Office Market Discussion

[TheTerminalCity]

Originally Posted by officedweller

At the individual level.
Purchasers who buy for speculation will rent out.
That filled the rental market before developers got back into the rental market with government incentives.

Doesn't that just feed the larger problem? More people, including speculators, compete for a scare commodity (for sale housing), which drives up the price. Potential buyers may be shut out by speculators, so continue to rent instead with no other local options. The macro effect being that a developer has one more incentive to put up condos for sale than rental, if the ultimate impact is a ready market for higher sales per square foot to buyers. It also offloads the risk of owning a rental building onto the individual unit owners.

I know not everyone here may see it that way.

As a renter, I'd much rather have a purpose-built unit with some security built in than service the more expensive mortgage of an investor and the potential to be kicked out at any given time.

[EastVanMark]

Originally Posted by rofina

In any other North American market if vacancies were this low you would have plenty of towers being put up on spec. There is many reasons why this is not the case in Vancouver, none of them particularly good.

Well put.

[officedweller]

Originally Posted by TheTerminalCity

Doesn't that just feed the larger problem?...

I was just answering the question as to how they were related.

[misher]

Originally Posted by TheTerminalCity

Doesn't that just feed the larger problem? More people, including speculators, compete for a scare commodity (for sale housing), which drives up the price. Potential buyers may be shut out by speculators, so continue to rent instead with no other local options. The macro effect being that a developer has one more incentive to put up condos for sale than rental, if the ultimate impact is a ready market for higher sales per square foot to buyers. It also offloads the risk of owning a rental building onto the individual unit owners.

I know not everyone here may see it that way.

As a renter, I'd much rather have a purpose-built unit with some security built in than service the more expensive mortgage of an investor and the potential to be kicked out at any given time.

See the problem with a lot of people is that they pursue dreams over reality. Sure purpose built rental is nice but speculator held units represent most of our rental supply and will for the next few decades even if we just built purpose built rents only.

[TheTerminalCity]

Officedweller, I appreciate what you're saying. I was taking issue with Misher's post about speculators and how it was framed.

Originally Posted by misher

See the problem with a lot of people is that they pursue dreams over reality. Sure purpose built rental is nice but speculator held units represent most of our rental supply and will for the next few decades even if we just built purpose built rents only.

See the problem is making countless assertions without bothering to provide any supporting evidence. Speculator held units aren't listed in the City's 2019 Housing Vancouver update. If you want to assume that all secondary rental condos are speculator-owned, that's 22% of the rental units in the city proper. That's page 55.

[Changing City]

Originally Posted by misher

See the problem with a lot of people is that they pursue dreams over reality. Sure purpose built rental is nice but speculator held units represent most of our rental supply and will for the next few decades even if we just built purpose built rents only.

I'm confused. How many of these speculator held units are part of the Office Market?

[Kisai]

Originally Posted by Changing City

I'm confused. How many of these speculator held units are part of the Office Market?

Office and Retail speculation, look no further than that perpetually empty former-Best Buy location in Metrotown. You'd think someone would have occupied it by now, but I'm thinking whoever currently owns it just wants to sit on the property to flip it outside of the halloween and christmas popup store season. Then there is Concord Pacific wasting the entire Sears property, that they will no doubt sit on until the city tells them to they can't use it to market condos out of. Likewise with SHAPE sitting on that retail bigbox store location for City of Lougheed.

All this new build stuff south of Metrotown mall has been perpetually empty
https://www.spacelist.ca/listings/bc/burnaby#292295 , note "virtual office", you're basically renting an address, not space.

[officedweller]

That virtual office is like shared offices of the past, without the office.
I suppose it's another form of co-working space for those that won't actually use the space on a daily basis to perform work, although meeting rooms are available, which are useful.
... but you have to wonder about shared spaces in the age of COVID-19.

[misher]

Originally Posted by TheTerminalCity

Officedweller, I appreciate what you're saying. I was taking issue with Misher's post about speculators and how it was framed.



See the problem is making countless assertions without bothering to provide any supporting evidence. Speculator held units aren't listed in the City's 2019 Housing Vancouver update. If you want to assume that all secondary rental condos are speculator-owned, that's 22% of the rental units in the city proper. That's page 55.

https://vancouver.ca/files/cov/housing-characteristics-fact-sheet.pdf

57k PBR in 2016 same as 1996 while we have 136k rental households making 79k speculator rentals.

[Changing City]

Originally Posted by misher

https://vancouver.ca/files/cov/housing-characteristics-fact-sheet.pdf

57k PBR in 2016 same as 1996 while we have 136k rental households making 79k speculator rentals.

Tens of thousands of those households live in basement suites and laneway houses. Those are not speculative because they can't be bought or sold independently of the homes they 're associated with.

Please take your inaccurate data and lack of understanding of the housing market off the Office Market thread

[misher]

deleted

[fredinno]

Originally Posted by Kisai

Office and Retail speculation, look no further than that perpetually empty former-Best Buy location in Metrotown. You'd think someone would have occupied it by now, but I'm thinking whoever currently owns it just wants to sit on the property to flip it outside of the halloween and christmas popup store season. Then there is Concord Pacific wasting the entire Sears property, that they will no doubt sit on until the city tells them to they can't use it to market condos out of. Likewise with SHAPE sitting on that retail bigbox store location for City of Lougheed.

