Sales of purpose-built multifamily rental buildings totalled 121 in the Lower Mainland in 2014, up from 94 in 2013.
But an increase in transactions doesn’t mean the supply has increased. Rather, according to the latest report from apartment brokers David and Mark Goodman, demand remains unrelenting, meaning that buyers are seeking properties even as the properties are disappearing.
Indeed, approximately a quarter – 31 of the 121 properties sold last year – are slated for demolition, removing about 700 rental suites from the market.
“Most of the buildings slated to be taken down are two- to three-storey wood-frame buildings about 55 years old that … have clearly reached the end of their economic lives,” the report states.
While about 3,000 new purpose-built rental units have been built across the region in each of the last two years, the Goodmans forecast “unprecedented demand for apartment buildings” in the months ahead.
“We still do not have enough product to feed the buyer appetite right now,” said Rob Greer, a principal with Avison Young in Vancouver who recently represented the purchaser of Victoria’s Parklyon Apartments, a 34-unit rental property that sold for $5.25 million.
The property, in a prime location and well maintained, was snapped up by private investors at a price that reflected its rarity. But similar conditions exist across the province, and Greer expects limited sales activity through 2015’s first quarter.
“We’re hoping to list a portfolio in the Okanagan in the next month where we think we’re going to get a lot of interest,” he said. “[But] we’re not anticipating a lot of larger sale activity, in the first quarter, at least.”
Small victory
Metro Vancouver housing starts exceeded expectations in a small way as December came to a close, with the Canada Mortgage and Housing Corp. (CMHC) reporting 300-odd sales beyond the previous forecast.
Starts for 2014 totalled 19,212 versus a projection of 18,900.
This may be good news as the region enters 2015, in which CMHC anticipates starts to slow down slightly to 18,700 units. The slight bump up in starts for 2014 suggests that 2015 might be rosier than expected, though one thing’s guaranteed: multi-family will lead the way, as it did in 2014 with 14,838 starts.
Rare vintage
A year ago, as many as a 10th of B.C. wineries were touted as being for sale. Some were formally listed with an agent; owners of others were quietly shopping them around in the hope of maintaining a sense of business as usual in an industry where it’s hard to keep buzz from bubbling up.
But if the industry feared sales and rumours of sales would suggest to outsiders an imminent apocalypse in the industry, Charlie Baessler said opportunities simply aren’t as plentiful as observers might think.
Baessler, manager and winemaker of Corcelettes Estate Winery, recently secured the former Herder Winery property near Keremeos for his operation. Herder was one of the many wineries on the market a year ago, and now – for an attractive but undisclosed price – is Corcelettes’ new headquarters.
The 14.6-acre property comes with six acres of vines, three acres prepared for planting and three acres zoned for commercial use – allowing for the future addition of a warehouse, guest house or other facility.
It’s also adjacent to Clos du Soleil Winery, another respected vintner, and the Grist Mill and Gardens, a popular tourist destination and event venue.
“We had looked at a couple of others, but this one far outweighed any of the other benefits that came with the other locations,” Baessler said of the property. “It was a unique opportunity; it had all the right moving parts, for sure.”
The price was also right, thanks in part to its location in the Similkameen, where vineyards sell for a cut below those of the popular Okanagan.
