The Ultimate Vancouver Rumour Thread!

[jollyburger]

Originally Posted by rofina

I read through the last couple of pages, and I want to make an observation.

Its a bunch of educated people talking policy and trying to interpret how those policies will drive outcomes.

Would we not be better served with a more market driven approach?

Why not let developers simply build what the market is willing to uptake?

Perhaps, once gone to presale, there would be no appetite whatsoever for this tower, in its form, at the cost it will take, ultimately forcing the developer to reconsider.

Would that not be the ultimate best case scenario? Or perhaps even a mix use, office in 60% of lower half, and residences in the 40% above.

The rigidity in thinking and micromanagement of outcomes in the building process here to me seems very counter intuitive and shockingly unimaginative for a City that would bill it self as progressive.

Completely open to being wrong about this, but would love to know why/how.

As mentioned there are long term benefits of having a strict planning policy with land speculation, conflicts with different land uses. But then I also understand the confusion with these "no exception" statements when you see "residences" throughout the CBD that somehow exist because they provide some other benefit to the community. It's only a rule until some politician changes it.

[Changing City]

Originally Posted by rofina

I read through the last couple of pages, and I want to make an observation.

Its a bunch of educated people talking policy and trying to interpret how those policies will drive outcomes.

Would we not be better served with a more market driven approach?

Why not let developers simply build what the market is willing to uptake?

Perhaps, once gone to presale, there would be no appetite whatsoever for this tower, in its form, at the cost it will take, ultimately forcing the developer to reconsider.

Would that not be the ultimate best case scenario? Or perhaps even a mix use, office in 60% of lower half, and residences in the 40% above.

The rigidity in thinking and micromanagement of outcomes in the building process here to me seems very counter intuitive and shockingly unimaginative for a City that would bill it self as progressive.

Completely open to being wrong about this, but would love to know why/how.

I'll resist the temptation to write a long essay reply. Here are some shortened thoughts.

Leaving it to the market would definitely see a very different mix of buildings in the CBD.

For example, Shangri-La and Trump probably wouldn't have hotels. There wouldn't be offices under the Hotel Georgia Residences. The MNP Tower would be residential. The Exchange would probably have been converted to lofts, rather than a hotel, and the tower would probably be residential too. It's a fair bet that several other hotels would be converted to residential - for certain the Hotel Vancouver and the Sandman on Davie, and probably others too.

Land values would reflect residential rather than commercial valuations. That would have raised office costs a lot, and we would probably have seen fewer offices built, and fewer companies moving here. Some commercial projects probably would have gone ahead because institutional investors owned the sites - Vancouver Centre 2 and 745 Thurlow for example, but Oxford probably wouldn't have bought the site for The Stack because Amacon wouldn't have sold it off, they would have built a residential tower just like they did on the adjacent lot where the zoning at the time allowed it.

And all those new residents, as Officedweller noted, would expect their views to be protected and so make it even harder to develop office or hotel buildings close by.

[jollyburger]

Originally Posted by Changing City

I'll resist the temptation to write a long essay reply. Here are some shortened thoughts.

Leaving it to the market would definitely see a very different mix of buildings in the CBD.

For example, Shangri-La and Trump probably wouldn't have hotels. There wouldn't be offices under the Hotel Georgia Residences. The MNP Tower would be residential. The Exchange would probably have been converted to lofts, rather than a hotel, and the tower would probably be residential too. It's a fair bet that several other hotels would be converted to residential - for certain the Hotel Vancouver and the Sandman on Davie, and probably others too.

Land values would reflect residential rather than commercial valuations. That would have raised office costs a lot, and we would probably have seen fewer offices built, and fewer companies moving here. Some commercial projects probably would have gone ahead because institutional investors owned the sites - Vancouver Centre 2 and 745 Thurlow for example, but Oxford probably wouldn't have bought the site for The Stack because Amacon wouldn't have sold it off, they would have built a residential tower just like they did on the adjacent lot where the zoning at the time allowed it.

And all those new residents, as Officedweller noted, would expect their views to be protected and so make it even harder to develop office or hotel buildings close by.

But then explain the contradiction of saying that residential is bad in the CBD but then allowing all that residential to be built into those developments.

[Changing City]

Originally Posted by jollyburger

But then explain the contradiction of saying that residential is bad in the CBD but then allowing all that residential to be built into those developments.

