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January 9, 2014
Dramatic Change to Vancouver Skyline
The man in charge of Vancouver planning says approving a project that exceeds the city's height restrictions was a no-brainer.
Vancouver GM of planning and development Brian Jackson tells us there's a general height limit of 500 feet for the site of the $500M Burrard Gateway mixed-use project at Drake Street (along Burrard and Hornby), but the tallest of the three buildings will hit 550 feet. (However, it still doesn't meet the 659-foot Shangri-La Tower, the tallest building in the city.)
“This site was identified for greater height in order to provide a visual terminus in alignment with the Burrard Street Bridge,” Brian says. (That sounds so suave, we're adding "nice visual terminus" to our pick-up lines.) The city's general policy on building height restrictions identifies strategic locations for the development of higher buildings in the downtown, located on one of Vancouver's three primary streets of Georgia, Burrard, and Granville.
A JV of Jim Pattison Developments (40%) and Reliance Properties (60%) is behind the project—a 13-storey office building, a 55-storey condo tower, and a 35-storey tower, connected by a seven-storey podium for rental housing and retail uses, including a Jim Pattison Downtown Toyota Dealership and grocery store. Amenities will include park improvements, additional bike lanes, and a community centre for the neighborhood's LGBT community, which were all part of getting city re-zoning approval. Brian adds the project also meets the city's goals for Green Building Performance with LEED Gold while advancing the city's objective for carbon neutrality by achieving a 40% to 50% reduction in energy consumption (from 2010 levels).
Leisureworld Remains Steady
Leisureworld CFO Manny Di Filippo's departure shouldn't negatively impact strategic focus or day-to-day operations, according to analysts. Dundee's Yashwant Sankpal isn't surprised, given the fact that the company brought on Tim McSorley, "the former CFO of a reputed REIT," as a financial consultant a few months ago. LW is one of Canada's largest operators of seniors housing, with residences (like the Royale Peninsula project in Surrey, above) in Ontario and BC. The company has 7,500 employees and was trading this morning at $11.29. Tim McSorley was former CFO of Canadian Real Estate Investment Trust and is now serving as interim CFO. Analysts point to the company's low-risk business model, conservative balance sheet, and strong cashflow from its portfolio.
Decline in REIT Prices a Telltale Sign
FAM Real Estate Investment Trust CEO Shant Poladian describes the current REIT environment as a period when "Atlas shrugged." The scaling back of monetary stimulus will lead to a significant jump in interest rates over the next several years, he tells us—but Vancouver is a little more influenced by offshore money and supply constrained, so it's not as interest-rate sensitive. “Unless there is commensurate growth in rental rates, we are going to see property prices drop,” he says. “A lot of preconceived notions about asset values, cap rates, and institutional support are going to be put to the test.” The decline in REIT prices last year was a leading indicator of this trend. (The proverbial canary in the office building.)
Big Bucks Raised for UW
The employees at Avison Young are always fast with the cheque book when it comes to worthwhile causes, so this news is no surprise. AY employees donated over $14k to the United Way, part of their ongoing support for the organization. AY not only encourages employees to get involved in the community via donations like this, but also through activities like coachingamateursports or volunteer work.
Our Own Lil' Watergate
Thanks to the Washington Post for a nice write-up about our company. Our modest founder, Mark Bisnow, was worried the article focused too much on him, when our 75 employees deserve the credit. But on behalf of those employees, we just want to say don't worry: The only part we remember is that he was referred to as "peripatetic," a funny-sounding word whose definition we've pretended to know for years but still don't. Mark: Have a peripatetic day. Love, Your Employees.
A Bisnow Education Video!
We're often asked after our events, what's a cap rate, a 1031 exchange, a REIT, mezz debt, NOI, CMBS, loan-to-value, "core," etc. Well, we're the wrong people to ask, because we don't know either. BUT, we know someone who does! So we made a video. It's 90 minutes, broken into 19 different 5-minute segments on these different issues. Never be intimidated again! And dazzle the world with your use of highfalutin' acronyms.
Peter Linneman is really smart. He started the Wharton School's Real Estate Department, and he's been Chairman of Rockefeller Center Properties, and on the Executive Committee of Equity Office Properties. He's widely considered the top real estate professor in the United States. So try out the trailer above. And if you like it, for $59 you can stream it as much as you like. And you, too, can get really smart. More info and purchase.
The announcement of the Olympic hockey team got me thinking about grassroots sports, where the guys chosen got their start. Do you coach any sports? Send mark.keast@bisnow.com your pics and info, and we'll run some of our favorites in an upcoming issue.
