Wesgroup Properties is moving forward with a pair of residential towers in Burnaby’s Metrotown area after receiving final approval from the city last week to construct the second building.
The 38- and 35-storey towers, called Reign, are located at 6280 and 6350 Willingdon Ave., and could possibly be built together depending on the effectiveness of the presales, Dean Johnson, vice-president, development with Wesgroup told RENX in an interview.
The major residential development is among several projects by established developers in the neighbhourhood that are pushing forward with pre-sale programs despite the strains in the real estate market, namely:
- elevated interest rates;
- a slower economy; and
- the rising tide of costs — including development levies and construction prices.
Johnson said the South Tower at Reign was approved in 2023 and is now at the pre-sale stage. They’ll now start marketing the North Tower, with final approval in hand. The second tower is a condo building ranging from studios to three-bedroom homes.
“It’s a transit-oriented development steps away from Burnaby Central Park, as well as the Metrotown Skytrain station and Metrotown (Metropolis) Mall,” Johnson said.
Altogether the two towers will add 617 strata condos and 116 rental units that will replace the rental homes being demolished in the current buildings at the property.
“We’re excited to replace all of the existing units on site,” Johnson said, noting the rental units will be built in the bottom section of the South Tower.
New developments go ahead despite challenges, amenity costs
Vincent Minichiello, a vice-president with CBRE in Vancouver, said there are roughly 12 large development projects in the pre-sale phase right now in the Metrotown area: “We’re in an area where inflation is cooling and I think everyone, frankly, telegraphed that interest rates are going to come down, or start coming down.”
That would help drive demand, but there’s still broader uncertainty, mostly to do with developer costs, Minichiello said.
In addition to Wesgroup, developers including Anthem Properties, Concord Pacific and others are in the sales phase for large-scale residential projects in the Metrotown area.
“These projects should proceed so that there is quite a lot of new inventory that should come online in a couple years,” Minichiello said, noting groups like these are well-capitalized and well-established to help keep the housing pipeline flowing.
In the same week Burnaby approved Wesgroup’s second tower, council also took steps to introduce controversial new Amenity Cost Charges (ACCs) and update its Development Cost Charges (DCCs).
The ACCs were created in 2023 by the provincial government as a development finance tool that allows local governments to collect funds for amenities like community and recreation centres, day cares and libraries from new developments that result in increased populations.
ACCs will be adopted by cities on an optional basis and are meant to standardize development costs, replacing Community Amenity Contributions that are typically negotiated between cities and developers on a case-by-case basis. However, critics say the new system could increase the overall development cost burden for projects.
“Burnaby was one of the first municipalities to put together a policy on a per-door basis for the revised DCCs, which have increased, and the ACC, which is obviously the new one,” Johnson said. “If it’s more expensive overall than the previous option, that’s going to obviously have a detrimental effect on the delivery of housing.”
“Metrotown is a unique opportunity”
With Reign, Johnson said Wesgroup hopes to begin construction on the first tower by January and could build both towers at the same time.
“Metrotown is a unique opportunity . . . it’s been a desirable place to live for quite a period of time,” Johnson said, pointing to its regional connectivity and plethora of shopping amenities.
“It’s really matured in the region over the last number of years, even through down times, and up times, as a really excellent location.”
Big picture, it’s an “interesting time” to be developing large projects like these, Johnson said, listing inflation and higher interest rates as the main challenges to individuals’ purchasing power, and stressing that homebuyers have limits to what they can spend.
“It’s hard to predict what’s going to come in the next . . . year, but we do anticipate interest rates to drop by the end of the calendar year — and at that time, hopefully (we’ll see a) robust response in the marketplace in terms of sales volumes, and potentially sales price increases.”
Port Moody axes design panel after Wesgroup complaint
Meanwhile, Johnson reacted to recent news the City of Port Moody axed its advisory design panel (ADP). On Tuesday, council voted 5-2 to disband the panel for a year, after Wesgroup Properties complained about the delayed review of a major project, the Vancouver Sun reported.
The decision came after the panel decided in January to defer review of Inlet District (formerly Coronation Park), a major development Wesgroup is building. City staff said the decision to move away from the volunteer-based panel was made independently from the complaint.
“It’s an interesting development,” Johnson said of the decision. “From our understanding, it was a conversation that has been ongoing for quite some time.
“Our experience with the design panel was quite challenged,” he told RENX. “We expressed concerns and I think those concerns potentially aligned with things that were happening already at a staff level.”
Johnson said his team was already working on the design process with an architect engaged on the city’s behalf to produce the necessary design elements as part of rezoning application to ensure the city ended up with a project that would benefit the public.