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Moving Out: Small Businesses Feel the Real Estate Crunch (2016-06-28)

Posted By Administration, Monday, November 11, 2019

Kitsilano, the West End, and Mount Pleasant have always been known for their eclectic mix of shopping and restaurants. With a focus on growing small businesses, these key corners of the city are what give YVR its character and contribute to our local economy. And while many entrepreneurs have been attracted by the affordable rents and high-traffic corners, these blocks that are commonly made up of mom and pop shops may soon become a thing of the past.

Why? Because of redevelopment. Many of the older stores are being torn down and restructured for more modern spaces or mixed-use buildings. As a result, the once affordable rents will be far out of reach. In addition, it could take years for the project to be completed, which means owners would be forced to temporarily shut down while construction took place. As a result, many smaller operators seeking to relocate. The only problem is, where?

Many are going east. Main Street is still reasonable for smaller businesses, ranging from $40 to $60 per square foot. As for Kitsilano, Jane McFadden, the executive director of the Kitsilano 4th Avenue Business Association, shared in The Vancouver Sun that while their motto is “Shop local, shop West 4th”, many in the 2300-block are getting pushed out.

For years, Robson Street has been Vancouver’s most sought-after location for retail. Fashion-focused with high-traffic, it demands an average of $200 per square foot. Independent stores simply can’t compete with those rates, which are why these popular blocks are filled with chains like Forever 21, Zara, Banana Republic, and Aritzia.

And while many may blame redevelopment, new construction has also provided opportunity. Many developers are introducing mixed-use buildings, which offer direct traffic from the residents who share the building. The City of Vancouver has also placed restrictions on the size of retail to encourage an active streetscape in an effort to prevent large box stores from overtaking smaller retailers.

According to a study by LOCO BC, small businesses are incredibly important for the BC economy. When residents shop local, 33% of the revenue directly recirculates into the province, compared to 17% for multinational counterparts. This represents a 77%-100% economic advantage. In addition, every one-percent increase in local shopping translates into more than 3,000 new jobs and $94 million in wages.

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The Evolution of the Office Space (2016-07-05)

Posted By Administration, Monday, November 11, 2019

Before LEED Certification and rock climbing walls became regular fixtures of today’s workplace, the approach to designing the office was a much different story. With many chapters to its history, Martin Nielsen, an architect and mechanical engineer with DIALOG, shared just how dynamic the evolution of the office has been over the past 80 years.

The Open Concept Office

“A true disruptor, Frank Lloyd Wright was the first to introduce the open plan concept,” says Nielsen. Prior to the 1950’s, open-plan offices were mostly consisting of rows of desks for clerical work. Arguably one of the best architects of all-time, Wright based design principles on humanity and their environment. Pictured above is the SC Johnson headquarters in 1939, which was designed by Wright. The columns resemble a lily pad and are meant to draw in natural light, creating an airy and spacious outdoor feel.

The Action Office

In 1964, designer Robert Propst was working in the office-furniture firm Herman Miller when he introduced the cubicle: a flexible, semi-enclosed workspace. These were thought to increase productivity, privacy, and maximize efficiency of space. The Action Office design quickly became popular because it was flexible and movable, saving companies money on construction and development costs. Yet despite his intentions, “cubicle farms” grew far from their original purpose, and soon became a dreaded concept for working professionals who were secluded from their peers.

The Googleplex

The emergency of technology has dramatically altered office design to become much more than a place to work, but rather a venue to live and play. Sprawling across 3.1 million square feet, the isolated solar-powered Google headquarters offers endless perks for their employees. This includes soccer fields, tennis and volleyball courts, free campus bikes to get around the facility, valet, public art, and two organic gardens that grow the vegetables and herbs for the restaurants. You can also find nap pods, multiple fitness centers, and massage rooms. This growing trend towards creating a lifestyle rather than just an office space is how many tech companies are attracting staff in the competitive race for talent.

The Satellite Office

For entrepreneurs and growing businesses, companies like WeWorks have introduced a collaborative and affordable alternative to the modern office. Typically there are four options to choose from: We Membership, a Hot Desk, a Dedicated Desk, and the Private Office. With prices varying from $45/month to $450, co-working spaces have been emerging in Vancouver over the past few years. This includes HiVE Vancouver, Suite Genius, and The Network Hub, which have become popular office alternatives for startups and freelancers.

