The Vancouver Business Thread

[rofina]

Originally Posted by Sheba

I think this is the right section for this.



I wonder how many conferences will end up moving to Canada because of denied visas. Some people on here didn't think Trump's policies would make much of a difference.

I don't think its just Trumps policies, I think the US companies are starting to realise it may be prudent to hedge their bets by setting up significant infrastructure just north of border.

Allows for easy serviceability of their home market, similar or same time zone, and a lot more stable political climate.

I think most people (I hope most people) realise that the issues plaguing the US don't end by getting rid of Trump.

His election has opened Pandoras box - I think the "blow it up" vote is going to be a lot more vocal going forward, on both the left and right in the US.

Bernie Sanders is proof of that on the left. The intersectionality between Sanders vote and Trump voter is surprisingly large.

Having these two receive as much votes as they did proves that polarising times are only in their infancy.

Imagine what happens if the Left wins the next election with a Bernie type candidate?

[SpongeG]

Food companies gobbling up industrial space

Sector’s growth whets appetite for dwindling land supply

By Peter Mitham | May 28, 2018


Stefan Morissette, a vice-president specializing in industrial real estate at Colliers International, at the new Daiya Foods location in Burnaby. The company’s deal for the 396,770 square feet at the former Brick warehouse cut industrial vacancies in the Lower Mainland by 10% | Chung Chow

While industrial developers eagerly eye farmland for new opportunities, food processors and distributors have spent the past year cutting some of the biggest deals for industrial space.

CBRE Ltd. reports that 31.3% of Metro Vancouver’s top 10 lease transactions last year were to food and beverage companies, including the BC Liquor Distribution Branch, Loblaw Cos. Ltd. (TSX:L) and Golden Boy Foods Ltd.

“We continue to see strong demand with over one million square feet of current tenants in the market that are food and beverage-related,” said Chris MacCauley, a senior vice-president and veteran industrial broker with CBRE.

...

https://biv.com/article/2018/05/food-companies-gobbling-industrial-real-estate-vancouver-area

[osirisboy]

Driving through Campbell heights area often I can say there is a ton of space just waiting to be developed. They have all the streets/utilities and everything built. Which such a tight vacancy rate I would've thought there would be more development occuring.

The other thing that I always find weird is why all industrial areas build it as if it were a residential area. Meaning they build huge grassy lawns and large set backs with a crazy amount of landscaping. Why?! I look at some of these new builds and think they could increase the sqft by 50% if they got rid of all that stuff.

[Sheba]

Originally Posted by osirisboy

The other thing that I always find weird is why all industrial areas build it as if it were a residential area. Meaning they build huge grassy lawns and large set backs with a crazy amount of landscaping. Why?! I look at some of these new builds and think they could increase the sqft by 50% if they got rid of all that stuff.

It's probably part of the deal they have to make to build and it's likely tied in with environmental issues (concrete being a big heat sink). I suspect locally most newer industrial areas are being built like that.

[SpongeG]

Vancouver's growing VR/AR tech reputation draws interest from South Korea

By Chuck Chiang | May 29, 2018

Vancouver’s growing reputation as a hub for virtual reality (VR) and augmented reality (AR) technology development is now drawing international interest, with a delegation of South Korean firms visiting the city to explore the possibilities for a deeper partnership.

The delegation from the Korean province of Gyeonggi, which is gaining a reputation as a Silicon-Valley-like hub in East Asia, began the two-day visit today (May 29) with the aim of finding partners in co-developing VR/AR platforms or distributing Korean-made products and services in the North American market.

The visit comes after B.C. Premier John Horgan visited South Korea in January and signed a three-year trade plan with a focus on the digital media sector. It was during that same visit that DigiBC, the local industry association, entered into a collaborative agreement with the Gyeonggi Content Agency (GCA), a government body that organized the delegation.

DigiBC executive director Brenda Bailey said she was pleasantly surprised at how quickly the visit came after the initial trade outreach in January.