Those residential towers are exactly why the policy exists. The policy that removed residential from the CBD isn't that old, it was part of the Metro Core Plan which was developed because of the concern that there wasn't enough capacity for future office and hotel development in future years. It was launched in 2005, and adopted in 2007, when the report noted "In the current market residential values can outbid any other land use, including office and other commercial. From a job space perspective, where residential use is allowed in job areas the land values increase, which tends to make any non-residential development less viable." The Plan also increased the base zoning for commercial in the CBD by an additional 2 FSR.

The Shangri-La tower was proposed in 2005, and the Ritz-Carlton (later Trump) in 2006, before the policy was adopted. The original Bing Thom tower at the Hotel Georgia was also around 2005, and so was Jameson House. (The Hudson residential tower was proposed a little earlier in 2002, and justified because it added disabled access to the SkyTrain station). Those were examples of the sorts of proposals that were causing some of the City Planners and commercial property developers to ring the alarm bells about future capacity, and the impact on future employment space.

The new policy doesn't completely ban residential development, but it requires that it only be justified by on-site heritage or non-market housing protection, and must provide the base zoning in commercial space before any residential space. So Trump Tower couldn't be submitted under that policy. It could only be developed when it was, because it had been submitted before the policy was adopted.

I can think of only one residential tower that has been submitted since the 2007 adoption of the Metro Core Plan. The first version of The Post had a residential component, as well as an office tower, and the heritage protection of the Post Office allowed it to be considered. Eventually Quadreal dropped the residential for an all office addition. (The residential tower of Telus Garden is just outside the CBD in sub area 'C' where residential is allowed as part of a mixed use building, which is why it has an office podium).

The only obvious site remaining in the CBD where the residential restriction applies that I can think of that could be a candidate for some residential is the Bay Parkade, which includes the vacant Dunsmuir Hotel which is both potentially a heritage building, and was an SRO when it was safe to occupy.

[hollywoodnorth]

Originally Posted by Klazu

I agree with others that this should be a hotel tower. Maybe we could recoup some of the hundreds of affordable hotel rooms lost to junkie housing. Once the pandemic is over, tourists considering visiting Vancouver will be shocked with there being almost no hotel rooms below 4 star remaining in downtown.

this is something I have been thinking about alot recently there will be literally no sub $200 rooms left in the City proper thanks to BC Housing and their buying spree.

which will ..... wait for it ..... cause a major explosion in AIRBNB once things get back to normal and then wait for it ........ us regular working class renters take it all in the ass.

thanks to the NDP and BC Housing. but hey as long as the junkies get free housing and pay no taxes everything will work out just fine!

[hollywoodnorth]

Originally Posted by Changing City

I'm sure you can think of several more obvious candidates for redevelopment to residential in the West End and Downtown.

speaking of that I am VERY surprised the Sands Best Western on Davie has lasted this long ....... anyone know the status on that building?


Hotel Listel seems like it will be a goner soon as well judging by whats going on a block away.


and at Robson @ Denman ... I cant imagine the Times Square building will last another 5 years in its current state with the new tower next door and all the mega projects on Alberni.

[jollyburger]

Originally Posted by hollywoodnorth

speaking of that I am VERY surprised the Sands Best Western on Davie has lasted this long ....... anyone know the status on that building?


Hotel Listel seems like it will be a goner soon as well judging by whats going on a block away.


and at Robson @ Denman ... I cant imagine the Times Square building will last another 5 years in its current state with the new tower next door and all the mega projects on Alberni.

Someone already bought it for redevelopment

https://www.biv.com/article/2014/06/davie-street-hotel-sells-for-31-million

[hollywoodnorth]

Originally Posted by jollyburger

Someone already bought it for redevelopment

https://www.biv.com/article/2014/06/davie-street-hotel-sells-for-31-million

I do remember this ... but 7 years later and not a Peep?

I have to imagine they are trying to collect more of the sites on that block. But if the Safeway block is a guide we could see 2 towers if they get the lots to the East of the hotel.

[Changing City]

Originally Posted by hollywoodnorth

I do remember this ... but 7 years later and not a Peep?

I have to imagine they are trying to collect more of the sites on that block. But if the Safeway block is a guide we could see 2 towers if they get the lots to the East of the hotel.

The strata on the corner of Davie and Denman isn't allowed by the West End Plan to redevelop taller, but it looks like there could be two towers on the block if the Sands and the buildings to the east were combined. If they were condo, there would have to be a non-market component given to the City, like The Jervis and Mirabel up the hill. Alternatively they could be 100% rental like Zephyr and the other two new towers on the 1600 block of Davie.

Asia Standard bought the Landmark on Robson in 1997, and it took 20 years for them to get round to redeveloping it.

