Downtown Vancouver Updates

[jlousa]

As per BIV looks like Lululemon has backed out of the 80K sqft of office space at Crossroads, and according to Barclays as of Oct/08 there is now 600K sqft of sublease office space available, and the recession hasn't even started. Someone was saying we needed more office towers?

[Metro-One]

Yes we do, because we need to attract more business to the city and stop the business park sprawl.

[djh]

Originally Posted by jlousa

As per BIV looks like Lululemon has backed out of the 80K sqft of office space at Crossroads, and according to Barclays as of Oct/08 there is now 600K sqft of sublease office space available, and the recession hasn't even started. Someone was saying we needed more office towers?

Yes I can confirm that they've pulled out, from a friend who works at the head office with the CEO. Apparently is was going to cost them $5m, and they thought they could spend that money better (I guess forseeing tough times ahead). But their current head office in East Van is none too comfortable - people share desks - so I'm sure they will be looking to lease cheaper space somewhere else.

[vanlaw]

Originally Posted by Metro-One

Yes we do, because we need to attract more business to the city and stop the business park sprawl.

But commuting downtown from the 'burbs isn’t exactly appealing to many. Regional business parks serve a purpose and serve the various population hubs. If I lived out in Langley or Surrey, and I had a choice of two jobs - one downtown and one in Port Kells, that came with relatively the same pay, I would take the job closer to home. In fact, even if the job closer to home came with slightly less pay, it would probably still work out to be better once you factor in your time cost of commuting etc.

There is a huge population base south of the Fraser River – is it really realistic to expect these people to willingly commute downtown?

[Metro-One]

Well that is why people who have office jobs that work downtown tend to move to more transit friendly areas, such as those relatively around train stations, even many business men in Maple Ridge who work downtown take the West Coast Express. It is good to have a strong centralized business core, and if south of the Fraser is bursting at the seems, well maybe instead of building sprawling business parks a central business tower area should be established. This could and should be done in Central Surrey. Look at almost any major city in the world and the heart of finance and business will be in the core Light and Heavy industry is usually performed in the burbs, since they actually require space

also i should add, there is nothing wrong with suburb communities wanting office space, but office space should all be built as towers in the suburban cores, and reserve the land for parks, farming and industry.

[SpongeG]

Originally Posted by hollywoodnorth

what ended up doing into the new retail units on the LEFT side of your picture? anyone know? seems like one is occupied....

one is occupied - its a Rogers

the other spot or spots is going to be a CIBC bank

[SpongeG]

Originally Posted by Metro-One

Well that is why people who have office jobs that work downtown tend to move to more transit friendly areas, such as those relatively around train stations, even many business men in Maple Ridge who work downtown take the West Coast Express. It is good to have a strong centralized business core, and if south of the Fraser is bursting at the seems, well maybe instead of building sprawling business parks a central business tower area should be established. This could and should be done in Central Surrey. Look at almost any major city in the world and the heart of finance and business will be in the core Light and Heavy industry is usually performed in the burbs, since they actually require space

also i should add, there is nothing wrong with suburb communities wanting office space, but office space should all be built as towers in the suburban cores, and reserve the land for parks, farming and industry.

have you looked at real estate prices in the last decade?

not all businesses themselves want to be in office towers either

As well most vancouver business is blue collar not white collar

[vanlaw]

Originally Posted by Metro-One

Well that is why people who have office jobs that work downtown tend to move to more transit friendly areas, such as those relatively around train stations, even many business men in Maple Ridge who work downtown take the West Coast Express. It is good to have a strong centralized business core, and if south of the Fraser is bursting at the seems, well maybe instead of building sprawling business parks a central business tower area should be established. This could and should be done in Central Surrey. Look at almost any major city in the world and the heart of finance and business will be in the core Light and Heavy industry is usually performed in the burbs, since they actually require space

also i should add, there is nothing wrong with suburb communities wanting office space, but office space should all be built as towers in the suburban cores, and reserve the land for parks, farming and industry.

Oh I definitely agree with you re: style of non-downtown core office space. I also think a strong downtown is vital to the region. However, as much discussions as it gets on this forum, thinking that public transit will eventually get to the level where people can move efficiently and cheaply from one area of the region to another is a bit of a pipe dream - even if we finish all projects that are in the planning stages right now by 2020, we are simply playing a constant game of catch up. Therefore, people will generally choose to work closer to home.

[jozero]

how does this seem like a bad investment to a BIG BANK? I'm confused.................

- 180 Million Project Cost
- 300 million in total sales and had put down secured deposits of 15 to 25 per cent.
- 105 of the 144 upscale suites sold.....so STILL MORE UNITES TO BE SOLD...........more income to come in......

so WTF? 1 + 1 = 2 no?