“Often, when provincial trade delegations to a foreign market happen, there would be memorandums of understanding, but it takes some time for there to be action,” Bailey said. “So for us to have in May, after signing in January, already an esteemed delegation here in B.C. is very exciting, and it speaks well to how each country sees the opportunity on VR/AR and is moving very quickly on this interest.”

In addition to showcasing technologies from the seven Korean companies in the delegation in hopes of gaining distribution deals, Gyeonggi province’s delegation is also pushing its Next Reality Partners (NRP) AR/VR startup incubator program, which is seeking international firms that may be looking at developing their products in Korea.

Lee Sangwon, manager at GCA and the Korean delegation leader, said Canada is one of only three markets - the other two being Great Britain and Dubai - that the NRP program has identified in its first step to attract AR/VR development talent to Korea.

“When we approached the Korean companies on getting into business with Canada, most of the companies in Gyeonggi province mentioned Vancouver because of the reputation in VR/AR development,” Lee said. “So the urge to work with Vancouver is not coming from the Korean government, but rather the companies themselves who want this market.”

In a presentation to the Korean delegation, characterized as a “meet-and-greet” first step to more extensive interactions in the next three years, Microsoft Vancouver director Edoardo De Martin said his company chose Vancouver largely because of the large talent base for 3-D developers here in B.C., as well as its growing ecosystem for tech startups that’s now rivaling others along the North American West Coast. But De Martin also added that the city’s diversity is a strength that’s often overlooked.

“We don’t make software for just Canada or North America, but the entire world,” he said. “When we come here to Vancouver, the workforce reflects the world.”

...

https://biv.com/article/2018/05/vancouvers-growing-vrar-tech-reputation-draws-interest-south-korea

[whatnext]

Looks like Vancouver is being fairly aggressive tackling short term rentals under the new bylaws:

Vancouver’s new short-term rental regulations went into effect more than a month ago and the city is currently investigating more than 1,500 listings in the city.

“These include commercial operations and illegal/unsafe units that will not qualify under the new licensing program, in order to protect the safety and availability of Vancouver’s long-term rental stock,” the city said in a statement released Thursday.

Of those 1,500 listings under investigation:

-Nearly 400 short-term rental listings have either been converted to long-term rental units or delisted from home sharing websites, like Airbnb.
-Prosecution has been initiated against commercial operators representing 89 listings, with the potential to collect fines of up to $890,000.
-Over 400 listings have been targeted for enforcement, with multiple actions taken including warning letters, safety violation inspections, prosecutions and fines.
-Over 100 listings with duplicate or incorrect business licences are under audit and subject to additional enforcement.

Since April 19, the city has received more than 430 complaints from residents about suspected illegal short-term rentals. Each complaint in reviewed by the short-term rental enforcement team....

http://www.vancourier.com/real-estate/mo...irst-month-of-new-regulations-1.23320760

[SpongeG]

PayPal buying Vancouver-founded Hyperwallet for US$400m

The latest deal is the second high-profile acquisition of a B.C. company PayPal has made since last year

By Tyler Orton | June 21, 2018

A financial technology company that traces its roots to Vancouver has found a buyer willing to dig deep into its own wallet.

PayPal Holdings, Inc. (NASDAQ: PYPL) is acquiring Hyperwallet Systems Inc. for US$400 million.

Hyperwallet’s platform specializes in helping businesses manage payments to freelancers and contractors.

The company was founded in Vancouver, where it maintains two offices.

Since its launch in 2000 the fintech has moved more of its presence to the U.S.

Most of its executive team, including CEO Brent Warrington, is based in Austin, Texas.

...

https://biv.com/article/2018/06/paypal-buying-vancouver-founded-hyperwallet-us400m

[rofina]

Originally Posted by SpongeG

PayPal buying Vancouver-founded Hyperwallet for US$400m

The latest deal is the second high-profile acquisition of a B.C. company PayPal has made since last year

By Tyler Orton | June 21, 2018

A financial technology company that traces its roots to Vancouver has found a buyer willing to dig deep into its own wallet.

PayPal Holdings, Inc. (NASDAQ: PYPL) is acquiring Hyperwallet Systems Inc. for US$400 million.

Hyperwallet’s platform specializes in helping businesses manage payments to freelancers and contractors.

