A slowdown in land-buyer appetite in Metro Vancouver hasn’t stopped owners and real estate brokers from moving forward with efforts to amass assemblies of single-family homes, then market the properties for high-rise redevelopment.
Those efforts are especially prevalent within the orbit of Oakridge Park, the towering five-million-square-foot redevelopment now under construction at Cambie Street and 41st Avenue that’s slated for completion in 2027.
Owned by QuadReal Property Group and developed in partnership with Westbank, the master plan includes reconstruction of the former Oakridge Mall, transforming the site into a multi-tower hub with 2,600 homes for 6,000 residents. The project will also include more than 300 retail stores, office space for 3,000 workers, a community centre, a day care, a library, green space and venues for live performances.
Last week, Westbank announced the first phase of the new shopping centre is expected to open in spring 2025, welcoming more than 100 global retailers to the 650,000-square-foot centre.
Redevelopment offerings continue within Oakridge’s orbit
Recently, a real estate brokerage firm publicized an opportunity to buy land that could be redeveloped into a two-tower complex at 5409-5489 Manson St. The buildings could be designed as rental or strata condos up to 18 storeys within the current zoning rules.
The asking price is $39.9 million for the five contiguous lots that would total 305 feet of frontage and nearly an acre of developable land.
Developers have the option for either 100 per cent secured rental with 20 per cent below market, or market strata with 30 per cent of residential floor area provided as social housing at the Manson Street properties.
Dexter Realty is the listing agency and the properties are being co-marketed with Goodman Commercial.
The site falls within the Cambie Corridor plan that has already led to substantial development along Cambie Street, which runs past Oakridge — a neighbourhood that was predominantly single-family homes.
Ultimately, the Cambie plan aims to convert the area into a high-density hub that includes a mix of low- and mid-rise buildings, with the tallest towers located around the Marine Drive Canada Line Station and Oakridge, which also has a Canada Line stop.
“The Oakridge area has been growing in stature over the past number of years, picking up probably five or six years ago when conditions turned in favour of these larger, purpose-built rental towers,” Ian Brackett, a senior broker with Goodman Commercial, told RENX.
“It’s an ideal area for these types of projects being transit-connected, centrally located halfway between downtown Vancouver and YVR airport.”
Brackett said the influence of the Oakridge project is clear.
“It will deliver a brand-new regional shopping centre, significant office space, a new recreation centre and nine-acre public park,” he noted.
“Excluding the two mega-projects in the immediate area, we counted active applications for nine towers in a four- or five-block radius of Cambie and West 41st.”
There are also several additional towers already under construction, Brackett said.
Assembly offerings outpace buyer appetite, but interest returning
While the appetite to assemble and market such redevelopments appears strong, the hunger to purchase the assemblies and convert them into their higher use still remains relatively sluggish in the region, mostly due to elevated interest rates and uncertainty over when the Bank of Canada could start slashing its policy rate.
“Across the city, developers have been struggling with uncertainty in the market, high costs and long entitlement timelines,” Brackett said. “The response has been to pull back on new acquisitions and carefully scrutinize existing projects in their pipeline.
“That being said, at the right price there are still buyers. Developers currently active are making decisions based on long-term fundamentals. There remains a structural shortage of housing in Vancouver and the slowdown in land sales we have experienced over the past couple years is only going to make that worse.”
Mark Goodman, principal with Goodman Commercial, said his team has noticed an uptick in calls and activity on their listings and rising general interest. “There’s a bit more optimism now as we move into 2024 compared to 2023.”
Goodman added that while nine new development opportunities in the area may sound like a lot, it doesn’t represent a flood of activity.
“Really, those are . . . sites (that) were bought probably four or five years ago and are just now finally coming through the rezoning process,” he said. “If you look at how many sites in that neighborhood have actually been sold or bought within the last two years, it’s like maybe one.”
At nearby Heather Street, Rize Alliance purchased five homes in the summer of 2023 with plans to develop the properties into two multifamily towers. The site also falls within the Cambie Corridor Plan.
That purchase was for roughly $40 million and was followed up by a rezoning application, also for two 18-storey towers. The application seeks to build 344 secured market rental units, including approximately 69 below-market rental homes.
Land assembly deals have “a lot of complexities”
Luk Real Estate Group represented the sellers in the Heather Street deal. Kelvin Luk, principal with the company, told RENX demand from buyers of assembled sites is off-peak, but could start to ramp up as certainty over interest rates emerges.
A wild card, he said, is that the market could also see more foreclosures of residential land, which could prompt trades that lead to larger redevelopments.
“The reality of the market is there’s probably going to be more sites available because of a combination of some foreclosures, some court-order sales and . . . existing sites put together by agents,” Luk said.
Luk noted land assemblies are not easy deals to arrange and take time and the right conditions and attitudes by the homeowners. An assembled site usually needs 150 feet of frontage, which typically requires at least three single-family lots.
Some owners don’t want to sell, or some want higher prices than the market can handle, Luk said. It’s tough to manage various relationships in a group of homeowners and neighbours.
“I’ve been doing strata assemblies and land assemblies for a long time; there’s lots of complexities in this type of deal.”