Hello. Long time listener, first time caller.

> how does this seem like a bad investment to a BIG BANK?

Welcome to the wonderful world of presales. Ever been to a presale on opening night and it seems like a good chunk of the building is already sold? These are sold to 'insiders', usually blocks of units - friends of those making the building. Bought purely for investment purposes.

Well now the units can't be easily flipped, or will obviously be 'under water' by the time they are done. Now the insiders, possibly making up 25 to 50 percent of the 'buyers' want out. These are the builders friend's, well heeled individuals that can cause all sorts of headaches or are supporting the builders other ventures.

'Secured', 'Sold' ? These have no meaning when the rich run scared.

I should also add the bank may have a direct reason not to finance the project. Say the unit sells for $1 million, presale buyer put down 20% so 200K.

Economy starts to spiral downwards, bank predicts by the time the building is finished prices will drop 25% (not unlikely at all, prices have fallen far further in the US). Well now the presale buyer is requesting a 800K mortgage on property worth 750K. No bank would finance this. Multiple this by an entire building ....

[jlousa]

Went to the Metro Core Job Study meeting tonight, pretty quite there, guess most of the skyscraper lovers were out looking at buildings.

Anyways nothing really knew that I have posted. Here are a copy of the boards from the open house, only change was the dates on the last board.

http://vancouver.ca/commsvcs/planning/corejobs/pdf/research/step4openhousepanels.pdf

And here was a copy of the information provided. There was also the chance to tell them what you thought and to ask questions.

http://vancouver.ca/commsvcs/planning/corejobs/pdf/research/newsletter4.pdf

[jlousa]

Also attended the liquor licensing review, it appears the recommendation going to city council is to adjust the hours that FP (food primary) are allowed to serve liquor to 1am straight across the city, those with longer hours will be grandfathered in everyone else has the option of staying open until 1am regardless of location. I would've preferred to see it extended until 2am but feel 1am isn't to bad as there is a 30min grace period involved. The recommendation will go to council in Jan and should be in effect by Nov/09.

The meeting was pretty entertaining watching residents and restaurant owners go back and forth both with good and stupid arguments. Felt bad for the presenter as she was pretty weak to begin with.

[jozero]

duplicate post.

[Mininari]

Originally Posted by jozero

duplicate post.

Aside from other factors, I would bet you've hit it dead on -- this is likely the biggest reason that a bank would pull out of something that has so many presales...

[rather_draconian]

Thanks for the links. Council is really heading in the right direction with this policy plan. When will the vote be?

Originally Posted by jlousa

Went to the Metro Core Job Study meeting tonight, pretty quite there, guess most of the skyscraper lovers were out looking at buildings.

Anyways nothing really knew that I have posted. Here are a copy of the boards from the open house, only change was the dates on the last board.

http://vancouver.ca/commsvcs/planning/corejobs/pdf/research/step4openhousepanels.pdf

And here was a copy of the information provided. There was also the chance to tell them what you thought and to ask questions.

http://vancouver.ca/commsvcs/planning/corejobs/pdf/research/newsletter4.pdf

[thefly]

Originally Posted by jozero

Hello. Long time listener, first time caller.

> how does this seem like a bad investment to a BIG BANK?

Welcome to the wonderful world of presales. Ever been to a presale on opening night and it seems like a good chunk of the building is already sold? These are sold to 'insiders', usually blocks of units - friends of those making the building. Bought purely for investment purposes.

Well now the units can't be easily flipped, or will obviously be 'under water' by the time they are done. Now the insiders, possibly making up 25 to 50 percent of the 'buyers' want out. These are the builders friend's, well heeled individuals that can cause all sorts of headaches or are supporting the builders other ventures.

'Secured', 'Sold' ? These have no meaning when the rich run scared.

I should also add the bank may have a direct reason not to finance the project. Say the unit sells for $1 million, presale buyer put down 20% so 200K.

Economy starts to spiral downwards, bank predicts by the time the building is finished prices will drop 25% (not unlikely at all, prices have fallen far further in the US). Well now the presale buyer is requesting a 800K mortgage on property worth 750K. No bank would finance this. Multiple this by an entire building ....

I can tell you that from a lender perspective, any non-arms length sales do not count as a pre-sale when determining to finance. For example, say that in order to get financing they must have at least 60 pre-sales. Each of these contracts is reviewed and if any of them are to "insiders" then these don't count towards the 60.

In any of the developments that I have reviewed (big players) there is usually one a couple of units that may be sold to related parties.

[jlousa]

I can vouch for what thefly just posted. Inside sales are treated very differently and do not count as regular sales.
Financiers also have stats that show how many pre-sales they expect to complete and fall thru all of those factors are taken into account from the very start.


