Multifamily Update Jan – May 2017

With so much activity ($127M) in the multi-family sector in 2016, it is no doubt it will continue to be a sought after product type in 2017. Colliers Multifamily Apartment team has secured the largest market share in YTD dollar volume with over $29M in sales.

For more information or to obtain a complimentary no-obligation confidential market value estimate of your property, please contact us.

So often, we hear the term ‘fundamentals‘. We are constantly being told that strong fundamentals support the price levels, and that there is no foreseeable decline in demand. Let’s take a look and see exactly why Victoria continues to paint a positive story for investors.

0.5% Vacancy 

Sustained demand for rental housing compressed Greater Victoria’s vacancy rate to 0.5% in 2016. Vancouver experienced a vacancy rate of 0.7% earning Victoria the title of most competitive rental market in Canada.

5.5% Rent Growth

James Bay saw the strongest rent growth of 7.4%, while the West Shore increased the least due to the delivery of over 200 new units. Overall, rent growth was 5.5% across the region in 2016.

1,800 Under Construction: Langford lead the region in multiple dwelling starts in Q1 2017. Currently over 500 purpose-built rental units are under construction in downtown Victoria. Absorption of these new rental units is rapid, with many buildings achieving full lease out within the first few weeks.

24,000 Rental Unit Stock: The stock of rental apartments remained relatively unchanged from the previous year as aging units were removed out of the overall stock for renovation. Victoria’s apartment stock is tired and aging, with over 80% of the units being pre-1970’s.  A significant amount of renovations and new product is being prepared for lease at higher rates.

3.8% Unemployment:

Victoria leads the country in employment growth with strong job creation in technology, services, and government. Strong migration of the 16-24 age group is a key driver to rental demand. Acceleration in single family home prices keeps many would-be first time homebuyer in the rental market.

3.0 – 5.5% CAP rate

Cap rates range significantly on apartment transactions. Downtown, Oak Bay, James Bay, and Fairfield enjoy the lowest cap rates in the region at under 4%. Lower quality and smaller buildings in the suburban areas require higher cap rates as cap-ex, tenant quality, and location are compromised. It is important to note a myriad of variables are to be considered on each transaction: suite mix, rent/sf, rent leaseable area, buildings’ age and condition, location, frame or highrise, strata vs non-strata, land value (development site), special financing.

2.3% GDP

Real GDP is expected to be in excess of $16B in 2017, a growth of 2.3%. The previous year, 2016, yielded an impressive growth of 2.6% placing Victoria in the top 10 Canadian cities. Recent surpluses posted by the B.C. government are now leading to increased public spending, prompting output gains in the previously sluggish public administration and noncommercial services sectors. Victoria Shipyards is showing growth with a contract to upgrade 5 frigates for the Royal Canadian Navy, and refit of diesel submarines. The Federal government granted the facility $36M to upgrade weapon systems on 5 patrol frigates beginning in 2018.

68 Unit Apartment Building Proposed in Gordon Head

Kang & Gill Construction Ltd is undergoing a Development Permit and Rezoning Application for the below listed properties. The proposed rezoning would be RA-1 (Apartment Zone) which would allow for a 68 unit apartment building with underground parking.

Kang Gill Land Acquisiton Shelbourne

PIDCivic AddressZone CodeLot Size (sf)Sales HistoryYear BuiltActual Land Use2016 Assessed Total Value
017-561-3614024 SHELBOURNE STRS-6 10,057 4/17/2015 $475,000.00 1949 SINGLE FAMILY DWELLING $506,200.00
017-561-3534028 SHELBOURNE STRS-611,2787/31/2015 $700,000.001995TRIPLEX$871,000.00
018-508-5114030 SHELBOURNE STRD-17,08010/30/2015 $500,000.001993DUPLEX, STRATA SIDE BY SIDE$618,000.00
018-508-5294032 SHELBOURNE STRD-14,24610/30/2015 $350,000.001954DUPLEX, STRATA SIDE BY SIDE$396,200.00
010-906-5924036 SHELBOURNE STRS-611,88410/30/2015 $660,000.001988SINGLE FAMILY DWELLING$581,000.00
TOTAL44,545$2,685,000 $2,466,200

Kang & Gill Construction assembled the site over 7 months in 2015, for a total acquisition cost of $2,685,000 for a 44,545 square foot (1.02 acre) parcel. After dedication the site size will be reduced to roughly 38,782 square feet.

The proposed development would have a FSR of 1.7 and a lot coverage of 39%. This density gives a metric of $35 per buildable square foot.

