The “super rare” sale of a 1.35-acre site in East Vancouver, an entire city block comprising six single-family home lots, will pave the way for a condo project to meet the “insatiable” demand for additional housing in the region.
Mark Goodman and Cynthia Jagger, principals of Goodman Commercial Inc., and publishers of the Goodman Report, listed the property for $31.9 million. The sale agreement is binding, but has not closed so the buyer and seller are not being identified at this point.
Goodman said the property is being acquired by a well-known local real estate developer for close to the asking price. The vendor is a private investor/developer in the area.
“We assisted him in assembling the block a few years earlier,” said Goodman, whose firm represented the homeowners in that first transaction. “There’s six single-family homes and the lots are quite big – each one is 55 feet wide and 178 feet deep, which is pretty significant.”
Goodman said his understanding is that the buyer will build something very similar to what was envisioned in the marketing package for the property on Earles Street.
“I think it’s reasonable to say they’re going to build roughly 130 (condo) units with two separate buildings – four-storey structures,” said Goodman.
Norquay Village undergoing transformation
The property is located in the Norquay Village neighbourhood, which is about a 15- to 20-minute drive to downtown Vancouver.
“It’s primarily a residential neighbourhood with single-detached homes and we’re seeing a rapid change with new projects, apartment projects, since the zoning amendments in 2016,” said Goodman. “The location is very close to rapid transit . . . a lot of amenities along Kingsway. It’s a very central, transit-oriented neighbourhood.”
Goodman said it’s “super rare” to sell an entire city block.
“Just to have six different owners over time and consolidate that to one owner is a feat in itself. And then to sell it at this price point is fantastic. In 2018 to 2020, it was a bit of a softer market,” said Goodman. “But now there’s increasing demand, unprecedented, and in turn prices have gone up for development sites.”
“Massive” response to transaction
When Goodman sent out news of the sale through its report and social media channels, he said the response was “massive.”
“All the developers want to know where prices are, because there hasn’t been a lot of sites of this scale that have transacted.
“So this is really going to be a benchmark sale for the industry and it will show renewed confidence in the marketplace and developers are looking for sites, particularly of scale. And this is a perfect example of where the market is today.”
He said there are very few residential listings on the market, but there is an “insatiable” demand for housing. Many people are on the move and British Columbia is a popular destination, particularly Metro Vancouver.
“We have fared relatively well during the pandemic and we are a safe place to invest and to live. All the fundamentals are here for a very positive outlook for our province,” said Goodman.
“The economy is doing well. I just think it’s a very good place to live and it’s being reflected in our pricing.”
Metro Vancouver multires off to fast start
Goodman and Jagger are leading commercial real estate brokers specializing in apartment buildings, commercial and industrial property and development sites throughout Metro Vancouver.
In 2021, they completed or firmed-up 39 transactions totalling $590 million in sales volume.
So far this year, amid a frenetic burst of activity, they have seven transactions totalling $114 million in sales.
The East Vancouver deal on Earles Street took one year of negotiation to conclude.
Goodman said the traditional metrics investors use for buying property in many cases have changed because investors today are concerned about inflation. Thus, hard assets such as real estate have become a sought-after hedge against inflation.
In fact, Goodman said many investors buying development sites for investment properties haven’t previously purchased real estate, multiresidential or land in Vancouver.
“Insane demand” by investors for housing
“We’ve sold properties to people who have made millions in Bitcoin. We have sold properties and investments to groups that cashed out of the stock market and are looking to diversify. One client made a seven-figure windfall selling software to a high tech company and has bought three apartment buildings from us, unconditionally,” said Goodman.
“So we’re seeing insane demand driven by a multitude of factors, inflation, stability of what Vancouver and what multifamily real estate offers, also with being bullish on Vancouver and B.C. in general, the economy and the in-migration, these are all very strong positive factors.
“On the flipside, there’s a lot of people wanting to sell, not just land and development sites, but rental apartment buildings which we focus in. And the reason for that is these buildings are aging. They’re 50 to 60 years old.
“It’s very difficult to rejuvenate these buildings because there’s very stringent rules on tenant relocation. So it’s proven difficult to update suites. Insurance has increased. It’s gone through the roof.
“In some cases, our clients can’t even get insured. . . . End of discussion and have to sell.”
There are also numerous increasing costs. Goodman likens it to the passing on of the baton to a different type of investor, perhaps more entrepreneurial, someone who can play the long game.
Many owners of these buildings have owned them for a long time and are now cashing out.
“What it’s done is created the most liquid and active market in Metro Vancouver history,” Goodman concluded.