Nielsen explains that office space design is a reflection of the culture and values of society, and as Millennials are now the majority of working professionals, companies have to incorporate certain elements into their office design. As this generation values sustainability, work-life balance, and collaboration, we’ve circled back to Wright’s ideas of the open concept in order to become more productive and efficient professionals.

From Hootsuite to MEC, Vancouver has become a hub for innovative office design.

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Designing "Sticky Buildings" in Today's Workplace (2016-07-15)

Posted By Administration, Monday, November 11, 2019

In our digitally connected world, the traditional workplace has not only become outdated, but seemingly irrelevant. As telecommuting and email become our preferred method of communication, some may question whether or not offices are even needed in our ‘gig economy’.

Bill Dowzer, a Principal of BVN, an award-winning Australian architectural practice, is a leader in workplace design and a champion of BVN's "collective creation" approach. According to Dowzer, there are two reasons why designing the right office space is important: it creates a sense of belonging, and it builds a community. These two components are not only important for an organization to succeed but to grow, as text messages and Skype meetings can never replace human interaction.

“When conceptualizing the design, we work with the human resources team. Why? Because we base our design on the people,” said Dowzer at last month’s Breakfast Event. “How do you connect people in vertical buildings? How do you create a space that brings in the environment and promotes health and wellness? These are the foundations we need to know before we start drafting. Our goal is to create what we call “sticky” buildings; in other words, places where people want to be.”

Dowzer views higher density as a tool to bring people together. And as more people hide behind a screen, his goal is to force human interaction. He does this through open floor plans and transparency.

“In vertical buildings, we think of creative ways to get people to interact. For example, we’ll make the stairs thinner so people have to bump into each other. A five foot wide stair means people don’t have to say hello; however, if we bring that down to four feet, you’ll have to acknowledge the other person. This starts to build community.”

As food has always been a means to socialize and connect, Dowzer explains that more and more companies need to include shared kitchens and eating areas for staff.

Integrating nature is also an important factor, as research proves that access to outdoor views, fresh air and plants improve employee well being.

Dowzer feels it’s important to remove the hierarchical barriers like private offices and cubicles so that CEO’s and assistants all work together in an open concept, open space approach.

“Office design should be based on the democratization of the workforce. The most effective tool you can give employees is choice. When they can create an environment where people actually enjoy their job, you’ve accomplished a sticky building.”

These contemporary ideas are paving a new era of office design, a path that continues to develop as our work culture demands modern changes and inclusive features.

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A Vancouver Legend: Nat Bosa Shares His Top 3 Career Accomplishments (2016-09-21)

Posted By Administration, Sunday, October 20, 2019

Growing up on a farm in Northern Italy with 11 brothers and sisters, it’s hard to believe that real estate mogul Nat Bosa started from such humble beginnings. Born on December 25, 1944, he moved to Canada in 1958 with his family in search of a better life, and it’s fair to say it was the right move. Despite having only a ninth grade education, Bosa has become a recognizable name with an international reputation as a respected and innovative development company from the west coast.

Recently, Nat was honoured at the NAIOP Annual Icon Lunch at the Four Season’s Hotel, where we learned about his journey that brought him to where he is today. Though he’s had many accomplishments, there are three in particular that he is the most proud of.

Citygate

“This project really was the gate to the city,” said Bosa. “At the time, Mount Pleasant was a bad part of town. But with the construction of Citygate, we were able to turn it around.”

On the former lands of Expo ’86, Bosa developed 9.5 acres of residential homes and dedicated 20% of the project to social housing. With stunning views of downtown, access to public transportation, and walking distance to Vancouver’s top attractions, Citygate expanded the perimeter of downtown and offered a new community in the growing urban center.

San Diego

“The work we did really made a significant change to the city. It’s not about the money, it’s not about Nat Bosa, it’s about ‘let’s do it for the city’.”

For the City of San Diego, Nat Bosa needs no introduction. Revitalizing the downtown core, he built over 1,600 new homes overlooking San Diego Bay in just eight years. From job creation to community building, he’s made it into one of the most sought-after areas to live in Southern California.

The Empress Hotel

“The Empress Hotel is like an old mistress. She’s going to give me good times, she’s going to give me a headache, and she’s going to cost me a piss pot of money. She’s been true to the T.”

Putting it in his signature way, The Empress Hotel in Victoria has been a challenging project for Bosa, but also a rewarding one. Paying $50 million for the property, he’s spent more than the purchase price on the iconic restoration project. However, to him “it’s undoubtedly a privilege to own something like that. We wanted to do this project for the City of Victoria. It‘s our gift to them.”