The proposed development, ‘Affinity’, is immediately north of the recently completed Boulevard development. Affinity would be similar to the Boulevard Building at 4000 Shelbourne.

Variances are requested for: building setback, building height, parking, and fence height.

Height: The applicant is targeting a 5 storey development with a proposed height of 14.8 metres.

Parking: 68 for residents, and 14 visitor = 82 parking stalls. This is below what the RA-1 zoning requires, which would be 102 spaces.

Community Contributions of $310,000.

The proposal has gained support from the Director of Planning and will be submitted to other departments and council for further discussion. For more information on the status of this site contact Dustin Miller.

25 Unit Multifamily Transaction in Oak Bay

A local investor recently purchased a 25 unit apartment building located at 2314 OAK BAY AVE on May 1, 2017.

Newport King apartments is a extremely well maintained 55+ building. The previous owner from Oak Bay held the property since 1998 when it was acquired for $1,500,000.

Purchase Price: $6,000,000
Price/door: $240,000

Anticipated rents: $3.00/sqft
Land: 20,132 sqft

The property is midblock and only 350m from the Beach Drive waterfront and Haynes Park.

For more information on 2017 multifamily sales in Greater Victoria contact Colliers Victoria multifamily specialist.

7 New Single Family Homes coming to North Quadra

A two lot land assembly has been granted conditional approval for a seven lot single family subdivision from the District of Saanich in the North Quadra neighbourhood.

The two lot site was acquired by Gurdeep Binning of Saanich in 2016. New single family infill development is rare in Saanich, and this will be a welcomed addition to an already established neighbourhood.

Civic Address Lot Size (sqft) Zoning Purchase Price
4040 Saanich Road 30,021 RS-6 Single Family $1,250,000
971 Lakeview 18,665 RS-6 Single Family $730,000
Total 48,686 $1,980,000

This land assembly achieved a 7 lot subdivision with the District of Saanich. The existing zoning is generous enough to allow the subdivision of 3 fee-simple lots and 4 bare-land strata lots.

Metrics of Value:

Price/lot = $282,857
Price/sqft land = $40.67

The site has many environmental sensitivities. Additional density will require road widening, rock blasting, and servicing upgrades. As a result, 29% of the site will be an environmental covenant. A total of 67 trees are included in the tree plan. 13 trees will be removed during the site servicing phase, and 17 during the building permit phase. Many will be replaced after full build out.

The site was marketed and sold by Dustin Miller.

 

20 unit apartment building transacts in James Bay

AGB Properties, a privately owned apartment operator recently sold one of its three James Bay assets.

The Vancouver based buyer incorporated under 40 BOYD HOLDINGS LTD.

The apartment building offers 20 units, hard wood floors, recently updated roof, and renovated foyer.

Civic Address Zone Code Lot Size Acquisiton Cost & Date Year Constructed Actual Land Use 2016 Assessed Value
40 BOYD R3-2 16,050 Feb 1, 2017
$4,300,000
1964 3 Storey Walkup $3,249,000
Price/Unit $215,000 /Sqft Land $268

Situated footsteps from Dallas Road waterfront, Menzies, and Beacon Hill Park this property is attractively situated. This was an off-market transaction.

36 unit strata development goes to public hearing in Fairfield

Empressa Properties has made significant progress on its 3 lot assembly on Burdett street in Fairfield. The project is now approaching the public consultation stage for the re-zoning request.

Local entrepreneur Karl Robertson approached the 3 landowners in the sleepy community of Fairfield in Spring 2015. Well versed in the Fairfield NCP, Karl sought out under utilized urban properties. He found a ripe opportunity with a contiguous row of small lot properties surrounded by larger multi-family developments. With about 2 weeks of negotiations with the land owners, Karl found himself an off-market deal!

The Development Site:

Civic Address Zone Code Lot Size Acquisiton Cost & Date Year Constructed Actual Land Use 2016 Assessed Value
1120 BURDETT AVE Victoria R1-B 7,200 10/29/2015 $785,000 1928 SINGLE FAMILY DWELLING $949,000.00
1124 BURDETT AVE Victoria R1-B 4,920 10/29/2015 $775,000 1926 TRIPLEX $888,000.00
1128 BURDETT AVE Victoria R3-AM-1 5,880 10/29/2015 $615,000 1930 SINGLE FAMILY DWELLING $859,000.00

The Math:

The acquisition and proposed 4 storey, 36 unit concrete development give the following metrics of value for development sites in Fairfield.

