North Saanich

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55-storey skyscraper, one of the tallest city?s building will be in Downtown Vancouver

Dan Fumano: Long, winding road leads to ‘twisting’ tower pitched for ex-Expo site

Dan Fumano
The Vancouver Sun

The tower proposed for the north end of the Granville Bridge is striking, featuring what its architects call “undulating curves” inspired by a dancer. But the ground below also has a noteworthy story, which has been long, complex and, at times, legally contentious.

Vancouver council will consider a proposal this week for the 55-storey skyscraper, which would be one of the city’s taller buildings, intended to form a southern “gateway” to downtown along with Vancouver House’s similarly twisting design just across the Granville Bridge to the west.

The property, at 601 Beach Crescent near False Creek’s north shore, was part of the Expo 86 lands. But in the decades since, this piece of prime real estate has sat undeveloped. The site was owned by Concord Pacific, the international player that bought the Expo land and has already developed much of it. During a four-year process with the City of Vancouver in the 1990s negotiating the rezoning of some of Concord’s lands, the developer transferred 601 Beach to the city in 1999 and the site was earmarked for social housing.


In 2016, the city put 601 Beach up for sale. The property was sold to a private developer, Pinnacle International, with the stipulation that future development must include 152 social housing units, with market housing making up the rest of the project, subject to council’s decision on the rezoning.

The sale was approved in 2016 by Vancouver’s then-Vision-majority council. As with all transactions involving the disposition of city-owned real estate, the decision was made in a closed-door meeting, a city representative said last week, so no further details were available, other than confirming it required an affirmative vote by two-thirds of council.

Within months of the city putting 601 Beach up for sale in 2016, Concord sued the city, alleging the plan to sell the lot for commercial development would violate the terms of the deal through which Concord had conveyed the land to the city.

Concord alleged in court filings that if the property was “sold by the City to a third party to be developed for purposes other than low-rise non-profit housing (e.g., for the purpose of creating a highrise condominium tower), Concord will suffer irreparable commercial harm.”

Concord had notified the city that it is “ready, willing and able” to purchase the site “at an equitable price,” the notice of claim said.

The city denied the plan to sell the land with an eye to future development breached the agreement with Concord and rejected the idea Concord had suffered or would suffer any harm.

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A city representative confirmed last week that Concord’s lawsuit involving 601 Beach “has yet to resolve.”

Pinnacle spokeswoman Rachel Thexton said the Concord lawsuit does not affect Pinnacle or its plans for 601 Beach in any way.

The city declined Postmedia’s request last week for an interview to discuss, in general, the strategy of selling city-owned land on the private market to get affordable housing built.

Ann McAfee, Vancouver’s co-director of planning before her retirement in 2006, said that in her three decades at city hall, the city generally didn’t generally sell city-owned property.

“During my time, any city lands stayed as city lands,” McAfee said.

Affordable homes are expensive. Even if the city received free land, building housing and operating it at below-market rents takes a lot of money, more than municipalities have typically been able to afford.

In earlier decades, McAfee said, the city worked with the federal government, which funded non-market housing on city-owned land, such as the development of False Creek’s south shore in the 1970s.

But the federal government pulled out of housing in the 1990s. In 2016, when the city sold 601 Beach, the provincial and federal governments weren’t investing in affordable housing, while Vancouver’s affordability crisis was escalating.

“I suppose that was understandable at the time,” McAfee said. “But I certainly didn’t recommend to council any sales during the time I was running it.”

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Cameron Gray, the longtime director of the City of Vancouver’s Housing Centre, who retired in 2010, said that while the city generally tried to retain property instead of selling it, “in the absence of federal and provincial money, that’s probably what you end up having to do” to get social housing built.

The question before council this week is not whether it was a good idea for the city to sell 601 Beach in 2016. Instead, council must decide whether Pinnacle’s application in 2020 is good for the city now and in the future.