The company was founded in Vancouver, where it maintains two offices.

Since its launch in 2000 the fintech has moved more of its presence to the U.S.

Most of its executive team, including CEO Brent Warrington, is based in Austin, Texas.

...

https://biv.com/article/2018/06/paypal-buying-vancouver-founded-hyperwallet-us400m

This is great, the only shame about these businesses is that they largely dont stick around Van, much like this one.

It does seem like this is changing now though, which should hopefully help drive more local wealth.

This is desperately needed to help combat the absurd cost of living in this region.

[whatnext]

I called this a while ago, now the media is on it: Vancouver's mania for selling condos to offshore buyers is threatening the tourism industry:

Lucrative condo towers putting 1,700 hotel rooms at-risk in Downtown Vancouver

Years of constructing residential buildings has created a shortage of hotel rooms that Tourism Vancouver warns could put jobs and the industry at risk.

Vancouver city council approved new recommendations to permit three plots of land in Downtown along Smithe Street and Davie Street to be redeveloped to include hotels.
According to a city council report, the number of hotel rooms in the city declined by 1,100 in the past decade. Another 1,700 rooms are “at risk” of redevelopment primarily to residential. It stated that tourism, business travel and conferences contributes about $4.8 billion to the Metro Vancouver economy in 2017 and supports over 70,000 full-time jobs.

Tourism Vancouver is “projecting the city will lose our competitive edge when competing for conferences due to challenges securing hotel room blocks at a price comparable to other major centres.”...

https://www.thestar.com/vancouver/2018/0...rooms-at-risk-in-downtown-vancouver.html

[jollyburger]

They've only lost 200 rooms downtown in a decade.

[Changing City]

Originally Posted by jollyburger

They've only lost 200 rooms downtown in a decade.

And there are over 500 rooms being added or proposed Downtown, including the Exchange, Edward Chapman next door, the Catholic Charities on Robson and the YWCA addition on Beatty.

That news story that whatnext quoted is a rehash of a report going to City Council intended to protect existing hotels in residential areas, and examine how to see more new hotels developed. So the planners are aware of a potential problem, especially now the City are getting on top of the Airb&b problem, and are pro-actively proposing policy and zoning changes.

[misher]

Originally Posted by whatnext

I called this a while ago, now the media is on it: Vancouver's mania for selling condos to offshore buyers is threatening the tourism industry:
[/I]

https://www.thestar.com/vancouver/2018/0...rooms-at-risk-in-downtown-vancouver.html

I wouldn't say offshore buyers purchasing condos threatens it....10% or less of condos belong to offshore buyers. But definitely the high price of condos means strata residential is worth much more to build. Also you need to remember that the city heavily taxes per a sqft so it makes much more sense to add it into the sales price rather than try to build office or a hotel and raise rents/fees.

I do think the empty homes tax kills tourism as people don't get vacation places anymore (we have so many small towns that rely on the cabin industry). I suggest the best policy to increase commercial and hotel space is to reduce the taxes and fees that the government charges to build them.

[Klazu]

Not sure what the truth with all the different numbers is, but I have to say that we have been doing very poorly if we have at best only been adding a few hundred hotel rooms in a decade. In that same time time frame most major cities around the world have added thousands of rooms, so yeah, our tourism numbers is definitely capped by these changes.

And what makes it even worse is that most of the recently added rooms are high-end pricing, which doesn't cater to your normal tourism that 90% of the industry is. We are fast becoming a high-end resort city and that won't support most of the business in this city. Having the globally best-selling luxury retail won't make for a lively city.

And to the empty homes tax... I hope they raise it to 5% and ban all vacation rentals such as AirBnB. Some people don't realize how desperate the rental market is being with almost full occupancy and only places on the markets rent for thousands of dollars due to being also on vacation rental sites for high daily rates. It's completely bonkers.

[whatnext]

Originally Posted by misher

I wouldn't say offshore buyers purchasing condos threatens it....10% or less of condos belong to offshore buyers. But definitely the high price of condos means strata residential is worth much more to build. Also you need to remember that the city heavily taxes per a sqft so it makes much more sense to add it into the sales price rather than try to build office or a hotel and raise rents/fees.

