Construction of the first new office tower in downtown Vancouver since the completion of the second phase of Bentall 5 in 2007 will occur by the end of September.
Several new towers have been discussed for the downtown core, but Oxford Properties Group will be the first to make good on its plans when it breaks ground on 1021 West Hastings Street in the third quarter. The 35-storey development is a joint venture between Oxford and the Canada Pension Plan Investment Board (CPPIB). It will offer 270,000 square feet of office space with an average floor plate of approximately 8,000 square feet when it completes in summer 2014.
The announcement follows a year of speculation as to which downtown property would be the first to feel the shovel’s point. Plans for Bentall Kennedy LP, long a favourite with its planned development at 745 Thurlow Street, has been followed by announcements regarding new office developments as part of a mixed-use complex Reliance Properties Ltd. and the Jim Pattison Group plan for Burrard and Drake streets as well as Westbank Projects Corp.’s Telus Gardens at West Georgia and Richards streets.
Telus Gardens was tipped as a potential front-runner given Telus’ presence as an anchor for the office component, but rezoning of the site remains in progress. And, despite being well ahead in civic processes, 745 Thurlow will require a significant commitment from tenants prior to construction.
“The privately owned sites are going to need construction financing to get those off the ground, and they’re going to need preleasing. And preleasing in this city is difficult,” CB Richard Ellis executive vice-president Jim Szabo told commercial real estate association NAIOP last fall.
Oxford’s project, while backed by CPPIB cash, hopes to attract tenants on the strength of its smaller floor plates (Vancouver is predominantly a small-tenant market) as well as being first to market in an environment where CB Richard Ellis reports triple-A office vacancies sit at 1.6% (down from 5.6% a year ago) and 4.3% overall.
“Vancouver is a very healthy market,” said Dave Routledge, vice-president, real estate management, for Oxford.
He added that vacancies at Oxford’s own properties are running at 1%.
“We’re very comfortable making a commitment to Vancouver. We’ve had great feedback from the tenant community on the project.”
Discussions with potential tenants are ongoing, and Routledge expects an announcement of the first tenant might be possible within six to 12 months.
“But it’s a dynamic market, and it’s hard to call these things,” he said. “So it’s a little bit hard to make that call.”
Recreational property is a good long-term investment, according to 87% of current owners and prospective buyers surveyed in B.C. for Royal LePage Real Estate Services.
Sure, owners and folks looking to buy might be biased, but the semi-annual recreational property report Royal LePage produces suggests that pricing is probably now in buyers’ favour.
“Now is the time to buy, whether you’re looking to get into the market for recreational purposes, as an investment or both,” Steve Gray, managing broker of Royal LePage Kelowna, said in the report.
“Be cautious about waiting, because prices are as competitive as they’re going to get.”
Waterfront properties in the Kelowna area, in short supply relative to demand, have been stuck in the $650,000 to $1.5 million range for the past three years.
Meanwhile, in Whistler, EcOasis Properties Ltd. recently released the final 18 lots in Kadenwood, a project it acquired late last year from Intrawest.
The project has a total of 60 home sites; EcOasis acquired 26 as part of the deal. It has sold eight of those to date and released the final 18 lots at the end of June.
Keith McIvor, vice-president of sales with EcOasis, said the property has year-round appeal, but the summer months are best for viewing the topography of a project that bills itself as a ski-in-ski-out community with its own private gondola.
Fifteen homes are complete at Kadenwood, with a further six under construction and three more ready to rise later this year.
McIvor said offshore buyers have shown the strongest interest in the project, followed by purchasers from the Lower Mainland.
Vancouver tops the country when it comes to spending on renovations, Canada Mortgage and Housing Corp. (CMHC) reports.
Renovators in Vancouver spent an average of $15,709 per household in 2010. This was up from an average of $13,457 in 2009.
The percentage of local homeowners renovating in 2010 was 41%, a point below the national average of 42%. Renovations, for survey purposes, include anything from large-scale makeovers to painting and repairs.
CMHC expects renovation projects in Vancouver will average $13,112 apiece this year. The expense is one reason why Vancouver trails the country in home makeovers, with just 35% of homeowners planning renovations.
CMHC’s findings echo an RBC Royal Bank survey last fall that found B.C. homeowners will lag behind the country when it comes to renovations in 2011 and 2012.
CMHC nevertheless expects B.C. homeowners to spend $7.8 billion on renovation this year, up from $7.3 billion in 2010.