The non-market housing units’ affordability levels will be determined later, but those 152 units would get the city a fair bit closer to its social housing targets, which have lagged behind for years. That helps explain why several social housing groups, including the B.C. Non-Profit Housing Association, have written to the city to support 601 Beach.

Meanwhile, some neighbouring residents have mounted their opposition, with many addressing council earlier this month during the first four hours of public hearing for the project.

Some councillors, based on questions at the public hearing’s first night, seem to share those opponents’ concerns. Others seem interested in seeing housing on a site which has, for decades, been a gravel lot.

They’re set to decide Wednesday whether or not to add a new twist to Vancouver’s skyline.


© 2020 Vancouver Sun

American innovative tool to reduce cost effective and save time

How First American uses automated valuation models to reduce costs and save time

Clayton Jarvis

As resistant as the mortgage industry can sometimes seem when it comes to innovation, its growing acceptance of data analytics as a tool for enhancing performance in almost every facet of the business, from marketing to product development, is happening at a rapid clip.

The logical step after a lender or servicer has secured access to both robust data and a crack team to find meaning in it is to start using it to automate key processes, which often leads to better decisions being made and the freeing up invaluable human capital. Through the use of automated valuation models, that’s the direction Jon Wierks is taking First American Financial.

Wierks, who was recently named vice president of data and analytics at First American, took some time to answer MPA’s questions about AVMs, their value, and the role they will play in the next phase of the insurer’s evolution. The following interview has been edited for length and clarity.


Mortgage Professional America: Congrats on the new position. How well will your prior work experiences transfer to FirstAm? What are your thoughts on your new position?
Jon Wierks:
Thank you very much! I am very excited about this new opportunity. I have been creating automated valuation models (AVMs) and related analytics products for over 25 years, so this role is right in my wheelhouse. My goal is to provide our customers with a line of top-tier, cutting-edge AVM and collateral risk products. Working with First American’s incredible data science teams and using our databases, we have an opportunity to continue enhancing products already in the market, as well as deliver some exciting offerings in the pipeline.


MPA: Tell us a bit about how automated valuation models work and why you’ve been so interested in working with them over the years.
Property valuation is so interesting because it’s always a moving target and there are a huge number of variables involved. For example, there are the property’s physical characteristics, plus its current condition, geospatial factors that influence value, local/national/global economic indicators, and, at the transactional level, the motivations of the buyer and seller. 

Creating AVMs to estimate the property value never gets old because there are always new modeling techniques being invented or becoming feasible because of advances in technology. AVMs today need to use multiple valuation methodologies to reach competitive performance. These include rules-based emulation, standard regression, and the latest machine-learning techniques. AVMs continue to evolve due to the ongoing enhancements in modeling, as well as the ever-increasing amounts and types of data available. Advances in deriving geospatial, condition, neighborhood and other data will continue to fuel the next generation of AVMs. 


MPA: How will AVMs integrate with the human component at FirstAm? Is there a threat that they might overtake the human component in terms of importance? Have they already?
Appraisers and, for that matter, origination lenders, are already using some form of valuation analytics or AVMs in their analysis of properties today, and this will no doubt continue to expand. AVMs are already an important component of the appraisal and valuation process. The use of AVMs complements the appraisers’ evaluation and can only help in delivering a more accurate and robust assessment of value. As the analysis of public record data, evaluation of recent sales, and the overall logic of the AVMs continue to advance, we’ll continue to see more precise, calculated estimates of value that the industry can use in certain transactions in certain geographical areas with little or no human involvement. 

I don’t foresee AVMs overtaking the human component of the industry. Rather, they can and will be a complement to help people be more productive. We are seeing continued increases in appraisal waiver scenarios and AVMs can play a role as a solution, or part of hybrid products, to help maintain solid collateral risk protocols.