We’ll be sharing more about the iconic developer in our upcoming blogs, follow us on Twitter for updates!

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Nat Bosa’s Biggest Career Challenges (2016-09-28)

Posted By Administration, Sunday, October 20, 2019

With a career that’s spanned over 50 years and two continents, it’s clear that Nat Bosa’s professional life has reached a level of success that many can only dream of. But like any entrepreneur navigating an ever-changing market, there have been a few challenges along the way.

“This is a thrilling ride. The thrill is to survive the close calls and come back on top,” he said at the NAIOP Annual Icon Lunch earlier this month. And given what he says were the hardest times in the business, it’s no wonder he’s earned the reputation as a resilient visionary that’s had a major impact on communities across North America.

Admitting he was too impatient and anxious to buy something, Bosa purchased 240 units in Seattle for $6.1 million dollars in 1976. However, what he didn’t realize is that he needed takeout financing from a U.S. bank, which at the time was incredibly difficult to receive. Bank after bank, they continued to deny him of an account. He was growing more worried as time was quickly running out. It wasn’t until his accountant called one bank’s head office, who said all they had to do was open an account and put $50,000 in it in order to receive the loan. Bosa did it that day, and was able to receive the loan – just in the nick of time.

In the early 80s, the Canadian government was waging a war on inflation. In an effort to counter it, the central bank drove interest rates higher. As a result, interest rates reached record highs of 24%. Bosa admits pleading with banks not to pull the plug on him as he struggled to make payments on his current projects. He notes that it was through constant communication and staying true to his word that they never did close him down. Many developers were not so lucky.

When Lehman Brothers announced they were declaring bankruptcy in 2008, it affected millions people across the globe, and real estate was no exception. With a strong presence in San Diego, Bosa said that during The Great Recession they went without a sale for a very long time, having to stop all projects. While these were eventually re-launched, they lost hundreds of millions of dollars during this economic downturn.

Though he faced professional challenges throughout his career, Nat Bosa always trusted his instincts. When asked what it takes to succeed in business, he listed the following attributes: courage, vision, integrity, the ability to move quickly, and flexibility. However, he said the most important thing is that every decision “has to feel good”.

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Tackling Real Estate Headlines with Nat Bosa (2016-10-05)

Posted By Administration, Sunday, October 20, 2019

If you’ve read our last few blogs, than you’re well acquainted with the long and prestigious career of developer Nat Bosa. With decades developing skylines in Canada and the U.S., he’s survived through high inflation, the Great Recession, and family fall-outs. It’s fair to say that he’s pretty much seen it all, and now with Vancouver’s real estate hitting record highs and vacancy lows, we sat down with Bosa to see how he felt about the latest headlines on the market.

“Chinese investors head south flee to B.C.’s Foreign Buyers Tax”

With the introduction of the new Foreign Buyers Tax, The Vancouver Sun reported Chinese buyers are fleeing to Seattle to avoid the newly imposed 15% property-transfer tax on foreign nationals buying real estate in Metro Vancouver.

Bosa: “I would have to say that Christy Clark had to do something. The election is coming. I think I would not be far off if I say that 90% of the people in this room would vote for her. Was it the perfect thing to do? No, but there is no perfect thing to do, and she had to do something.

In this industry, we’re all kind of hogs. We don’t want you to touch what’s great for us. I think by doing what she did, she was able to cool the fire but she is not killing the fire. The fire is still there; it’s the best thing that could happen to our market right now. It was getting stupid. I think the market is going to be fine. The Chinese are not going to stop buying here - this is their number one hive.

By doing what she did, she is showing the masses that she’s not in the pockets of the developers, and that’s good. The developers should be just thrilled that she’s doing a great job.”

“Snitch-and-audit enforcement part of Vancouver's proposed empty-homes tax”

Mayor Gregor Robertson announced that Vancouver will have a levy on empty homes in time for the 2017 tax season, and neighbours will be leaned on to help enforce it.

Bosa: “This is going to be complicated. It’s going to be hard to enforce. I heard recently there’s one guy in West Vancouver that bought 37 homes, and I wouldn’t be surprised if they’re all empty. I bet there are some streets in West Van where you can’t find neighbours. That’s what’s wrong. There should be a rule that you have to put people inside of the homes at least and rent the place out.

