Commercial real estate sales increase in Metro Vancouver

Commercial real estate in Metro Vancouver saw strong sales volume in the second quarter of 2019, according to the Real Estate Board of Greater Vancouver. Businesses and organizations purchased 52 commercial property units in…

Commercial real estate sales increase in Metro Vancouver

Commercial real estate in Metro Vancouver saw strong sales volume in the second quarter of 2019, according to the Real Estate Board of Greater Vancouver. Businesses and organizations purchased 52 commercial property units in the region, a total of $1.5 billion in value. This is the strongest quarterly total since Q2 2017.

Land value experienced the strongest quarter since the second quarter of 2014, an increase of 19 percent when compared to the second quarter of 2018. This increase shows a rebound in land prices.

“Strong growth is on the horizon for Metro Vancouver in 2019 and beyond,” said REBGV president Bob Rennie. “Buying multi-use, retail, industrial and office space now is as good a time as any to invest in a diverse local economy.”

“Conditions remain favorable for commercial property investment” as renters’ interest rates stay near historic lows, REBGV said in its report.

The commercial sale volume in Q2 was relatively unchanged from Q1, with a total of 58 sales at an average price of $624 per square foot. Bidding wars remain likely in Q3, Rennie said.

Several of Vancouver’s major downtown towers also completed second quarter acquisitions at above-market prices. Last month, Regus completed its acquisition of two downtown office buildings, located in the Commercial Drive and Vancouver Centre precincts. Regus is moving 500 employees into the two buildings. The transaction took place at a cost of more than $500 million.

Another downtown office tower, 21 Rideau Street, sold at $559 per square foot for Fung Wah. A boutique agency, Fung Wah specializes in boutique retail and entertainment properties. The seller was New West Investments, which will continue to hold a significant number of limited liability corporations using this property.

Also in downtown Vancouver, Bonney & Associates completed a retail sale at $564 per square foot for property called 7A Gold Eagle Avenue. This retail unit is close to the RBC Theatre, operated by the Royal Bank of Canada, and a Pan Am Games venue, called BMO Center, operated by the BMO Financial Group.

Land values also held steady in the second quarter. Average land values hit $505 per square foot in Q2, up 17 percent from Q1. As a result, land values are on track to continue gaining in the coming months, Rennie said.

Overall, Metro Vancouver commercial property sales were down slightly from Q1. In all three sectors – office, retail and industrial – Q2 sales have set records for the quarter. The one sector where commercial property sales dropped from Q1 was hotels, which saw sales activity drop 28 percent from Q1.

Regionwide total value of commercial sales increased by 11 percent from Q1. One of the largest recent sales in a hotel was the previously mentioned Vancouver Pan Am Sports Centre sale, at $160 million.

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