ORLY?

A new study released by Andy Yan of the SFU City Program on Wednesday finds that non-residents own at least one in 10 condos in every category of unit worth $600,000 or more.

..When you look at housing type, for example, you find that non-residents, or people whose principal residence is outside Canada, own 19 per cent of condos that were built in the City of Vancouver from 2016 to 2017.

Yan largely found higher shares of non-resident ownership as units became more expensive – and the numbers varied by municipality.

Among Metro Vancouver condos worth $600,000 to $799,999, for example, non-residents owned 10 per cent. In the City of Vancouver, that figure was 12 per cent.

Meanwhile, non-residents owned 19 per cent of condos worth $1.5 million or more in the City of Vancouver, and 22 per cent of such units in Richmond and Coquitlam...
https://globalnews.ca/news/3955859/vancouver-condos-non-residents/

You're not making the connection that those percentages are more than enough to move the market (and don't include Canadians or Permanent residents who are getting their money from foreign sources). Therefore not only are the condo prices for all other buyers driven up, but that spillover in land values is making it uneconomic for other uses to compete with condos (ie. hotels, industrial, retail).

[jollyburger]

Just give all the land back to the First Nations.

[misher]

Originally Posted by Klazu

Not sure what the truth with all the different numbers is, but I have to say that we have been doing very poorly if we have at best only been adding a few hundred hotel rooms in a decade. In that same time time frame most major cities around the world have added thousands of rooms, so yeah, our tourism numbers is definitely capped by these changes.

And what makes it even worse is that most of the recently added rooms are high-end pricing, which doesn't cater to your normal tourism that 90% of the industry is. We are fast becoming a high-end resort city and that won't support most of the business in this city. Having the globally best-selling luxury retail won't make for a lively city.

And to the empty homes tax... I hope they raise it to 5% and ban all vacation rentals such as AirBnB. Some people don't realize how desperate the rental market is being with almost full occupancy and only places on the markets rent for thousands of dollars due to being also on vacation rental sites for high daily rates. It's completely bonkers.

I do agree with some of your points but I think the empty home tax is bonkers in that it was applied to 95% of BC. We have some housing difficulties in Vancouver but why punish vacation property Owners in every resort town, lakeside retreat, etc. across BC? Does it sound like an intelligent move to dissuade people from buying vacation property in Whistler and Harrison Hot Springs?

[misher]

Originally Posted by whatnext

ORLY?

A new study released by Andy Yan of the SFU City Program on Wednesday finds that non-residents own at least one in 10 condos in every category of unit worth $600,000 or more.

..When you look at housing type, for example, you find that non-residents, or people whose principal residence is outside Canada, own 19 per cent of condos that were built in the City of Vancouver from 2016 to 2017.

Yan largely found higher shares of non-resident ownership as units became more expensive – and the numbers varied by municipality.

Among Metro Vancouver condos worth $600,000 to $799,999, for example, non-residents owned 10 per cent. In the City of Vancouver, that figure was 12 per cent.

Meanwhile, non-residents owned 19 per cent of condos worth $1.5 million or more in the City of Vancouver, and 22 per cent of such units in Richmond and Coquitlam...
https://globalnews.ca/news/3955859/vancouver-condos-non-residents/

You're not making the connection that those percentages are more than enough to move the market (and don't include Canadians or Permanent residents who are getting their money from foreign sources). Therefore not only are the condo prices for all other buyers driven up, but that spillover in land values is making it uneconomic for other uses to compete with condos (ie. hotels, industrial, retail).

Hmm I can see that prices of "Luxury properties" will go down if we get rid of foreign buyers. I don't see why we need to reduce the price of luxury condos/real estate. After all these properties pay a large chunk of our taxes? I also don't necessarily see a strong real estate market as a bad thing? Taxes were plentiful and investment properties were being built and sold like crazy (meaning there were lots of rentals). A tax on foreign buyers makes sense but 15-20% makes it so no one will buy here while a 5% tax would have been reasonable. Were a capitalist nation so adding a small tax to give us a competitive edge is reasonable, but 15-20% is pure punishment. Plus it was evil to levy that tax on people who had put a deposit down on new construction but had yet to complete the sale. I believe in being fair and nice, and by doing that we showed that we are assholes. There should have been a grace period and warning, instead these measures like empty homes and speculation taxes are given with little to no warning in an attempt to immediately punish people.

