Long-time Vancouver developer Gino Nonni is returning to his family roots with the rebranding of Serracan Properties and the launch of the Nonni Property Group.
The Western Canadian development company with land holdings in B.C. and Alberta is moving further into the purpose-built rental space as part of its rebrand.
Nonni founded Serracan in 2000 and he recently sold off its office building at 510 Seymour St. in downtown Vancouver where the company is headquartered. The firm has stayed on as tenants.
The company has also redeveloped a prominent 1.77-acre mixed-use site on the south side of the Fraser River called the Fraser Commons – the former Blue Boy hotel – at Southeast Marine Drive and Fraser Street.
In more recent years, it was a tired-looking, 100-room Super 8 hotel.
It was a long, complex process. Serracan had purchased the South Vancouver site in 2013 and embarked on a rezoning application to build 363 condo units with a two-level commercial plaza, large central courtyard, 37-space daycare and retail at grade.
It sold the vast majority of presale units in 2018 and they completed in 2021 and 2022.
It then sold a few strata commercial spaces and retained ownership of all the commercial retail, for lease, as well as 22 per cent of the residential units for rentals.
Residential rental strategy
Residential rental is a key part of Nonni’s future strategy, in a climate that has seen interest rates go up and rental rates climb.
“We ended up keeping a bunch of units to rent, because we felt it was a good long-term hold for our organization, which is one of our requirements,” said Nonni, the company founder and chief executive officer. “We have developed (properties) for sale, but we also develop to hold, or, as a hybrid, we may develop something and hold part of it for rent, and just rent it out and keep it for long-term cash-flow purposes.
“But our philosophy as a family company — and we are privately held and we have the benefit of making those decisions in an autonomous way — is if we feel that it is the right move to keep something for longer-term sustainability and for financial enhancement, then we will do that.”
Serracan has other residential sites in the pipeline in different areas as well, still in the rezoning phase and too early to talk about publicly.
“(Residential) is part and parcel of the rebranding. We decided we are entering into a different cycle. We decided to just go back to our roots and use Nonni, my last name obviously, as the brand. I’m old and I’ve been around for a long time,” he said, laughing.
“Serracan was really a holding company and then we ended up using it as the development platform that commenced many years ago.
“In terms of our development operations, we are focusing on purpose-built residential rental and industrial multi-tenant developments for retention purposes, for lease. We’ve got holdings right now that are in a sense ripe for new product . . . in other words, tear the old product down and build new on the site.”
Potential geographic expansion
About half of its assets are industrial properties. The industrial is “pretty conventional,” multi-tenant, smaller-bay product, which is already part of the portfolio, he says.
The company is contemplating residential rental projects in Calgary and in the Lower Mainland, and not necessarily high-rise concrete rental, but six-storey frame, for example, Nonni said.
“The residential part of our business commenced with Fraser Commons in terms of the rental (units) because we have decided to hold onto that,” he said. “The balance (of residential) is through developments in the planning stages right now. We’ve got probably something like 400 units in the planning stages, but not zoned yet, so over the next 24 to 48 months . . .”
Many of the Fraser Commons presale purchasers were a new kind of investor – parents who intend to rent the units out until their kids are grown and can take them over.
“We were very happy with it and the fact that we ended up renting a lot of units in less than four months. The rental market was very strong and we were pleased and surprised that it was as strong as it was.”
Vancouver office property sale
He purchased the site for his future office mid-rise at 510 Seymour St. at the same time as the former hotel site, in 2013.
Two old retail buildings had occupied the downtown corner for decades. With a floor plate size of 8,400 square feet, Serracan developed a glazed jewel box of a building, with Adler University as the anchor tenant.
Because it was built as part of a partnership that was winding down, Serracan put the building on the market a few months ago, even though they’d intended to hold onto it.
“We had multiple bids,” said Nonni, “And we sold through a Canadian company to a European family. I am under confidentiality in terms of the purchase price, but it was competitive in the final negotiations.
“The buyer it ended up with was very happy. And we were very pleased that of all the office buildings available in the world they chose Vancouver and they chose our asset.
“They have great upside in terms of lease rates rising in the mid-to-long term. They will do well holding onto it and moving forward.”
The level of interest from institutional and global investors and others shows that the fundamentals are there, he said.
“I think the market is interesting right now. It is expensive in Vancouver, and I think the developers with historical land values are going to be at an advantage, particularly if they want to build on it,” he said. “I mean, we just sold an office building to a family from Europe.
“It’s really interesting, isn’t it? When you step back and think about it, there is a lot pension fund capital invested in this city.
“And when you look at the amount of capital invested in real estate and the infrastructure going on as well, you’ve got to really understand there is a foundation of strength that is not going away.”