This is a repeat of the of late 80’s from Hong Kong. They were buying the homes as an insurance policy. We have to force them to at least rent the place out. I don’t disagree with what Greg Robertson is trying to do, but how you are going to implement it is another question.”

“New tariff driving up the price of drywall by up to 276%”

The Canadian government imposed duties of up to 276% on drywall imported from the U.S. in an effort to help Canadian producers. It’s said that these tariffs could add an additional $2,500 to $3,000 to construction costs of a home.

Bosa: “Here we go talking about governments again. We had a government that was ‘Steady Eddie’. Dull, getting arrogant, but Harper was doing his job. Then it was time for a colourful change – well, we got Vanity Fair. Here we are talking about Trump, but no one is talking about what this guy [Trudeau] is doing here?

Am I surprised he’s bringing in this tax? Of course not. Is it good? Of course it’s not good.”

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Making Way for Millennials in the Office (2016-10-16)

Posted By Administration, Sunday, October 20, 2019

As of last year, Millennials have officially become the largest working demographic in Canada. Whether you call them Generation Y, Generation Me, or Echo Boomers, those born between the early 1980’s to the early 2000’s are now carrying the country’s economy. So for any employer looking to succeed, they have to adapt to the needs of this cohort. In particular, the structure and design of the work place.

A recent article in The Vancouver Sunshared how local offices are changing -- literally. Cubicles, corner offices, and segmented hierarchies are not only considered archaic, but often deal-breakers by Millennial professionals.

So if you’re looking to attract talent or retain your current employees, here are a few guiding design principles for the office space.

Open and Flexible Environments

This past summer we were joined by Bill Dowzer, a Principal at an award winning Australian architectural firm called BVN, at the NAIOP Breakfast Event. Dowzer shared how when conceptualizing design, he removes hierarchical barriers like private office and cubicles so that everyone from CEOs to assistants can work together in an open-concept, open-space approach. Millennials want a “democratization of the workforce”, creating an environment that people can actually enjoy the space and collaborate.

This eco-conscious demographic cares about recycling, zero waste, and food composting to reduce their footprint. They want their employer to also share the same ideals, and take a sustainable approach in both the design and operation. Millennials also want buildings that stand out for their sustainable materials and LEED certification.

Work/Life Balance

Healthier offices lead to healthier employees, and Millennials know this. From meditation rooms to fully equipped gyms to ping pong tables, businesses are having to provide amenities to attract top talent.

Location, Location

Beyond just the interior of the buildings, organizations have to think about the exteriors as well. Are you located next to a park or courtyard so staff can spend time outside? And as this generation is increasingly foregoing cars, how close are you to transit? These are all important factors that developers and businesses have to consider in the building process.

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What Effect Will the Foreign Buyers Tax Have on Vancouver? (2016-10-31)

Posted By Paul Kool, Sunday, October 20, 2019

Since its introduction in July, the Foreign Buyers Tax has dominated headlines across the province. In an effort to cool Vancouver’s escalating market, Premier Christie Clark brought in the 15% property transfer tax on foreign buyers in Metro Vancouver. This means non-Canadian residents would have to pay an additional $300,000 if they purchased a $2 million property.

According to recent reports, the tax is working. The total value of purchases by foreigners dropped to $17 million for the month of August -- a major decrease from the $2.1 billion over the previous six weeks.

At a recent NAIOP Breakfast Event, we asked our panelists how they felt the tax would affect the future of foreign ownership in Vancouver.

Kevin Meikle, Vice President, Executive Director, Investment Sales & Capital Market at Cushman & Wakefield

“The market needed to be cooled but maybe the tax was too heavy handed – you don't want to cut butter with a chainsaw. The [Foreign Buyers] tax has caused the market to pause, and I think it just normalized the market. Year over year, we were experiencing increases in the market that just didn’t make sense. Since the tax, it’s been back to business as usual. In terms of the commercial market, it’s almost had zero effect.

We’ve recently had complete sell-outs in our Vancouver and Burnaby projects, which were completed even after the tax was in placed. This tax will have no impact on the condo and commercial market, and just slowed down million dollar single homes.”

Ashley Powell, Senior Vice President, Head of Transactions, Western U.S. Bentall Kennedy U.S.

“If the intent is to slow down fire breathing market, I wonder if it will have the opposite effect?

Compared to San Francisco, Vancouver’s taxes are on par. What I’ve learned is that taxes don’t drive value.”