MPA: How big a presence do AVMs have in the mortgage insurance industry right now? Are they something all players in the space have access to or are they more of a growing trend?
AVMs have a natural place in the mortgage insurance industry due to the need for fast and cost-effective ongoing property value monitoring. AVMs provide mortgage insurance firms with the opportunity add another tool for quality control on a one-off basis, but the cost and efficiency of AVMs also provide an opportunity for large portfolio-level analysis and review.

For mortgage insurance companies especially, the ability to quickly, economically and accurately assess the value of collateral they are taking on liabilities for is huge and AVMs have come to play a key role there.


MPA: How have they evolved over the years?

AVMs have evolved into accurate, easy-to-use tools. The first AVMs were often a comp search and calculator tool using public record data only. Today’s AVM has become a sophisticated model using multiple valuation methodologies. Advances in computing technology allow AVMs to deliver virtually instantaneous results using an ever-expanding data set. Geospatial, MLS, appraisal, replacement cost, and derived information, such as condition and quality, are now in play. All competitive AVM offerings are using multiple sub-methodologies based on machine learning, hedonic, statistical and rules techniques.


MPA: What’s the business case for more automation in the mortgage insurance space? What kind of an investment should companies who want to implement AVMs be preparing for, and what exactly will they need to invest in?
I would contend that the drive and business case for more automation extends beyond just the mortgage insurance space and includes all components of the mortgage lifecycle. Industries are always trying to reduce cost and save time, so naturally firms are looking to smart automation as a solution.

One of the benefits to AVM products is not only the value they provide, but additional information that can be gleaned from the report. For example, First American’s AVM leverages our data to deliver relevant property information, market intelligence and the valuation components. Investment companies should look at all data available and ensure it is all being put into good practice.

There are AVM solutions available for any budget – ranging from manual single order from a vendor’s website to APIs that are fully integrated into custom LOS systems. It is key to work with partners that can help maximize the investment and fit the overall strategy. Used properly, AVMs can significantly lower costs and turn-around times for users and, also consumers, while providing a sound tool for analysis.


Copyright © 2020 Key Media Pty Ltd

Covid disrupt housing market expected by several Canadian

Moody’s: Significantly lower home prices expected in several Canadian markets

Ephraim Vecina
Mortgage Broker News

While federal financial aid and mortgage deferrals have propelled some price growth recently, it will be only a matter of time before the full negative impact of the COVID-19 pandemic works its way through the housing market, according to a new report by Moody’s Analytics.

In its newest Canada Housing Market Outlook, Moody’s said that the housing market’s fundamentals will weaken in 2021 as mounting unemployment and lower purchasing power will keep a substantial number of consumers from entering the market.

“House prices are set to fall from their current levels,” Moody’s said. “However, the speed of the drop will vary considerably across provinces. All regions will experience price declines, but the Prairie provinces will register the most sizable peak-to-trough decline.”

Nationally, the average decline will be a little over 7% next year. Calgary and Edmonton will see the largest drops at roughly 10% each, with oil continuing to exhibit weakness on a global stage. Regina will have a 9% downturn, while Toronto will reach nearly the same decline. Vancouver prices are projected to decline by less than 7%.

“High unemployment and lower income will restrain buyers’ return to the market,” according to report author Abhilasha Singh. “So will affordability issues in Vancouver and Toronto. Further, slower in-migration flows to Canada due to COVID-19 disruptions will weigh on housing demand. Not even lower interest rates will be enough to save the housing market.”

Fortunately, all is not lost for the less-than-populous markets.

“We expect greater resilience in lower-density markets outside Canada’s large urban cores,” Moody’s said. “The pandemic has boosted demand for properties offering more space for working from home and fewer shared areas with neighbours. Smaller markets where such properties are more affordable will particularly benefit from this trend.”


Copyright © 2020 Key Media

1.6 acres zoned for Single-family residential sells $1 million over ask

Surrey 1.6 acres zoned for houses sells $1 million over ask

Varing Marketing Group / Abbotsford
Western Investor

The South Surrey infill site, zoned for single-family residential development, sold for $6.5 million.