If you look at statistics most major international cities have many foreign buyers. London its 13%+. Its just normal to have that in a major city. Vancouver is literally Canada's Western capital. If you look at BC as a whole the amount of foreign ownership goes down greatly. Foreigners have really helped boost this city such that our unemployment is at an all time low. The reason UBC and other schools are so rich now is definitely because of that (PS I do not support how many international students UBC is taking over locals).

In the end lets be honest, I'm going to say something thats going to get me in trouble. Most homeless and drug addicts are Canadians while the people paying the taxes to care for them are foreigners.

[CanSpice]

Originally Posted by misher

I do agree with some of your points but I think the empty home tax is bonkers in that it was applied to 95% of BC. We have some housing difficulties in Vancouver but why punish vacation property Owners in every resort town, lakeside retreat, etc. across BC? Does it sound like an intelligent move to dissuade people from buying vacation property in Whistler and Harrison Hot Springs?

You're talking about the speculation tax, which doesn't affect properties in Whistler or Harrison Hot Springs, or in "every resort town, lakeside retreat, etc. across BC". This page has a map showing where the speculation tax will be in effect.

[rofina]

Originally Posted by misher

Hmm I can see that prices of "Luxury properties" will go down if we get rid of foreign buyers. I don't see why we need to reduce the price of luxury condos/real estate. After all these properties pay a large chunk of our taxes? I also don't necessarily see a strong real estate market as a bad thing? Taxes were plentiful and investment properties were being built and sold like crazy (meaning there were lots of rentals). A tax on foreign buyers makes sense but 15-20% makes it so no one will buy here while a 5% tax would have been reasonable. Were a capitalist nation so adding a small tax to give us a competitive edge is reasonable, but 15-20% is pure punishment. Plus it was evil to levy that tax on people who had put a deposit down on new construction but had yet to complete the sale. I believe in being fair and nice, and by doing that we showed that we are assholes. There should have been a grace period and warning, instead these measures like empty homes and speculation taxes are given with little to no warning in an attempt to immediately punish people.

If you look at statistics most major international cities have many foreign buyers. London its 13%+. Its just normal to have that in a major city. Vancouver is literally Canada's Western capital. If you look at BC as a whole the amount of foreign ownership goes down greatly. Foreigners have really helped boost this city such that our unemployment is at an all time low. The reason UBC and other schools are so rich now is definitely because of that (PS I do not support how many international students UBC is taking over locals).

In the end lets be honest, I'm going to say something thats going to get me in trouble. Most homeless and drug addicts are Canadians while the people paying the taxes to care for them are foreigners.

The answer to all your musings is balance.

Sure - were capitalist. But when a household making well into the 6 figures is forced into 500 sq/ft one bedrooms because of prices, it starts to damage the fabric of society and more importantly pushes people out of the region.

We do a great job attracting people and educating them. But a poor job retaining the talent.

The prices for houses and condos today are simply a net negative to the City and region.
- Business are having problems attracting and retaining talent.
- Commute times are going off the charts
- Commute directions are scattered as town centres sprout up across region
- First responders are forced to live away
- Even the construction industry is starving itself - we cant attract labour to build our fancy condos because they cant afford to live here.

This may have been a boon to the economy 10 years ago. Its a net negative now.

We have tourism, we have film, we have tech, we have resource, if there is a time to get off Real Estate its now.

[misher]

Originally Posted by CanSpice

You're talking about the speculation tax, which doesn't affect properties in Whistler or Harrison Hot Springs, or in "every resort town, lakeside retreat, etc. across BC". This page has a map showing where the speculation tax will be in effect.

Ahh thanks for correcting me. I will point out that it originally did affect these cities!! Which shows you the intelligence of our policy makers! Glad they saw reason.