  • Total Acquisition Cost: $2,175,000
  • Site size: 18,015 sqft
  • Price/sqft of land: $120
  • Proposed FSR: 1.83
  • Price/ buildable sqft: $66

With a building efficiency of 85%, Empressa should have about 28,000 saleable sqft that should market anywhere between $600-800/sqft. Construction costs in current market are anticipated to be $220/sqft.


The project will offer 10 different suite layouts. The 1 bedrooms will range from 532 – 685 sqft. The 2 bedrooms will range from 882 – 1072 sqft.

Parking is generous at this project with 34 / 36 units having a dedicated secure underground parking stall. An additional 3 visitor parking stalls will be provided.

This will be a popular development and is welcomed by most of the surrounding neighbourhood. The project is well designed, embraces quality timeless materials, and a well balanced unit mix. A fantastic location in North end of Fairfield offers easy walking to amenities, downtown, and inner harbour.

You can view detailed renderings, floor plans, and the proposal here.

Chard navigates municipal process for his 8th consecutive Victoria residential project

UPDATE: CITY OF VICTORIA APPROVED THIS DEVELOPMENT ON MAY 11, 2017  

The large mid-block parking lot on Yates between Quadra and Blanshard has significant development value. The land owner and prominent Victoria private developer, Chard, has submitted his revised plans for what is going to be known as ‘The Yates on Yates’.

Site Profile:

Civic Address Lot Size (sqft) Transaction Date & Price
845 Johnson 7,442 10/6/2016 $1,475,925.00
848 Yates 7,200 10/6/2016 $5,999,998.00
849 Johnson 7,442 10/6/2016 $1,475,925.00
852 Johnson 7,200 10/6/2016 $1,524,074.00
TOTAL 29,400 $10,475,922

A proposed FSR of 7.52

Residential buildable: 213,090 sqft
Commercial buildable: 7,890 sqft
Total buildable: 220,980 sqft
Land cost / buildable: $47.41

4 lot Land Assembly. Current use: asphalt parking

the Yates on Yates is across the street from Chard’s 100% rental project at 819 Yates (under construction) and stratified 834 Johnson building (completed 2011). The nearby rental building, 819 Yates, contains 209 suites and will be sold in full to a Canadian Pension Fund consortium upon completion. A great example of a successful partnership between institutional capital and local businesses. Victoria’s 0.5% vacancy rate will continue to attract large investor groups and spur more rental construction.

The strong rental demand is also reflected in The Yates on Yates project. The development application includes:

  • Tower A is a 21 storey market rental building fronting along Johnson Street. Includes 75 one bedrooms, 36 two bedrooms, and 2 two bedrooms. Total residential units: 113. Additionally 2,240 sqft of CRU’s will be at the podium.
  • Tower B is a 21 storey stratified condominium building fronting along Yates Street. Includes 52 one bedrooms, 3 one bedroom + den, 41 two bedrooms, 11 three bedrooms, and 4 two bedroom ground oriented townhouses. Total residential units: 111. Additionally 5,650 sqft of CRU’s will be at the podium.
  • Residential units will range from 530 – 1,400 sqft
  • A parking ratio of 0.5 stalls / unit in the rental Tower A
  • A parking ratio of 0.67 stalls / unit in strata Tower B
  • 15 residential visitor stalls
  • 76 parking stalls provided for commercial users

Chard is known for his well executed amenity and rooftop areas. This project follows Chard’s skill set in creating inviting and beautiful open spaces. There will be no public courtyard, but the two towers will overlook onto a 3rd floor outdoor greenspace. Both towers will have a shared rooftop patio space including a outdoor kitchen, kids play area, lounge, dog area, fire bowl, and dining areas.

two residential and rental towers on Yates and Johnson st. Rental (left), Sale (right).

848 Yates

36 unit rental building proposed for Cedar Hill X @ Cedar Hill

A development permit amendment and variance has been submitted to the District of Saanich to allow for a 36 unit multi-family development consisting of a three-storey 24 unit apartment and a two-storey 12 unit apartment.


The project is targeted for the NE corner of Cedar Hill & Cedar Hill X Road. The developer has blended the structures in nicely with the immediate neighbourhood, and is proposing high quality exterior material finishes. Prime location off the Shelbourne Corridor, this property will enjoy full occupancy. Demand drivers include University of Victoria, Camosun, Luther Court Assisted Living, and Royal Jubilee Hospital.

