Grosvenor will be pursuing Phase 1 development of its master-planned Vancouver project Brentwood Block in a joint venture with an unnamed Canadian pension fund and B.C.-based investment firm Westerkirk Capital Inc.
The joint venture helps to finalize the “capital stack” and commence construction on the master-planned community that has been in the planning stages for many years, Jamie Delmotte, chief co-investment officer for Grosvenor’s North American property business, said.
The site, located along the southern side of Lougheed Highway next to the Brentwood SkyTrain station, was acquired in stages starting in 2016.
“It’s . . . the final part of raising the capital . . . that’s needed before we can move the project forward,” Delmotte told RENX in an interview on Wednesday. “Five years of hard work to get to this stage on the capital side, and it dovetails nicely with where our teams are on the construction and development of the project.”
Working in JVs is not unusual for Grosvenor, Delmotte said. “Everything that Grosvenor really does in North America is with joint venture partners, so we like to align our capital with other long-term investors, whether it’s . . . investment projects or development projects.”
Brentwood Block represents one of the companies’ largest contributions to the North American housing market to date, delivering needed housing in supply-constrained Metro Vancouver, Delmotte said.
The first phase of Brentwood Block will be made up of 1,730 units, of which 1,279 will be rental housing and 204 below market rate. A multi-storey community centre and 200,000 square feet of commercial space are also planned for the $1.5-billion development stage.
“With current market conditions, these kinds of capital market partnerships are necessary for successful development today, and we will likely be seeing an increasing number of joint ventures such as this one in the years to come,” Delmotte said. “I think almost every project you’re going to see, whether it’s Grosvenor projects or other projects, are going to have longer-term investors stepping up to the table to make these projects possible.”
Grosvenor is a London, England-headquartered owner and developer that has operated in the Lower Mainland of B.C. for over 70 years. It has a $6.5-billion pipeline of projects in North America.
Westerkirk is a private investment firm with an office in Victoria, B.C.
Plans for Brentwood Block
Set on 7.9 acres of land, Brentwood Block is designed to eventually hold six towers and approximately 3,500 condo and rental units.
A highlight of the development is an all-rental tower expected to be the tallest of its kind in Western Canada at over 60 storeys.
Delmotte said the federal government’s elimination of GST on qualified purpose-built rental homes and more favourable financing for rental projects via the CMHC helped to spur the large number of rental homes at Brentwood Block.
“We’ve been interested in trying to find a project where we could build a substantial number of rental units,” he said. “It’s been quite difficult to find a site that works.”
Delmotte said the zoning and location of this site also made the rental component viable and it will help them generate recurring revenue, which has been a priority.
Other features at Brentwood Block include 50,000 square feet of green space, a 44,000-square-foot grocery store and retail stores next to the Brentwood SkyTrain Station. It is intended as a pedestrian-only development.
Market conditions have been challenging
Market conditions in the region have not been easy, Delmotte said. “Construction costs are always a challenge (and) you have a ton of risk.”
“You have a lot of stakeholders that have to come together to make these projects work, whether it’s local government, provincial government, federal government . . . Canadian investors,” he said. “They’re all needed to kind of make these things pencil.”
In the intervening years since announcing Brentwood Block, the Burnaby neighbourhood has grown up around Grosvenor’s site, emerging as a towering urban centre that includes the likes of The Amazing Brentwood by Shape Properties and Gilmore Place by Onni Group, both of which continue to construct. “It’s really matured and evolved,” Delmotte said, calling Brentwood “geographically central” in the region. “It’s very well connected with transit and it kind of represents a newer urban fabric, compared to some of the other town centres.”
“It has a new, crisp feel to it,” he said.
Pre-sales of the first condo units at Brentwood Block started in September, with construction to begin in early 2025. Completion is scheduled for 2030.
Grosvenor is prioritizing sustainability at the project by electrifying all of the in-suite appliances, space heating and cooling systems; installing LED lighting and smart thermostats; and using an efficient envelope design, low-carbon systems and renewable energy, all aimed at achieving the company’s net-zero operational carbon goal.
Grosvenor’s other projects
The nearly 350-year-old company is behind Ambleside, The RISE, Connaught and The Pacific, all in Vancouver.
Ground was broken on the 68-unit townhome Whitford development in Vancouver’s Shaughnessy neighbourhood in September.
Brentwood Block’s neighbouring Mayfair West site, a 14-acre project, is also in development. Mayfair West is planned as a 1.5-million-square foot mixed-use community with over 1,600 housing units, a community park, retail and a child-care facility.
This story has been updated with additional information and comments from Grosvenor.