For Immediate Release (3 pages)
Thursday, April 27, 2017
Contact:
Andrew Petrozzi
604.646.8392
[email protected]
Editors/Real Estate Reporters
• Please click on link to view and download Avison Young’s Spring 2017 British Columbia MultiFamily Investment Report:
http://www.avisonyoung.com/fileDownloader.php?file=files/contentfiles/Offices/Vancouver/Research/2017/Vancouver_Multifamily_WinterSpring2017.pdf
British Columbia multi-family sales activity remains strong
with dollar volume second highest on record
Avison Young releases its Spring 2017 BC Multi-Family Investment Report
Vancouver, BC -- Demand for multi-family assets in BC remained near record levels in 2016 as
investors continued to acquire properties in communities throughout the province, including
secondary and tertiary markets such as Victoria and Penticton, respectively. Even as the sale of
multi-family assets in BC registered the second-highest dollar volume in history in 2016, sales
activity in the back half of the year was the slowest in terms of deal and dollar volume in the past
two years. Multi-family investment activity remained highly elevated in 2016 after recording 73
transactions valued at $734 million – second only to the record set in 2015 when 80 properties
valued at $1.41 billion traded hands. The previous record was 43 deals valued at $630 million in
2012. (Avison Young only tracks multi-family investments trading at more than $5 million.)
Sales activity in 2016 was largely focused on the first half with 43 transactions valued at $471.9
million. The second half, which recorded 30 transactions worth $261.9M, was notably slower than
the first half, but the pace does not appear to have been hampered by the introduction of a 15%
foreign buyers tax in August 2016 by the BC government. Instead, the brief pause is more related
to a lack of supply and the continued unwillingness of many owners to sell quality, well-located
assets even with such properties fetching record pricing. In terms of deal velocity and dollar
volume, the second half of 2016 was the slowest half since the second half of 2014 (19 deals/$171
million).
These are some of the key trends noted in Avison Young’s Spring 2017 British Columbia MultiFamily Investment Report, released today.
Years of rising prices and cap rate compression largely stabilized in 2016, albeit at elevated
values and lower average cap rates than previously noted in the BC market. This pause has
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enticed some owners and buyers off the sidelines and given both more confidence to conclude a
transaction.
“Capitalization rates for well-located multi-family assets in Vancouver were more frequently found
to be less than 2% in 2016, but were often part of a land play or assembly or had a significant
upside in rents,” comments Avison Young Principal Robert Greer. “Density speculation – another
form of land banking – is increasingly a key factor in determining the value of a multi-family asset
as owners hold out for potential rezoning changes that would boost density, and factor that
potential into their pricing expectations.”
Moving forward, the City of Vancouver will need to allow increased density and height on
development sites to make rental projects feasible in Vancouver due to rapidly escalating land costs.
It is anticipated that sales volume will approach record highs in 2017 as local and offshore investor
demand for rental buildings remains strong, particularly for assets with redevelopment potential.
The report also contains a Q&A with Gary Pooni, president of Brook Pooni Associates,
discussing the evolving nature of public participation in the development process of multi-family
projects.
Avison Young is the world’s fastest-growing commercial real estate services firm. Headquartered
in Toronto, Canada, Avison Young is a collaborative, global firm owned and operated by its
principals. Founded in 1978, the company comprises 2,400 real estate professionals in 79 offices,
providing value-added, client-centric investment sales, leasing, advisory, management, financing
and mortgage placement services to owners and occupiers of office, retail, industrial and multifamily and hospitality properties.
-endFor further info/comment/photos:
• Robert Greer, Principal, Avison Young: 604.647.5084
• Michael Keenan, Principal and Managing Director, Vancouver, Avison Young: 604.647.5081
• Andrew Petrozzi, Principal, Vice-President, Research (BC), Avison Young: 604.646.8392
• Sherry Quan, Principal, Global Director of Communications & Media Relations,
Avison Young: 604.726.0959 or 604.647.5098
www.avisonyoung.com
Avison Young was a winner of Canada's Best Managed Companies program in 2011 and
requalified in 2017 to maintain its status as a Best Managed Gold Standard company
Follow Avison Young on Twitter:
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For Avison Young listings and deals: www.twitter.com/AYListingsDeals
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