GWL Realty Advisors (GWLRA) has broken ground on a 21-storey market rental tower on Vancouver’s Robson Street. It’s a project that represents the organization’s increasing appetite for the high-demand, high-cash-flow asset class in the Metro Vancouver region.
The building is located at the corner of Robson and Nicola Streets in Vancouver’s West End neighbourhood. It will add 128 rental units to an area and city that is experiencing slim-to-no vacancy in the purpose-built rental market.
GWLRA is developing the project on behalf of the owner, the London Life Insurance Company.
The project represents the type of community building GWLRA wants to produce more of in the city, said Geoff Heu, vice-president of development, Western Canada.
A third of the building will be made up of two- and three-bedroom units suitable for families. The tower also includes fitness, yoga and lounge rooms as well as a rooftop patio with dining space.
The penthouse floor of the tower will be a common area for all tenants. The building will also be pet- and cyclist-friendly.
The West End has nearly a third of Vancouver’s rental stock, but also among the highest land costs in the region. Many students, young professionals and seniors live in the area in which the city, residents and developers are facing the disruptive challenge of replacing aging stock with new rental homes.
About 80 per cent of the homes in the West End are one-bedroom units or studio apartments, according to the city’s West End Community Plan, which details its strategy to promote the development of new rental stock and social housing in exchange for density bonuses.
Vancouver apartments “safe home” for capital
GWLRA said the new building will be held and managed on a long-term basis.
New rental assets are a “very safe home for deploying institutional capital,” Heu said. “We were able to find a site at the right time at the right location where it made financial sense.”
The building is expected to complete in early 2021 and will be managed by GWLRA.
The site formerly had two buildings — an older residential building in the rear and a residential building in front with retail at street level.
GWLRA opted for rental. “We would like to do more (rental). . . . In the Lower Mainland, this will be our fourth project in about 10 years. But, it is getting harder and harder to do,” said Heu, who blamed sky-high land values as the main obstacle.
GWLRA’s portfolio focused on office
About 50 per cent of GWLRA’s portfolio is office, another 30 per cent is retail, 10 per cent is industrial and 10 per cent multi-family, said Rob Kavanagh, vice-president of asset management for GWLRA.
“We don’t build anything or acquire anything that is not considered to be a long-term investment for either us or one of their institutional clients,” he said. “High-quality office buildings, neighbourhood retail centres, industrial buildings and multi-family rental are key product.”
GWLRA remains mostly focused on Montreal, Ottawa, Calgary and Vancouver.
“Vancouver is definitely a city, a region, that we want to continue to grow through acquisitions and development across all four of our major asset classes,” he said.
Work continues on Vancouver Centre II
Meanwhile, work continues on GWLRA’s Vancouver Centre II office tower.
The 33-storey building is being constructed on spec for the owners: Healthcare of Ontario Pension Plan (HOOPP), GWL Real Estate Fund and the London Life Real Estate Fund.
The class-AAA, 371,000-square-foot tower is being built at 753 Seymour St. as the next phase of the Vancouver Centre complex, which also includes the 1976-built Scotia Tower and the Vancouver Centre Mall.
In November, the developers announced video game maker Kabam would be taking 30 per cent of the new building.
“We are working on a bunch of opportunities and hope to be able to announce additional leases later this year,” Kavanagh said. “There is nothing done at this point in time in addition to the Kabam deal.”
Heu said excavation on the site remains underway. “We will be at the bottom in early March and we will be heading back up from then. We’re on schedule for fall 2021 delivery.”