata. The couple paid $1.2 million for the property, which was appraised at the time of receivership at $989,000. Documents filed in BC Supreme Court chart an interesting history for the pricing of the property.
The Bank of Montreal (BMO), at the start of proceedings against the Holman Lang Group in October 2009, listed the property at $1.3 million. The price was reduced in March 2010 to $1,225,000 and garnered one offer that the bank rejected: $1,075,000. BMO subsequently reduced the price again, to $1,125,000. The next offer came in even lower than the original offer, at $830,000, prompting the bank to counter with $1.1 million. The final price reflects satisfaction of both the lender’s requirements and market forces.There were five offers for the Sworder property, said Michael Cheevers, president of receiver Wolrige Mahon Ltd. A tender process for the Holman Lang assets with a firm deadline encouraged competitive bidding, ensuring a final price fair for all concerned.Other sales of Holman Lang properties include Stonehill Estate Winery, a 9.6-acre property that sold for $1.5 million to a numbered company whose directors include winemaker Gavin Miller, and a 12-acre orchard property that sold to a Penticton buyer for $1.1 million.
Vancouver-based Sunstone Realty Advisors Inc. is swelling the tide of Canadian investors picking up assets in the U.S. Sunstone bought Xona Resort Suites Scottsdale in Arizona at the end of January for US$34 million.
The 431-suite hotel will operate under the management of another Vancouver-based company, O’Neill Hotels and Resorts Ltd., through its U.S. subsidiary TRX Management LLC.
Sunstone is headed by Steve Evans and Darren Latoski, who also serves as CEO of Pure Industrial REIT. The deal gives Sunstone a unique property on a nine-acre site. The hotel has plenty of upside: New York-based Trinity Hotel Investors LLC bought it in 2006 for US$77 million but defaulted on a US$95 million debt in 2009. Sunstone was able to pick up the property from foreclosure and plans to pursue US$4 million in upgrades to the property’s interior and exterior.
Sunstone has its eye on other properties in the southwest, including a hotel in Tempe, Arizona, and apartment properties in Phoenix and Dallas.
O’Neill, for its part, operates four hotels in Western Canada, including the Oceanfront Grand Resort and Marina in Cowichan Bay; the Coast Blackcomb Suites and Westin Resort & Spa in Whistler; and the Westin Grand Hotel in Vancouver.