Property type: Residential Land

Location: 15624 24 Avenue, Surrey

Land size: 69,696 square feet

Land size in acres: 1.6 acres

Zoning: Single-family residential

List price: $5.5 million

Sale price: $6.5 million

Brokerage: Varing Marketing Group, Abbotsford

Broker: Joe Varing


© Copyright 2020 Western Investor

Marriott suffered the worst market decline in 2020

Marriott market cap plunged 31 per cent this year

WI Staff
Western Investor

Major Western Canada hotel developer has suffered the worst decline in market capital among world’s largest hotel chains during coronavirus crisis.

Marriot Hotels, which has been on a branding and building blitz in Western Canada over the past two years, has suffered the worst market capitalization decline among the world’s five largest hotel chains in 2020.

With approximately 6,000 properties worldwide, Marriott Hotels is the world’s third-largest hotel company and one of the biggest in Canada. The chain comprises 29 brands ­­– including Delta, Fairfield and Sheraton – ranging from mid-level budget locations to high-end luxury resorts.

Since 2018 Marriot has opened more than a dozen hotels in Western Canada.

These include two luxury hotels in Vancouver at the Parq casino complex; the Civic Hotel in Surrey, B.C.; the Residence Inn in Calgary’s Beltline and the Westin at the Calgary Airport; the 346-room JW Marriott in Edmonton’s ICE District and the Fairfield by Marriott at the Edmonton International Airport; and hotels in Saskatoon and Winnipeg as well as in smaller cities, such as Fort McMurrray, Alberta, and Kelowna and Kamloops in B.C.

This January, Marriott broke ground on a 172-room hotel next to the Vancouver Island Conference Centre in Nanaimo, B.C.

At the pre-pandemic start of 2020, the combined value of stocks of the Washington, D.C.-based corporation stood at $49.51 billion (all figures in U.S. dollars). By the end of the second quarter, this had been cut in half to $24.25 billion, according to data analysis from StockApp, provided by Britain-based media firm Finixio Ltd.

“Although the company’s market cap recovered to $33.86 billion in September, this figure still represents a 31 per cent plunge since the beginning of 2020,” StockApp reported.

Marriott is not alone in suffering capital losses since the start of the pandemic, which has hit the global hotel industry perhaps harder than any other real estate sector, due to travel restrictions and conference cancellations.

According to data presented by StockApps, the combined market capitalization of the five largest hotel chains in the world – Wyndham Hotels and Resorts, Choice Hotels International, Marriott International, Intercontinental Hotels Group, and Hilton Worldwide Holdings – plunged by $25.2 billion since the beginning of 2020, to a combined $79.2 billion market cap as of September.

The market cap of Wyndham Worldwide, the biggest hotel chain in the world with 8,092 properties, stood at $5.89 billion at the start of the year. By the end of March, this figure dropped to $2.93 billion. Although the second and third quarter of 2020 brought a recovery, the combined value of stocks of the U.S. corporation stood at just over $5 billion in September, an $870 million plunge since the beginning of the year.

The second-largest hotel chain globally, Choice Hotels International, lost $440 million in market capitalization amid the coronavirus crisis.

London, U.K-based Intercontinental Hotels Group, the fourth largest hotel chain globally with 5,070 hotels across nearly 100 countries, has shed 21 per cent of its market cap in the past nine months.

The total value of Hilton Worldwide Holdings stocks, the fifth-largest chain of hotels globally, dropped by $5.66 billion since the beginning of 2020, representing an 18 per cent decline in market capitalzation, StockApps data revealed.


© Copyright 2020 Western Investor

Pandemic increases industrial properties interest

Soaring industrial land prices define a strong sector

Frank O?Brien
Western Investor

A 2.4-acre vacant industrial site in Port Coquitlam didn’t last long on the market this September when it was listed by Cushman & Wakefield at $9.9 million.