All this new build stuff south of Metrotown mall has been perpetually empty
https://www.spacelist.ca/listings/bc/burnaby#292295 , note "virtual office", you're basically renting an address, not space.

The Sears is used as a Concord Open House- which they need even more once NEFC goes through. Also, it's proposed to become condos.

Same thing with SHAPE.




Also, I was mostly asking about what the future of RE prices would likely be- whether commercial/industrial/residential would cool down and how much...

[misher]

Originally Posted by fredinno

The Sears is used as a Concord Open House- which they need even more once NEFC goes through. Also, it's proposed to become condos.

Same thing with SHAPE.




Also, I was mostly asking about what the future of RE prices would likely be- whether commercial/industrial/residential would cool down and how much...

Long term (6 months-1 year) predictions: Retail down, industrial up, office up, multi rental up, luxury down, affordable up.

These predictions are based on a recovery happening within the next 60 days. The longer a recovery is delayed the longer the future will be delayed.

Luxury residential may go up it depends on a lot of government policies. And multi rental may go down too based on government.

[whatnext]

Originally Posted by TheTerminalCity

Doesn't that just feed the larger problem? More people, including speculators, compete for a scare commodity (for sale housing), which drives up the price. Potential buyers may be shut out by speculators, so continue to rent instead with no other local options. The macro effect being that a developer has one more incentive to put up condos for sale than rental, if the ultimate impact is a ready market for higher sales per square foot to buyers. It also offloads the risk of owning a rental building onto the individual unit owners.

I know not everyone here may see it that way.

As a renter, I'd much rather have a purpose-built unit with some security built in than service the more expensive mortgage of an investor and the potential to be kicked out at any given time.

This.

If any condo developers go —-up because of this shutdown, the government should buy out their buildings to use as rentals. We need to go the Vienna route with the government owning a lot of the housing, the free market has failed.

[fredinno]

Originally Posted by whatnext

This.

If any condo developers go —-up because of this shutdown, the government should buy out their buildings to use as rentals. We need to go the Vienna route with the government owning a lot of the housing, the free market has failed.

Or it could end up like Stockholm, where population growth is higher, and the government can't keep up, meaning people have to pay with time for their housing instead of money. https://www.bbc.com/worklife/article/20160517-this-is-one-city-where-youll-never-find-a-home

[misher]

Originally Posted by fredinno

Or it could end up like Stockholm, where population growth is higher, and the government can't keep up, meaning people have to pay with time for their housing instead of money. https://www.bbc.com/worklife/article/20160517-this-is-one-city-where-youll-never-find-a-home

We already had the government try to build/own social housing. Its been a failure. Talk to anyone managing social housing about their experiences. Tenants are incredibly self-entitled, break everything, and restoration companies do very good business. I'm not surprised that several non-profits are having problems getting insurance.


Tenants in government housing are expensive and just bad. Its a black hole.

[fredinno]

Originally Posted by misher

Long term (6 months-1 year) predictions: Retail down, industrial up, office up, multi rental up, luxury down, affordable up.

These predictions are based on a recovery happening within the next 60 days. The longer a recovery is delayed the longer the future will be delayed.

Luxury residential may go up it depends on a lot of government policies. And multi rental may go down too based on government.

What about normal condo market?

I don't get the downwards trend for retail.

I genuinely doubt a recovery is imminent. The stock market is undergoing a dead cat bounce and we're bound for a recession/depression anyways.

[cairnstone]

Originally Posted by whatnext

This.

If any condo developers go —-up because of this shutdown, the government should buy out their buildings to use as rentals. We need to go the Vienna route with the government owning a lot of the housing, the free market has failed.

Will never happen. Nothing goes — up what happens is the construction financing goes away. And I dont see Government wanting to build rental that would sell for over $1000 per square foot. Also what do you do with all the owners that would own the complete units


It would work for all the spec built rentals if they defaulted as they typically are built at a way lower square foot price but still would not hit the low rent threshold

[misher]

Originally Posted by fredinno

What about normal condo market?

I don't get the downwards trend for retail.

I genuinely doubt a recovery is imminent. The stock market is undergoing a dead cat bounce and we're bound for a recession/depression anyways.

Normal=affordable. So up up up! Long term Affordable condos in the CoV don’t get built much anymore while immigration is hot. They are also attractive to investors as they have lower taxes and prices while paying good rent so they have the best ROI ratio. For example $1800/month from a $500,000 condo is a lot more attractive than $2800/month from a $1,000,000 condo.

Retail is facing super high taxes. Retail requires a large floor plate which leads to high taxes which are going even higher this year. When taxes rise more than 5% a year while inflation is ~2% retail can’t survive. Your cutting into its profit margin each year so unless retails profits grow faster than tax increases it will eventually lose. Plus the move to online shopping which is also being pushed by people’s fears of being near each other.

[cairnstone]

Originally Posted by misher

We already had the government try to build/own social housing. Its been a failure. Talk to anyone managing social housing about their experiences. Tenants are incredibly self-entitled, break everything, and restoration companies do very good business. I'm not surprised that several non-profits are having problems getting insurance.


Tenants in government housing are expensive and just bad. Its a black hole.

The liberals and Gregor built a number of them mainly in the dtes and afew throughout DT. And the restoration business do love them. I have worked in a few and they are rough after a while