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Realty Check

theANNUAL – 27


CBRE Foreword David Montressor, Executive Vice President Midway through 2021 we reflect on the previous

As multifamily occupancy and rents recover from their

18 months, Canada’s evolving multifamily market

short-term lows, we have a strong sense that values will

conditions, and CBRE’s current outlook for each major

increase proportionately throughout 2021 and into 2022.

market in the country. Multifamily remains one of the most positive Canadian commercial real estate stories, but the sector has not been without its challenges. Certainly, the most dramatic shift we’ve observed is the erosion of market fundamentals in major urban centres: vacancy increased in every province and urban multifamily rents struggled in cities across the country.

Active investors share an unwavering resolve in their Canadian multifamily investment thesis and a strong conviction that the current market softness is transient. Recent data supports this and reinforces a major theme of 2021: the pending recovery of urban multifamily assets. As of Q2 2021, the path to recovery is more apparent south of the Canadian border where restrictions

However, underneath the surface and beyond the often-negative headlines, the multi-residential sector demonstrated impressive strength and resiliency in several ways. First and foremost, the industry continued to provide safe and affordable shelter to millions of Canadians while absorbing new cost-pressures and adopting higher standards of operations. Meanwhile, the relative affordability of Canadian rental housing translated into superior stability for the asset class at a

have subsided and select submarkets have even surpassed their pre-COVID rent levels. Positive indicators are also emerging in Canada. Rents in Toronto have grown month-over-month every month since February while rents in Vancouver are nearing full recovery. It’s important to note how recent rental growth has largely coincided with higher vaccination rates, as well as the crucial reopening of our economies over the summer.

time of widespread volatility in broader capital markets.

The continued vaccine rollout, the easing of economic

With Multifamily reestablished as commercial real

and travel restrictions, as well as the return of

estate’s defensive safe haven, capital formation (debt

immigration and student demand for the Fall semester

and equity) has solidified for the sector, translating

will underpin a near-term recovery in Canada’s multi-

into increased multifamily allocations and tailwinds in

residential sector. The next stage of the recovery will

pricing.

include the unwinding of leasing incentives, which will

Following an abrupt slowdown in transactions in Q2 2020, the pandemic-induced inertia subsided in Q3 and has since given way to a fervent pace and volume of investment activity that has continued to accelerate well into 2021. This has arguably been the distinguishing factor of 2021: a tremendous spike in sales volume across the country. Major dispositions are occurring in all major

be closely tied to improvement in occupancy levels for stabilized buildings. Post-recovery, demand-side momentum will be led by the federal government’s well-publicized immigration targets (400,000 people annually) and compounded by policy-based barriers to supply in major markets. We continue to monitor active capital sources and are positioned to assist and advise as

markets from coast-to-coast. Year-to-date investment

market conditions evolve.

puts Canada on track to match totals from 2019 and 2020,

For additional market intel, you can contact any member

which is significant considering the record year leading into COVID and the sale of Northview REIT in 2020. Investors are absorbing the surge in product for sale, and values continue to appreciate, notwithstanding the

of the National Apartment Group across the country to discuss the current state of the Canadian MultiResidential market.

increase in borrowing costs since the start of the year. In Realty Check, the rent and vacancy figures stated are for the purpose-built rental apartment stock. The figures do not include rental rows (townhouses) or rented condominiums. The rented condos make up a significant part of the secondary market, especially in larger centres; there are other components to the secondary market (including rented duplexes, rented doubles and rented single family homes.)