[jollyburger]

The City Square mall at West 12th and Cambie Street across from City Hall has sold for $225 million.

Details of the blockbuster sale were outlined in a recent CBRE market research report.

The 249,881 sq ft. shopping centre was purchased by Sun Commercial, also known as SUNCOM. The mall was last assessed in 2018 at $102 million.

The Richmond-based commercial real estate company’s other holdings include the Best Western Sands Hotel on Davie Street near English Bay; the Mylora golf course, and the Westwood Plateau Golf and Country Club.

https://www.urbanyvr.com/city-square-mall-sold/

[s211]

Originally Posted by jollyburger

https://www.urbanyvr.com/city-square-mall-sold/

That's an aggressive price, and surely indicates redevelopment is contemplated.

[whatnext]

Originally Posted by s211

That's an aggressive price, and surely indicates redevelopment is contemplated.

Hopefully they realize it is a heritage building.

[Changing City]

Originally Posted by s211

That's an aggressive price, and surely indicates redevelopment is contemplated.

Check the date of the transaction - it was over two years ago. Since then they've spent quite a bit in repairs and upgrades.

[WarrenC12]

Originally Posted by Changing City

Check the date of the transaction - it was over two years ago. Since then they've spent quite a bit in repairs and upgrades.

Have they? This is from the article:

Patterson says the configuration of the retail at City Square needs a rethink.

“The current configuration of the centre’s retail component is awkward at best. Redevelopment of parts of the centre could extract value if done right, and it will be interesting to see if a residential component will be added to City Square as well,” he added.

The mall is still as weak as ever. Office space upstairs that probably brings in some money, but they've had open retail spots for a long time, and some weird/questionable business models in there.

Pharmasave appears to be moving in, but Starbucks left.

I'm curious if the overall deal includes the big parkade off Cambie that the CoV uses. Or if that's owned separately.

[VancouverOfTheFuture]

Originally Posted by WarrenC12

I'm curious if the overall deal includes the big parkade off Cambie that the CoV uses. Or if that's owned separately.

the CoV owns that parkade last i knew.

[Changing City]

Originally Posted by WarrenC12

The mall is still as weak as ever. Office space upstairs that probably brings in some money, but they've had open retail spots for a long time, and some weird/questionable business models in there.

Pharmasave appears to be moving in, but Starbucks left.

I'm curious if the overall deal includes the big parkade off Cambie that the CoV uses. Or if that's owned separately.

I agree the retail element isn't, and hasn't been particularly appealing for many years. Maybe reconfiguration would help, although it's not obvious how, as the two former school buildings are heritage buildings. They could maybe redevelop one or both of the more modern 12th Ave office towers, although that would be difficult without closing the whole place down, which would an expensive exercise. I don't know if it would be worth it. With City Hall without most of their staff for a year the retail will be struggling even more at the moment.

The fixing up seemed to be the stonework, and the glazed canopy, which are sensible investments whatever the long- term future of the project is.

[jollyburger]

The link for City Square was to highlight that they also owned the Sands Best Western on Davie. I'm pretty sure the new landlord said they wanted to turn it into some community health/wellness centre in the interim.

The 2615 Cambie Street lot is owned by the city with 230 stalls.

https://rezoning.vancouver.ca/applications/555w12/buntreport.pdf

[rofina]

Originally Posted by Changing City

I'll resist the temptation to write a long essay reply. Here are some shortened thoughts.

I love your thoughts and long replies. You're one of the most knowledgeable posters here. But appreciate your reply nonetheless.

Leaving it to the market would definitely see a very different mix of buildings in the CBD.

I would view that as a preferable outcome. The deadness of the CBD after 6pm does not seem a desirable outcome to me. Obviously that's one opinion.

For example, Shangri-La and Trump probably wouldn't have hotels. There wouldn't be offices under the Hotel Georgia Residences. The MNP Tower would be residential. The Exchange would probably have been converted to lofts, rather than a hotel, and the tower would probably be residential too. It's a fair bet that several other hotels would be converted to residential - for certain the Hotel Vancouver and the Sandman on Davie, and probably others too.

What I'm hearing is that somehow Hotel operators would not be interested in setting up more rooms? This seems very counter intuitive to me. COVID reality ignored Vancouver is a tourism hot spot. Had those rooms not been created it would seem to me the average rate would trend up to a point where market demand would easily fill the void as the numbers began to make sense.