Karim & Omar Lalani, directors of CEDAR HILL PROJECTS INC, currently hold the 47,083 sq.ft. RM-5 development site. Four parcels have been assembled:

1514 Cedar Hill Cross Rd acquired 7/11/2016 for $737,300
1520 Cedar Hill Cross Rd acquired 7/11/2016 $717,900
3811 Cedar Hill Rd acquired 7/11/2016 $797,700
3801 Cedar Hill Rd acquired 9/15/2003 $220,000.00

Total land acquisition cost: $2,472,900

Cost per buildable residential unit: $65,076 (maximum density for RM-5 zoning is 1 unit per 1,238 sqft of lot area)

The proposal includes:

  • three-storey 24 unit rental apartment building along Cedar Hill Road
  • two-storey 12 unit rental apartment building along Cedar Hill X Road
  • 21 off-street outdoor parking stalls
  • 7 on-street parking stalls
  • secure off-street parking in the 24 unit building
  • setback relaxations
  • 10% green open space

Aveda Institute leases space to marijuana dispensary Farmacy

A re-zoning application has been submitted to the City of Victoria for a Cannabis Retail Store at 1402 Douglas Street. The current owner, tenant, and operator is Paul De Costa Salon, doing business as the Aveda Institute Victoria.

An agreement is in place to lease a portion of Aveda’s current space to Farmacy, an established Cannabis retailer currently operating out of a retired bank building at 3055 Scott Street (Hillside & Shelbourne area).

The proposed downtown Farmacy location will have a 1,077 sqft retail storefront with a separate entrance off the busy Douglas street. Aveda will continue to operate in the remaining  ~1,600 sqft portion of the heritage building.

Because the premises are being subdivided from an existing larger space, a separate front door is being installed. Paul and Roxanna De Costa have applied for a Delegated Heritage Alteration Permit to restore an original entrance fronting Douglas Street. An elevation of the proposed alteration, as well as a photograph of the existing facade are shown below.

The application is expected to go to city council by March or April 2017. City Council will use its discretion to determine if they will relax the 200 metre buffer requirements. A competing dispensary, Weeds, is operating at 1601 Douglas Street, which is only 150 metres away.

Victoria City Council has not given any approvals or rejections to any dispensary that has taken the liberty to go through the $7,500 re-zoning process. Unlike the City of Vancouver who has over 20 approved applicants, and many rejected applications that are being appealed.

Weeds submitted their application on Jan 17, 2017. Farmacy submitted their application Jan 13, 2017. It is unclear if the Farmacy application will set priority. City of Victoria has advised me these are not being treated on a first come first serve basis, but will be up to Council to assess the merits of each applicant.

A full list of submitted Cannabis Retailer applications can be found here. For more information on Victoria or Vancouver marijuana retail requirements and processes, contact Dustin Miller.

Harbour Towers hotel to add rental housing to James Bay

Rezoning Application to convert Harbour Tower Hotel into 100% rental housing in Victoria’s Core

An application has been submitted to convert 189 Hotel Rooms into 219 residential rental units at the Harbour Towers hotel in the community of James Bay in Victoria BC.

The new owners are proposing to use the ~ 40,000 sqft property as a purpose built rental building with an FSR of 4.16. The property was divested by a Victoria based pension fund manager in August 2015 for $23,000,000 to Realstar Group of Toronto.  The asset no longer appears on bcIMC’s investment inventory list for March 31, 2016. Silverbirch Hotels managed the hospitality asset for the pension fund ownership group. In 2015 the pension fund trimmed its Delta hospitality portfolio to Marriott Hotels due to the compressed CAP rate environment for Canadian hospitality assets. The Delta hotels were a higher risk asset class in the real estate portfolio, with significant capex requirements and volatile RevPAR performance. This property has changed hands a few times. Previous owners include CHIP REIT.

The rental suite sizes will range from 279 sqft up to 1,200 sqft.

Rental Suite Mix:

Studio 68
One Bedroom 102
One Bedroom +  Den 10
Two Bed 24
Penthouse 15

This is a growing trend in the Greater Victoria area. Hotels will continue to convert to multi-family residential in the downtown core and the T-zoned Hotels and Motels in the Burnside Gorge area. 

About 800 hotel rooms have gone offline in Victoria over the past 10 years. This is a reflection of strong rental market demand in the city of Victoria. The latest vacancy rate in the core was 0.5%, even more compressed than Vancouver’s west end neighbourhood which clocked in at 0.6%.

Dustin Miller has access to a variety of exclusive hotel listings across Vancouver Island and the lower mainland. Contact him for more information.