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Realty Check

Atlantic-Halifax

Chris Carter, Vice President Apartments were the main focus for investment real estate in Atlantic Canada in 2020, as the asset class accounted for 66% of the region’s $1.3B in investment sales volume for the year. Development land was second at 7.3% and industrial was third for 4.1%. In terms of investment sales volume, the region had never seen one asset class be so dominant and it was the largest investment volume ever seen regionally for the apartment sector. 2020 sales statistics included 28 transactions, 3,028 units, amounting to $635,000,000 and representing a 239% YoY increase. In terms of pricing, sales averaged $209,700 per suite which was a 31% increase over 2019. Q1 2020 saw the largest apartment transaction in Halifax’s history, with CAPREIT acquiring QuadReal’s entire portfolio of 1,503 units across 14 buildings for $391M (CBRE Transaction). Pricing continues to increase, as rents rise, and higher construction costs make new projects more expensive on a relative basis. Cap rates edged down in 2020 from 2019, especially for top quality product. The buyer profile changed over the course of the year. In the first quarter there was substantial institutional and REIT activity while in the second half of the year, sales activity skewed towards smaller assets and was dominated by local private buyers. Travel restrictions hampered the ability of out-of-province buyers to tour and inspect assets. However there were examples of Toronto-based buyers acquiring in Halifax in Q3 and Q4 2020. Halifax added 2,050 rental units in 2020, bringing the rental universe total to 52,244. Condo development makes up a very small percentage of new unit starts in Halifax. There continues to be a push for urban units on

the peninsula; however, after a few years of slowing, suburban development is still strong with multiple projects underway. even with travel restrictions in place for most of the year, Halifax saw positive population growth and was the second fast growing city in Canada in 2020. With Halifax recently being ranked by Maclean’s Magazine as the best city in the country to live, we anticipate this will fuel additional population growth in the coming years pushing rental demand higher. Vacancy rates in Halifax increased from 1.0% in 2019 to 1.9% in 2020. Being a university town, this was primarily driven by loss of student demand with no in-class learning. In fact, the majority of vacancy increase was in the urban area, with suburban nodes holding steady or even seeing vacancy rates decreasing. Halifax’s average apartment rents increased YoY by 4.1% to $1,170. With lower vacancy and increasing rents we are seeing less unit turnover in the market, with most landlords indicating that turnover had been in the 20-30% range in previous years but is now closer to 10-15%. With the continued demand for multifamily investment, coupled with construction cost pressures, we anticipate strong pricing to continue into the second half of 2021 and 2022. As prices increase across major markets, we expect to see more out-of-province buyers, especially with the potential for travel restrictions being eased in the second half of 2021. Investor demand is holding steady and resulted in a deep buyer pool for a major portfolio sale in the first half of 2021 with over 1,000 suites across Atlantic Canada. Demand going forward will continue to focus on core urban product, as well as newer, high-quality suburban product.

Market Data Total

Year over Year

Investment Volume (Units)

3,028

Up

Investment Volume (Price)

$634,658,500

Up

Price per Unit

-

Reported Cap Rate

Average

Low

High

12

1,503

$22,666,375

$860,000

$391,000,000

Up

$209,597

$58,800

$358,193

-

Down

4.8%

4.0%

6.0%

New Rental Supply

2,050

Up

-

-

-

Vacancy Rate

1.9%

Up

-

-

-

Source: RealNet, CBRE Research

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Realty Check

Atlantic-Halifax

Quadreal Portfolio Location:

Halifax (downtown assets and suburban node – Clayton Park)

Suites:

1,503 suites (14 buildings)

Price per Suite:

$260,146

Date Closed:

February 2020

Buyer Type:

REIT

The Junction (3075 Devonshire) Location:

Halifax (Peninsula)

Suites:

119 suites

Price per Suite:

$358,193

Date Closed:

September 2020

Buyer Type:

Institution

Location:

Bedford

Suites:

88 suites

Price per Suite:

$254,545

Date Closed:

August 2020

Buyer Type:

REIT

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$391,000,000

Price

$42,625,000

The Ashton (79 Holtwood Court)

451 Broad Street

Price

Location:

Dartmouth

Suites:

86 suites

Price per Suite:

$297,674

Date Closed:

November 2020

Buyer Type:

REIT

Price

$22,400,000

Price

$25,600,000


Realty Check Québec Montreal Marc Hetu, Senior Vice President Investment in the Greater Montreal Area was healthy in 2020, recording over 750 transactions totaling $2.5 billion in deal volume. The 2020 total is in line with the 2019 benchmark sales volume of $2.4 billion, an impressive performance given the difficult economic conditions due to the ongoing health crisis. Although the number of high-profile transactions decreased in 2020, activity involving smaller assets under 60 units was unprecedented, a great outcome during an otherwise challenging year for commercial real estate. Much like the period following the 2008/2009 financial crisis, pricing for multi-family assets was in line with 2019 throughout the 2020 Covid-19 pandemic. Montreal’s tremendous economic momentum prior to the health crisis sustained pricing and trumped the negative effects of Covid-19. Pricing was particularly strong for larger assets (60+ units), including Class A properties that fit the investment criteria for Institutions and REITs, with cap rates ranging between 3.0% and 4.25%. On a per suite and per square foot basis, prices varied between $290,000 and $525,000 per unit, working out to $335 to $560 per square foot. Capitalization rates for the most desirable 1960s vintage concrete apartment buildings were recorded in a similar range, between 3.50% and 4.25% in 2020, with the average sale price per suite falling between $175,000 and $200,000. One outlier in this category should be highlighted, a trophy downtown apartment building known as Le Cartier, which traded for $588,000 per unit.

2020

For the second consecutive year, new purpose-built rentals accounted for nearly two-thirds of all new supply. Forward looking indicators of supply including construction starts and units under construction indicate a robust rental pipeline with little signs of slowing down. In 2020, the City’s average vacancy rate edged higher to 2.70%, only slightly lower than the average vacancy rate 3 years prior in 2017. Demand is expected to be led by the city’s burgeoning tech scene, a sector that has performed spectacularly during the health crisis. Tech jobs in Montreal have surpassed the 140,000 mark, representing a 14% increase over the past 5 years, and generally offer salaries that are 80% above Montreal’s median income. 2021 investment activity has fully rebounded and is on pace to exceed 2020’s total by the end of Q3. Pricing is consistent with last year, reflecting the sector’s strength as shutdowns persist. Institutional investors will continue to favor new construction while being highly selective. REITs are expected to continue their acquisition programs, targeting a mix of value-add deals and new builds as their stock values gradually recover. However, private investors are once again expected to capture the greatest market share as they make opportunistic acquisitions while interest rates are at record lows and their institutional competitors take a more cautious approach to their acquisitions.

Market Data Total

Year over Year

Average

Low

High

Investment Volume (Units)

14,562

Up

22

3

400

Investment Volume (Price)

2,521,413,000

Up

$2,918,000

$1,000,000

$107,000,000

Price per Unit

-

Unchanged

$173,000

$31,624

$1,685,000

Reported Cap Rate

-

Unchanged

4.39%

3.00%

5.50%

New Rental Supply

12,708

Up

-

-

-

2.7%

Up 270bps

-

-

-

Vacancy Rate

Source: RealNet, CBRE Research

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Realty Check Québec Le Art, 1437-1441 Rene-Levesque West Location:

Ville-Marie

Suites:

138 Suites + 8,675 Sq. Ft. Commercial Space

Price

$72,750,000

Price per Suite: $527,174 Date Closed:

November 2020

Buyer Type:

REIT

EQ8 LaSalle, 6790-6890 Newman Blvd Location:

LaSalle

Suites:

300 Suites + 10,179 Sq. Ft. Commercial Space

Price

$105,000,000

Price per Suite: $350,000 Date Closed:

January 2020

Buyer Type:

Institutional

Le Cartier, 1115 Sherbrooke Street West Location:

Ville-Marie

Suites:

182 Suites + 19,963 Sq. Ft. Commercial Space

Price

$107,000,000

Price per Suite: $587,912 Date Closed:

December 2020

Buyer Type:

Private Investor

Havre-des-Iles, 2525 Havre-des-Iles Avenue Location:

Laval

Suites:

400 Suites + 4,565 Sq. Ft.

Price

$71,000,000

Price per Suite: $177,500 Date Closed:

November 2020

Buyer Type:

Private

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Realty Check Ontario (GTA) Greater Toronto Area David Montressor, Executive Vice President The last year was characterized by extreme highs and lows for the GTA apartment market. After two consecutive years of tremendous investment and appreciation in values, including a record year in 2019, the GTA market recalibrated in response to shifting demand, softening fundamentals, and macro uncertainty. Investment activity troughed in 2020, ending the year at $1.9 Billion, a marked departure from the previous year’s $3.9 Billion record total. GTA vacancy rates lifted off historical lows to 3.4% on average and downtown multifamily assets battled mid- to upper single-digit vacancy rates, levels not seen in well over a decade. GTA average market rents are still yet to recover to pre-Covid levels and are not likely to do so before 2022. While fundamentals have softened, investor conviction has not. Factoring out the major acquisition of Continuum REIT in Q4 2019, and the abrupt pause in deal flow during Q2 2020, transaction activity was actually unchanged from 2019. Since then, investors have resumed purchasing activity with a firm view towards a market recovery and a conviction in multifamily which is flowing through to pricing. The GTA’s average price per suite now exceeds $300,000 with the largest price increases attributed to deals over 100 suites (average price per suite of $325,000)

2020

and further premiums observed for deals over 250 suites (average price per suite of $335,000). Cap rates compressed in 2020, trending below 3.2% on average and breaking below 3% on several transactions. Cap rate compression was primarily driven by forwardlooking rent expectations and a year-over-year nosedive in bond rates: the 5-year GoC opened 2019 at 185bps and closed 2020 at 39bps. A recovery in GTA market fundamentals will be led by immigration and supported by the City’s high-quality employment landscape. Toronto is slated to receive ~30% of the Federal government’s 400,000-person annual immigration target for the next 3 years. The corresponding demand far exceeds 5-year average annual housing completions of less than 35,000 homes per year. In addition to producing 20% of Canada’s GDP, Toronto’s economy is ranked 1st in North America by a massive margin for the most tech-related jobs created in the last 5 years. The City’s shortage of trade labor and legislative barriers to supply will be exacerbated by rampant cost escalations for building materials. Since 2017, the housing industry estimates Toronto’s supply shortfall has averaged 10,000 housing units annually. This is a structural long-term trend that is not going away

Market Data Total

Year over Year

Average

Low

High

Investment Volume (Units)

6,468

Down

55

10

331

Investment Volume (Price)

$1,965,000,000

Down

$16,791,000

$1,052,000

$157,975,000

Price per Unit

-

Up

$304,000

$122,000

$630,000

Reported Cap Rate

-

Down

3.18%

2.49%

4.90%

New Rental Supply

2,949

Up

-

-

-

Vacancy Rate

3.4%

Up

-

-

-

* Source: RealNet, CBRE Research, CMHC

36 – theANNUAL


Realty Check Ontario (GTA) 500 Duplex Ave Location:

Toronto

Suites:

330

Price

$157,975,000

Price per Suite: $478,712 Date Closed:

December 2020

Buyer Type:

Private Equity

165 La Rose Avenue Location:

Etobicoke

Suites:

211

Price

$83,600,000

Price per Suite: $396,209 Date Closed:

November 2020

Buyer Type:

Private Equity

301 Dixon Road Location:

Etobicoke

Suites:

225

Price

$78,500,000

Price per Suite: $348,889 Date Closed:

October 2020

Buyer Type:

Institutional Investor

2801 Jane Street Location:

North York

Suites:

234

Price

$64,000,000

Price per Suite: $273,504 Date Closed:

February 2020

Buyer Type:

Institutional Investor

theANNUAL – 37


Realty Check Ontario (GGH) Greater Golden Horseshoe David Montressor, Executive Vice President After considerable momentum in 2018 and 2019, the Greater Golden Horseshoe (GGH) saw another increase in annual sales activity in 2020, despite a pause in listings during Spring. 2020 investment activity totaled $1.070 Billion*, mostly attributed to deals in the latter half of the year. It’s important to note this figure does not include activity from the sale of Northview REIT, whose Ontario suite count on its own would represent over two years’ worth of typical deal volume. Investment in the GGH continues to be shaped by large portfolio transactions: the 8 largest transactions represented a greater portion of annual sale volume than all remaining trades combined. REITs, Institutions, and private equity groups have reaffirmed their interest in Ontario’s secondary markets, motivated by attractive yields and stable growth prospects for multiresidential investments in the region. Buy- and sellside activity was primarily driven by investors entering and exiting long-term investments rather than shifting geographic priorities. In terms of pricing, Ontario’s secondary markets have experienced meaningful cap rate compression amid similar demand pressures and supply constraints facing the rest of Ontario. Cap rates range between high-3% and mid-4% yields for higherquality, large-scale offerings. Pricing varies according

