Real estate companies based in British Columbia and operating primarily within the region often describe B.C. as being investment-unfriendly, but companies that operate on a national or global scale remain interested in Vancouver, a common theme across last week's two-day Vancouver Real Estate Forum.

In a keynote address early on Day One, CBRE Canada president and CEO Jon Ramscar, who started his career in Vancouver, said “sophisticated investors choose Canada,” that “quality capital is re-engaging,” and the fundamentals of Vancouver remain undeniable.

“This city is home to some of the most talented entrepreneurs, investors and developers in global real estate,” he said. “And as one of the most supply-constrained markets in global real estate it does not take much to achieve positive demand.”

In March, CBRE published its annual Canadian Real Estate Lenders’ Report, which reported lenders identified Vancouver as the top market in the country, in terms of lender appetite – the first time in 10 years Vancouver had surpassed Toronto. Strong fundamentals across asset classes were cited as a key reason.

Running through asset classes, Ramscar said office investment in Vancouver remains below historic norms and industrial remains “as close as a sure thing as you can get,” while retail insolvencies may increase and the land market remains “not for the faint of heart.”

On the ground

A panel after lunch on Day One focused on investment in Vancouver was moderated by Canada ICI managing director of B.C. Graham Collings and featured Crown Realty Partners managing partner Emily Hanna, BGO CIO Simon Holmes, Realstar CEO Randy Hoffman, and Beedie’s president of industrial Todd Yuen. The group provided some real-world, on-the-ground examples.

Last year, Toronto-based Realstar acquired three rental buildings from local developer PCI Developments, all of which were located in east Vancouver and completed within the past 10 years. The transactions were completed via a share sale and the sale prices have not been reported, but are believed to be $58 million for Yarrow at 444 Kootenay St., $74.25 million for Aster at 435 Boundary Rd., and $60 million for 388 Kaslo at 388 Kaslo St.

Although Hoffman joined Realstar just after the transaction closed, he said he could feel the team’s excitement about the transaction when he joined two weeks later. Appealing factors Hoffman cited were the particular submarket and buying from a quality developer, adding that B.C. is the second largest market for Realstar and that it continue to be an important market for the company.

For BGO, which has made high-profile acquisitions of the Blueprint Residences rental complex on Vancouver Island and Oceanic Plaza office tower in downtown Vancouver in recent months, Holmes said he believes “investor confidence is back in a significant way” and they are continuing to look at new multifamily builds in markets less impacted by condo oversupply, such as Victoria.

Yuen, being the only B.C.-based panel member, said he thinks the climate in B.C. needs to be more friendly to business, but added he believes Canadian Prime Minister Mark Carney has done a good job on the national level raising Canada’s profile — a sentiment that was repeated by many throughout the two-day forum.

The global perspective

A panel on Day Two of the forum then provided a more global perspective, featuring leaders from companies that operate outside of Canada and even outside the continent. Moderated by Peter Senst of CBRE, the panel featured: Adam Ballew, managing director of Spear Street Capital; Janice Lin, head of Canada for Blackstone Real Estate; Chuck We, EVP of Pacific Northwest for Hudson Pacific Properties; and Jason Yong, SVP of investments for Brookfield Asset Management.

Senst started off the panel recalling recent years when capital was moving away from Vancouver, but said he believes it is coming back and real estate in Vancouver is starting to look interesting again.

Now based in New York after growing up in Vancouver, Yong said Brookfield has been trying to break back into Canada and Vancouver because it believes Canada to be one of the most stable capital markets, that Vancouver is one of Canada’s few big markets, and it is well-positioned in the long-term, using an analogy of the Vancouver Canucks hockey team that drew laughs from the crowd.

Over at Blackstone, Lin said she views Canada as a very favourable market in which to invest and Vancouver as fundamentally a supply-constrained market, classifying the investment capital as “very core or core-plus capital” in Vancouver.

She also noted Pure Industrial – taken private by Blackstone in 2018 – just had its best year in terms of leasing. Lin believes Vancouver will benefit from the AI boom tailwinds and noted last-mile delivery is becoming more important, benefiting the industrial sector.

The only Vancouver-based member of the panel was less enthusiastic. We, of office-focused Hudson Pacific Properties — co-owners of the four-tower Bentall Centre office complex in downtown Vancouver — said he believes better options can be found down the west coast, HPP’s domain, with properties available at 40 to 50 per cent below replacement cost.

He still graded Vancouver a seven out of 10 for investment, however: “Vancouver just looks good on you as an investor.”