“Our purchaser actually saw the for-sale sign being installed, and immediately called us,” said Nick Goulet of Macdonald Commercial in Vancouver, the buyer agent with partner Stuart Wright.

Goulet said they originally thought the near-$10 million asking price was “way too high” but an independent appraisal proved accurate and the Kingsway Avenue site closed within days at $9.5 million, nearly $3 million above its BC Assessment value.

Goulet and Wright listed an 11,880-square-foot [0.27-acre) industrial site in North Vancouver just as the pandemic hit in March. It sold August 14 for $5.2 million, which was $1 million above the assessed value in a transaction that equated to an eye-popping price of about $20 million an acre for the West 14th parcel.

These suburban sales follow an industrial demand curve in Metro Vancouver that saw 44 deals in the first six months of this year selling for a total 644 million, surpassing the dollar volumes in the first half of 2019 ($392 million) and maintaining the acceleration in the back half of 2019, when 35 industrial packages closed at  $651 million, according to Avison Young data.

If strata industrial and other sales valued at less than $5 million are also counted, the industrial sales volume in the first half of this year pushes the total above $891 million, Avison Young noted.

If anything, Avison Young added, the pandemic increased interest in industrial properties across the Vancouver region.

“Industrial assets, particularly those related to logistics,  distribution and last-mile warehousing, were already in high demand due to shoppers’ ongoing embrace of e-commerce, but the arrival of COVID-19 triggered an even more rapid shift in consumer shopping patterns, further driving demand for industrial assets,” the commercial agency noted in its mid-year 2020 B.C. Investment Review.

Demand for certain goods during the pandemic increased substantially, which boosted the fortunes of many manufacturers, the report noted. Some retailers found they required additional industrial space to support emerging online sales operations, and for storage after stores were closed during the province wide lockdown.

All of these factors occurred in an industrial market that has posted near record-low vacancy for more than four years.

As of the second quarter, Metro Vancouver’s industrial vacancy rate was less than 2 per cent for the 13th consecutive quarter, reports Colliers International. This is despite rapid development that saw 1.86 million square feet of new supply added, the second-largest amount of new industrial in any three-month period, behind only the second quarter of 2019 when more than two million square feet completed.

Avison Young noted, however, that overall industrial investments slowed compared to the first three months of this year as the pandemic evolved.

More than 669,000 square feet of industrial was shoved back onto the market as sublease space as of the second quarter – up from 453,000 square in the same period 2019 – which may give pause to developers who are aiming to pre-lease about 878,000 square feet of speculative industrial space currently under construction.

This year, the biggest build was the custom-built, 530,563-square-foot distribution centre for Sobeys in Surrey’s Campbell Heights, one of the largest freestanding industrial buildings ever constructed in Metro Vancouver.

The largest industrial sale in the first half of 2020 was the $146 million acquisition of a 19-acre parcel in Burnaby by Larco Investments Ltd., with a plan to build a new film studio. The next largest deals include the $51 million sale of a 13.8-arce riverside site in Burnaby that had been bought three years earlier for $33.8 million, according to Avison and Young; the 9.7-acre Viking Way Business Centre in Richmond that sold for $49.2 million; and warehouse strata sales at Series Business Centre in Richmond – where the space sold at around $375 per square foot – for $30.4 million.

The industrial data appears wildly positive considering B.C. is in the grip of a pandemic-induced recession, but there are some signs of caution.

While the vacancy rate remains at a very low 1.7 per cent and average lease rates are still at a relatively high average of $14.29 per square foot, most of the current absorption is based on new industrial space that was pre-leased long before COVID-19 arrived, according to real estate tenant advisor Cresa.

In its second quarter report on the Metro Vancouver market, Cresa also highlighted the uptick in industrial sublease space as a trend to watch.

“Leasing markets act with a lag, and [Metro]Vancouver’s industrial market is no different. Third quarter data will be far more instructive,” Cresa stated.


© Copyright 2020 Western Investor