2020

to location and quality but premiums for scale and renovated product have proven to impact values significantly based on investor demand. The development of newly constructed purpose-built rentals continues to play an important role within Southwestern Ontario’s market dynamics. Attractive land prices and lower development costs support the ongoing business case for development, but despite increased supply, Ontario still has a shortage of housing. In terms of current fundamentals, Ontario’s average vacancy rate increased to 3.2% in 2020 with denser, urban markets being outperformed by smaller suburban markets. Average vacancy rates range from low-1% to high-3% across the province. Fundamentals are expected to rebound by 2022 with professionally managed, mid-market rentals positioned to lead a recovery in occupancy levels. The relative strength of Ontario’s secondary markets is a testament to the overall resiliency of the province’s multi-residential sector. As of Q2 2021, GGH investment activity is on pace to match last year’s total by the end of September. Purchase activity is still led by REITs and institutional funds seeking valueadd returns and we expect this segment of Ontario’s multifamily market to outperform through to the end of 2021 and into 2022.

Market Data Total

Year over Year

Average

Low

High

Investment Volume (Units)

125 Deals 4,788 Suites

Up

39

10

321

Investment Volume (Price)

$1,067,601,000

Up

$8,541,000

$590,000

$142,366,000

Price per Unit

-

Up

$223,000

$36,765

$443,508

Reported Cap Rate

-

Down

4.25%

3.29%

6.20%

New Rental Supply

-

Varies

-

-

-

Vacancy Rate

-

Varies

-

-

-

38 – theANNUAL


Realty Check Ontario (GGH) 8 & 16 Wilsonview Ave Location:

Guelph

Suites:

112

Price

$33,000,000

Price per Suite: $294,643 Date Closed:

July 2020

Buyer Type:

REIT

140 Main Street West Location:

Hamilton

Suites:

321

Price

$142,366,000

Price per Suite: $443,508 Date Closed:

April 2020

Buyer Type:

Institution

1505 Ottawa Street North Location:

Kitchener

Suites:

147

Price

$58,922,000

Price per Suite: $400,830

150 Sanford Avenue North Location:

Hamilton

Suites:

149

Date Closed:

April 2020

Buyer Type:

Institution

Price

$26,000,000

Price per Suite: $174,497 Date Closed:

July 2020

Buyer Type:

Private

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Realty Check

Edmonton

Thomas Chibri, Associate Vice President Coming into 2020, multifamily was arguably the most sought-after asset class in Edmonton. While COVID-19 affected the entire real estate market, multifamily has seemed to fair better than most. The availability of government subsidies propped up the sector throughout 2020 as many landlords did not experience any material decline in rent collections. However, as the year progressed there was an uptick in vacancy and slowing of new product absorption. This was compounded by a shrinking rental pool from university closures and the effect of numerous lockdowns on employment. Surprisingly, average rental rates held steady throughout the year, but this was largely offset by the increased incentives landlords had to offer, especially in new generation product. This trend has continued through the first half of 2021. For many institutional investors, the outlook is shrouded by cautiousness as groups take a “wait and see” approach with respect to our near-term growth prospects. Many groups prefer to sit on the sidelines until employment, wage and immigration growth

2020

have a more defined line of sight in our city. This has created an opportunity for private capital to fill the void and secure real estate that they would otherwise be priced out of. The availability of historically low rate financing has fueled recent acquisitions. With the ability to secure CMHC insured 5-year financing at sub 2.0%, groups are taking the calculated risk that our economy will improve over the medium-term and thus build their way into rental growth. As we progress through 2021, there still remains demand for multifamily product, but pricing must reflect the current reality. Most investors have abandoned the traditional stabilized income approach and instead focused their underwriting on in-place rent and incentives. While cap rates have remained stable, this has caused values to decrease due to a shrinking NOI. At the same time as revenue is down, significant insurance premium and property tax increases are having a major effect on multifamily NOI. The City must take note of the undue burden placed on the rental sector and work with groups to help find some middle ground.