Anyways onto the Granville St redesign.

UPDATE
Starting December 1st, 2008 there will be full block closures on Granville St. The first block shutdown will be the 1200 block from Drake St to Davie St and will take approximately 4-5 weeks weather depending and then construction will move onto the next block. Access to pedestrians will be available during construction and stores will be open for business.

[jozero]

> I can vouch for what thefly just posted. Inside sales are treated very differently and do not count as regular sales.

I muddled my reply a bit, but was replying to the original poster that used the 'sold' numbers stated as the financial justification for the bank to finance. So while the bank may know the true number of units sold, the public isn't given this information. It just looks like the building is mostly sold, this builds hype and confidence to any real buyers. Its a sneaky marketing trick.

However this is getting off topic, and I'll like to start here by adding real real estate news when I get it.

[wrenegade]

The changes proposed in the Metro Core Jobs study are very encouraging. Absolutely love to see that happen, with a relaxation for building heights in a couple areas (Canada Post building being at the top of that list). Also sucks to hear about Lululemon bailing on the Crossroads space, doesn't exactly bode too well for the other couple office infill projects across the street with 80k of space back on the market.

[sacrifice333]

Well since we seem to be getting a lot of information on buildings being stopped or canceled here's a small building that's reaching completion within the next few months.

Intracorp's Camera on Pine & 8th Ave. Scheduled completion Jan/Feb 2009.

Recent pics from Intracorp's Construction Update Page:

[officedweller]

WRT Granville renovation - almost all of the trees on the Commodore side of Granville are gone. At the public open houses, the City staff said the replacement trees "won't be saplings - the trunks will have 3 inch diameters". Ugh.

Trees along Granville Street have been cut down as city prepares for neighbourhood upgrade.
Mark Van Manen, Vancouver Sun

Treeless Christmas comes to Granville
Upgrade of neighbourhood starts with removal of urban forest

Darah Hansen, Vancouver Sun
Published: Wednesday, November 26, 2008

VANCOUVER - There will be no Christmas lights twinkling in the trees along downtown Granville Street this year.

That's because there are no trees.

As of Tuesday, only stumps remained of the section of urban forest that stretched from Smithe Street down to the Granville Street Bridge.

In total, 120 mainly ornamental cherry trees were cut down last week as the City of Vancouver began preparation work on a $21-million neighbourhood upgrade.

The shopping and nightclub district is set to receive a major facelift beginning Dec. 1. The plan calls for wider sidewalks, dedicated bus lanes, new and more extensive street lighting, and additional green space, including planting 160 beech trees to replace the trees that were removed.

"It's going to be a great project. It's quite a marked improvement over what is there now," said Donny Wong, who is with the city's transportation division.

So far, some area merchants aren't so sure.

Marla DeGreve and Mitch Francis, managers of the Underworld skate shop at 860 Granville St., said they were shocked to arrive at work Monday to find the trees outside their business gone.

"It [the street] looks so lonely. It looks so ugly," DeGreve said, looking out at the barren sidewalk.

"British Columbia is supposed to be known for its trees," added Francis.

Out on the street, Daniel Jolicoeur took a break from his work with Westcoast Sign Services to give thumbs down to the tree-removal project.

"I think it's sad," Jolicoeur said. "There's no room for nature in civilization, unfortunately."

Charles Gauthier, executive director of the Downtown Vancouver Business Improvement Association, said business owners have known for months that many of the trees along the Granville strip were to be axed.

Gauthier said reaction to the tree removal was initially mixed, but association members ultimately deferred to the expertise of city arborists and landscape architects, who deemed many of the trees -- particularly those along the south end of the street -- to be in poor health.

Other trees were considered unsuitable to the urban environment, their large canopies blocking storefront signs and creating problems for passing buses.

"We understand that people have very close ties with the nature we have in our province and the city. That was pretty critical in our minds, but there was a number of challenges with retaining the trees that were there," Gauthier said.

The city has spared a handful of mature beech along the north end of the street.

According to Wong, the initial proposal called for the removal of all the trees along Granville, from the bridge to Water Street. That plan was later altered following public consultation.

The trees that will remain are more than 30 years old and stand approximately five storeys high, offering good shade for passersby and presenting few problems to traffic and businesses, Wong said.

He said the city considered transplanting the trees from the strip to locations elsewhere in the city, but scrapped the idea after being told they wouldn't survive the move.

The new trees are expected to be planted along Granville Street by September 2009, with all construction along the strip to be completed by November 2009.

Gauthier said stores will remain open for business during construction.

"It [the work] is not anywhere near the intensity or disruption that was caused on Cambie Street," he said.

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