Foreseeing little impact on Vancouver’s real estate market is a view shared by others as well. In a Globe and Mail article, reporter Gary Mason shared that offshore investment from China will continue to put their money into cities that have introduced a similar tax, like Australia.

“Simply put, the Chinese feel comfortable here and consequently will continue to buy property here.”

What do you think? Tweet @naiopvancouver and let us know!

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Real Estate Investment: Is Canada a Two City Country? (2016-11-10)

Posted By Paul Kool, Sunday, October 20, 2019

Whether in the coffee shop or at the water cooler, there are three things that you can bet Vancouverites are talking about. And if it’s not the weather and hockey, it’s going to be real estate.

In the last five years, Canada’s real estate market has completely changed, reaching prices and demand like never before. Greater Vancouver and Greater Toronto have become the most active and expensive housing markets. With beautiful surroundings, a high standard of living, and limited land, plus a dropping dollar, foreign investors have flocked to the east and west coasts of the country, purchasing homes, condos, industrial, and commercial buildings. Bidding wars with no subjects have become the norm, with many sellers cashing in on their properties that they paid significantly less for only a few years beforehand.

According to MacLeans, inquiries on Juwai.com, an online listing service where Chinese buyers can look for international real estate, rose 143% in Ontario alone last year, with the total value of those homes hitting $11.2 billion. Chinese buyers shelled out nearly $12 billion in real estate in Vancouver, accounting for 33% of the city’s sales. For Toronto, it was $8.4 billion, representing 14% of total sales.

“I tell my clients not to invest in other markets. Only invest in Vancouver. Investing in the downtown core will give you higher equity, liquidity, and high yields,” said Kevin Meikle, Vice President, Executive Director, Investment Sales & Capital Market at Cushman & Wakefield. “We don’t have tertiary options like the States. For example, after the Big 5 [Chicago, New York, Los Angeles, San Francisco, Washington DC] you can invest in Austin or Seattle. Here we have Kelowna.”

Of course, it’s not just Chinese buyers that make up foreign ownership.

Ashley Powell, Senior Vice President, Head of Transactions, Western U.S. Bentall Kennedy U.S., shared that “Bentall Kennedy invests in urban areas that attract Millennials and talent. So yes, we’ll continue to invest in areas like this -- and this is Vancouver.”

As we shared in our last blog post, Premier Christy Clark has enacted the Foreign Buyers Tax in order to simmer the hot market and prevent more homes from sitting vacant. However, compared to cities like Calgary and Montreal, Toronto and Vancouver continue to attract much more attention than their neighbouring counterparts.

Do you foresee other Canadian cities that will become attractive to foreign buyers? Tweet @naiopvancouver and let us know!

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Will President Trump Affect Canadian Real Estate? (2016-11-16)

Posted By Paul Kool, Sunday, October 20, 2019

With November 8th finally behind us, speculations have already begun on how the new Presidential Elect will affect life in Canada. Just like the US itself, opinions seem to be divided. All it takes is a quick scan of the headlines to see just how anxious the world is over what will happen in the next four years.

After our immigration website crashed during election night, many are predicting that Trump’s presidential win will lead to an influx of Americans heading North. And while this may let some home sellers cash in, it may put even greater pressure on the affordability crisis.

The new President’s plan to invest $1 trillion on infrastructure has led many financial markets to worry about inflation. As a result, investors are dumping bonds and causing certain interest rates to rise. Mortgage rates could be affected at any time, according to a recent article in The Globe and Mail.

Trump also said he would like to renegotiate the North American Free Trade Agreement (NAFTA). As America’s closest and largest trading partner, 31.5% of Canada’s GDP based on exports, and 74% of our exports go directly to the US. If this has a less favourable outcome for Canada, it could cause serious economic issues for our country.

However, opposition to free trade deals would also hurt the American economy, forcing their interest rates to stay low for longer. And since U.S. interest rates affect Canadian interest rates, it would mean lower mortgage payments in Canada.

After a record number of Google searches on “How to move to Canada”, the housing outlook is more uncertain than ever. The general consensus from RBC and other economists is that Trump’s policies have a strong potential to accelerate inflation at a much higher rate than is being predicted. Partnered with deep tax cuts and fiscal spending, inflation could be the likely outcome.

Only time will tell whether or not his claims had any merit, but despite the varying perspectives, there is one thing certain: the world is watching anxiously. Though some remain hopeful, others are merely bracing themselves for hard times ahead.

Will Trump affect inflation rates and Canada’s economic future? Tweet @naiopvancouver and let us know!

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