Market Data Total

Year over Year

Average

Low

High

Investment Volume (Units)

50 Buildings – 2,709 Units

Down 13 Buildings - Up 303 Units

55

4

306

Investment Volume (Price)

$569,618,600

Up $135,324,515

$11,593,645

$393,700

$100,000,000

Price per Unit

-

-

$138,426

$50,000

$420,168

Reported Cap Rate

-

-

5.38%

3.50%

7.10%

New Rental Supply

2,905 Units

Up 1,162 Units

-

-

-

8.00%

Up 220bps

-

-

-

Vacancy Rate

Devonshire Portfolio Location:

Downtown Edmonton

Suites:

832

Price per Suite:

$246,394

Date Closed:

February 2020

Buyer Type:

REIT

40 – theANNUAL

Price

$205,000,000


Realty Check

Edmonton

Mayfair North

Price

Location:

10803 Jasper Avenue

Suites:

238

Price per Suite:

$420,168

Date Closed:

January 2020

Buyer Type:

REIT

Level at Upper Windermere

Price

Location:

1104 Windermere Way SW

Suites:

171

Price per Suite:

$238,596

Date Closed:

February 2020

Buyer Type:

Private

$40,800,000

Wellington Park Townhomes

Infiniti on 105

$100,000,000

Location:

13220 140 Street

Suites:

220

Price per Suite:

$154,545

Date Closed:

March 2020

Buyer Type:

REOC

Price

$34,000,000

Price

Location:

11703 105 Avenue

Suites:

109

Price per Suite:

$259,633

Date Closed:

March 2020

Buyer Type:

REIT

$28,300,000

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Realty Check

Calgary

Richie Bhamra, Senior Vice President Calgary’s multi-family investment volume contracted for the second consecutive year, as COVID-19 created additional uncertainty for the local economy already hamstrung by the previous collapse in energy markets. We are seeing relatively less liquidity in Calgary’s multi-family marketplace, as there continues to be a bid-ask spread between vendors and purchasers. As a result, Calgary experienced fewer trades with an average deal size more than 30% lower yearover-year. The majority of purchasers were private investors, chasing higher yields and lower price per doors, relative to historical averages. REITs/REOCs and institutional capital largely remained dormant, as they take a wait-and-see approach on the near-term fundamentals. Over the past year, a multitude of headwinds resulted in weakened market fundamentals. The average vacancy increased from 3.8% to 6.3%, largely due to a combination of factors, including interprovincial and international migration coming to a halt, students

2020

returning home as post-secondary institutions shifted classes online and a record 3,200 newly-constructed units added to the purpose-built rental inventory. The majority of the buildings that experienced higher vacancy are situated around the downtown core as tenants move to the suburban neighborhoods, seeking larger unit sizes and lower rental rates. Asking rents remain flat, with downward pressure on net rents as owners continue to offer incentives, in order to maintain occupancy or achieve projected absorption timelines. Through the first half of 2021, investment volume has remained in line with the previous year although generally muted as the pandemic places limitations on the ability to transact, in addition to uncertainty around energy markets. However, as the economy begins to open in the second of the half the year and midterm fundamentals begin to improve, investment demand for multi-family is expected to normalize to historic levels.

Market Data Total

Year over Year

Average

Low

High

Investment Volume (Units)

1,353

Up

26

4

228

Investment Volume (Price)

$244,960,000

Down

$4,710,000

$600,000

$36,000,000

Price per Unit

-

Down

$181,050

$62,500

$442,160

Reported Cap Rate

-

Up

4.71%

4.15%

5.54%

New Rental Supply

3,273

Up

-

-

-

Vacancy Rate

6.3%

Up 250bps

-

-

-

Hays Farm Apartments Location:

Haysboro

Suites:

228

Price per Suite:

$157,895

Date Closed:

Dec 2020

Buyer Type:

Private

42 – theANNUAL

Price

$36,000,000


Realty Check

Calgary

Varsity Estates Village Location:

Varsity

Suites:

39

Price per Suite:

$435,128

Date Closed:

Nov 2020

Buyer Type:

Private

Queens Park Village Location:

Queens Park

Suites:

187

Price per Suite:

$163,102

Date Closed:

Jul 2020

Buyer Type:

REIT/REOC

$16,970,000

Price

$30,500,000

1309 Cameron Avenue SW & 604 14th Avenue SW

King’s Alley

Price

Location:

