A towering mixed-use project in the heart of Burnaby's Metrotown has launched sales amid what its developer calls a "different market" compared to the pre-sale frenzies of years past in the Lower Mainland.
Citizen by Anthem Properties is forging ahead with its pre-sale program. At 66 storeys, Citizen will be one of Metrotown's tallest towers, offering a mix of residential, rental, office and retail uses.
The tower will have 372 market condos and townhomes, 200 market rental units and 73 below market rentals. It will also include 40,000 square feet of indoor and outdoor amenities and over 150,000 square feet of retail and office space above six levels of underground parking.
It's located at 4663 Kingsway, across the street from Metropolis shopping centre and Station Square (a previous joint venture master-planned commercial and residential district by Anthem and Beedie Living).
Anthem acquired the Citizen site in 2019, Melissa Howey, vice-president, development at Anthem, said. Howey told RENX in an interview the project received final rezoning adoption in June after a roughly three-and-a-half-year permissions process with the City of Burnaby.
There was enough early positive response to give the team the confidence to press ahead with the project despite a softer pre-sale and commercial market in the city and region due to macroeconomic headwinds and elevated interest rates.
The Bank of Canada policy rate has climbed from 0.5 per cent in March 2022 to five per cent currently.
"We are in a different market"
"We are in a different market today than we were a year-and-a-half, two years ago," Michael Ferreira, senior vice-president, finance and corporate affairs at Anthem, said.
"Our preview period (in the recent past) probably would have been a couple of weeks as opposed to a couple of months."
Overall, the team said it’s pleasantly surprised and is approaching 200 units sold in the first month of sales. Ferreira said the frantic approach to marketing and selling pre-sale homes in the region has dissipated.
In some ways the market is healthier, Ferreira said. "(There's) a little bit of a slower process where people feel like they have time to make a decision, and examine everything that's going on.”
At Citizen, Howey said the strata condos will start on Level 32 and rise from there.
"Below that, we have 200 market rental units, and then below that there are 73 below-market rental units. In Burnaby, they call them inclusionary units and those are affordable rental homes."
The commercial podium would include roughly 150,000 square feet of office and commercial space, including street-level retail units suitable for a coffee shop, a restaurant and other services, Howey said.
The project was officially labeled as Metro King during its permissions process, but is now known and marketed as Citizen. Anthem plans to retain ownership over the commercial units.
Metrotown continues to grow up
"We believe in Burnaby," Howey said. "We're well-invested in Burnaby with master-planned communities, a number of individual towers, rental product, strata product, commercial space.
"We have a great portfolio already in Burnaby and we're always looking to add to that."
Howey said Metrotown is envisioned as Burnaby’s downtown core and is becoming increasingly animated with more restaurants and pedestrians enjoying the street-level retail and restaurants.
"It's really a great place to be, especially on a summer day when all the restaurants are open and the patios are jumping.”
Burnaby continues to develop its town centre strategy, approving large towers in Metrotown as well as in Brentwood, Edmonds and Lougheed, Ferreira said. The common factor is SkyTrain stations in each of those nodes.
Metrotown continues to be an active market for major mixed-use developments for a number of reasons, although the economic situation is starting to slow things down, Mark Goodman, principal with Goodman Commercial in Vancouver, said.
"Metrotown is a well-established neighbourhood and offers all the conveniences developers look for in an urban market: excellent transit connections, a large concentration of amenities in the form of retail and services, and close proximity to large employment hubs both within the neighbourhood and nearby in Vancouver and other parts of Burnaby," Goodman told RENX in an email.
"It also has a relatively clear and consistent community plan so developers can acquire sites and move forward with confidence. The City of Burnaby in general has done a better job than most in trying to incentivize developers," Goodman said.
Market conditions now eating into transactions
However, most development projects moving forward now are sites acquired prior to the spring of 2022, Goodman said.
"There has certainly been a slowdown in new acquisitions given the headwinds facing the development community: significant increases in interest rates, ongoing construction cost inflation, more and higher charges levied on new development from all levels of government, lengthy approvals processes and increasingly complex building codes and design criteria."
Citing his firm’s 2023 Mid-Year Review, Goodman said not a single multifamily property transaction was recorded in all of Burnaby in the first six months of this year.
In 2022, there were 20 transactions, 12 in the first half of the year. Most of those sales would be purpose-built rental apartments, but some of them could eventually be redeveloped.
"While sales have slowed and prices adjusted to the new reality, there is still strong demand from developers who are forward-looking and recognize we are in the midst of a severe supply shortage with record-high population growth,” Goodman said.
Anthem also anticipates a slowdown on future condo developments and pre-sales.
"I don't think you're going to see projects launch unless they can see that there's some fairly strong demand and that they're confident that they're going to be able to meet their pre-sale requirements that lenders impose on them," Ferreira said.