Land values would reflect residential rather than commercial valuations. That would have raised office costs a lot, and we would probably have seen fewer offices built, and fewer companies moving here. Some commercial projects probably would have gone ahead because institutional investors owned the sites - Vancouver Centre 2 and 745 Thurlow for example, but Oxford probably wouldn't have bought the site for The Stack because Amacon wouldn't have sold it off, they would have built a residential tower just like they did on the adjacent lot where the zoning at the time allowed it.

That's an interesting take. My understanding is we are living that reality anyway.

(COVID qualifier)

In 2019 the office vacancy rate in Vancouver was at the lowest of any major metro in North America.

This is indicative of a broken market.

Low vacancy = higher lease rates = higher returns = builders come to market with product to capitalize on returns = supply grows = lease rates moderate = building slows.

That's the cycle - the issue is as I understand is that cap rates even during the 2019 period were so egregiously low on commercial properties that investment boards were not comfortable allocating capital to build in Vancouver. Why risk 300 million for a new tower if you are getting 3ish% cap rates when other metros offer double to triple that?

It would seem to me the policies you outlines have failed to achieve the desired outcomes.

Where am I wrong?

And all those new residents, as Officedweller noted, would expect their views to be protected and so make it even harder to develop office or hotel buildings close by.

In my proposed market driven reality, losing views is a reality. Purchase wisely knowing you might lose a view. This one I will argue till I die.

No one will be able to explain to me how its the Cities responsibility via policy to ensure incumbent residents maintain a view. That's asinine and patently unfair.

[jollyburger]

Gillespe when talking about Fairmont Pacific Rim (literally across from the convention centre) said it was originally zoned only for a 800 room hotel and that it made no sense so the 50/50 split between hotel and residential. Not sure if there's some independent opinion on the market economics of running a hotel in Vancouver. I guess Hyatt has 644 rooms and Hotel Vancouver with 507, Parq 517 rooms.

2018 Interim Hotel Development Policy

https://council.vancouver.ca/20180710/documents/p2.pdf

Originally Posted by rofina

What I'm hearing is that somehow Hotel operators would not be interested in setting up more rooms? This seems very counter intuitive to me. COVID reality ignored Vancouver is a tourism hot spot. Had those rooms not been created it would seem to me the average rate would trend up to a point where market demand would easily fill the void as the numbers began to make sense.


That's an interesting take. My understanding is we are living that reality anyway.

(COVID qualifier)

In 2019 the office vacancy rate in Vancouver was at the lowest of any major metro in North America.

This is indicative of a broken market.

Low vacancy = higher lease rates = higher returns = builders come to market with product to capitalize on returns = supply grows = lease rates moderate = building slows.

That's the cycle - the issue is as I understand cap rates even during the 2019 period were so egregiously low on commercial properties that investment boards were not comfortable allocating capital to build in Vancouver. Why risk 300 million for a new tower if you are getting 3ish% cap rates? When other metros offer double to triple that?

It would seem to me the policies you outlines have failed to achieve the desired outcomes.

Where am I wrong?



In my proposed market driven reality, losing views is a reality. Purchase wisely knowing you might lose a view. This one I will argue till I die.

No one will be able to explain to me how its the Cities responsibility via policy to ensure incumbent residents maintain a view. That's asinine and patently unfair.

[rofina]

Originally Posted by jollyburger

Gillespe when talking about Fairmont Pacific Rim (literally across from the convention centre) said it was originally zoned only for a 800 room hotel and that it made no sense so the 50/50 split between hotel and residential. Not sure if there's some independent opinion on the market economics of running a hotel in Vancouver. I guess Hyatt has 644 rooms and Hotel Vancouver with 507, Parq 517 rooms.

2018 Interim Hotel Development Policy

https://council.vancouver.ca/20180710/documents/p2.pdf

That attachment leads into a whole new rabbit hole for discussion, but really would drive me back full circle to where I started.

From the City document;

Over the past few years, illegal short-term rental (STR) of residences in the downtown and
adjacent neighbourhoods have met some of the increased demand for tourist accommodation.
While staff acknowledges the benefit STRs provide to the tourism industry, in the face of an
affordability crisis and record low vacancy rates, the City had to prioritize housing to people who
want to live and work in Vancouver

AKA - AirBnB use is filling a void that hotels left behind. Demand, meet supply.

Follow up questions;

- Why is it not economically viable to run a hotel in Vancouver? I have to assume its cheaper to build a hotel room versus a DT condo? It would seem counterintuitive AirBnB could be profitable vs a lesser expensive hotel unit?
Without having a clue, I'm quite sure the answer will be government interference at some level.

- (somewhat rhetorical) Why is there not enough supply of housing to meet all demand necessary?

Either way - both of the above point to failed policy.