Beltline

Suites:

55

Price per Suite:

$209,091

Date Closed:

Mar 2020

Buyer Type:

Private

Price

$11,500,000

Price

Location:

Braeside

Suites:

156

Price per Suite:

$174,199

Date Closed:

Feb 2020

Buyer Type:

Private

$27,175,000

theANNUAL – 43


Realty Check British Columbia Lance Coulson, Executive Vice President The beginning of 2020 started strong throughout Metro Vancouver and Greater Victoria as momentum and investor demand for multi-family assets carried over from the previous year. Between January 1 and March 30, 2020, 20 rental apartment properties transacted, accounting for more than $481 million in total sales volume. Among these transactions, 2 of the 20 sales were large-scale concrete rental properties that accounted for a large percentage of the total sales volume in Q1, as both high net-worth private and large institutional buyers were attracted by strong market fundamentals and low interest rates. In Q2, sellers put a pause on bringing new listings to market, but the general uncertainty around multifamily assets dissipated in Q3 and Q4. By the end of 2020, as market activity resumed, the challenge for most asset classes was where new cap rates would trend and how property values would be affected. For multifamily, the

2020

year concluded with a total of 84 sales and over $1.12B in total sales volume in Greater Vancouver and Victoria combined. Given the resiliency of multi-family properties throughout 2020, price expectations have not differed greatly from pre-pandemic levels. In several cases, pricing is now even higher for core locations in Metro Vancouver. Pent-up demand and sell-side momentum have translated into a tremendous 1st half of 2021 where sales volume has eclipsed $1 Billion between January and June. This includes a historic $292.5 Million, 15-property, 614-suite apartment portfolio sale completed by CBRE which closed in Q1. Major portfolio sales of high-quality concrete assets continue to make-up the bulk of total transaction activity in 2021. As fundamentals improve, we expect pricing and investor demand to resume an aggressive growth pattern that will extend beyond the last half of the year and into 2022.

Market Data Total

Year over Year

Average

Low

High

Investment Volume (Units)

2,509

Down

38

4

230

Investment Volume (Price)

$899,896,788

Down

$14,060,887

$1,160,000

$120,000,000

$340,745

Up

-

-

-

Reported Cap Rate

2.50% - 3.50%

Unchanged

-

-

-

New Rental Supply

1,357

Down

-

-

-

Vacancy Rate

2.6%

Up

-

-

-

Price per Unit*

*Includes only traditional concrete and wood-frame apartment sales and was not included new purpose-built rental sales and any re-development sites

Source: RealNet, CBRE Research, CMHC

West Urban Vancouver Island & Kelowna Portfolio Location:

$300,000/Suite

Suites:

Nanaimo, BC; Campbell River, BC; Parksville, BC; Kelowna, BC

Price per Suite: 394 Units (Combined 5 buildings) Date Closed:

December 2020/February 2021

Buyer Type:

Institution

44 – theANNUAL

Price

$118,200,000


Realty Check British Columbia South Granville Apartment Portfolio Location:

1245 & 1255 West 10th Ave, Vancouver, BC

Suites:

22 Units (Combined 2 Buildings)

Price

$7,375,000

Price per Suite: $335,277 Date Closed:

July 2020

Buyer Type:

Private Investor

Birchwood Manor Apartments Location:

Abbotsford, BC

Suites:

31 Units

Price

$7,118,000

Price per Suite: $229,613/Suite Date Closed:

December 2020

Buyer Type:

Private Investor

St. James Apartments Location:

New Westminster, BC

Suites:

14 Units

Price

$2,350,000

Price per Suite: $167,857/Suite

The Henrietta Apartments Location:

Vancouver, BC

Suites:

11 Units

Date Closed:

September 2020

Buyer Type:

Private Investor

Price

$4,800,000

Price per Suite: $436,364/Suite Date Closed:

September 2020

Buyer Type:

Private Investor

theANNUAL – 45

Profile for Marc Cote

theANNUAL National 2021 - Realty Check  

theANNUAL, theANNUAL National, Realty Check, CBRE

theANNUAL National 2021 - Realty Check  

theANNUAL, theANNUAL National, Realty Check, CBRE

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