Urban Condo Market Squeezed Again This Week

Just a single new listing arrived to market this past week and three closed further squeezing the market for urban city condos. Prices however seem to be holding steady with buyers refusing to bite on overpriced units. HOA dues can be a deciding factor as in some case they are a third of the cost of ownership. That can keep prices in check even when demand outstrips supply.

Parkview Tower now has 2 bedroom units with HOA dues over $600 a month and that impact the viability of ownership for many. That building is ideally located overlooking Esther Short Park and the units in the building are well priced in general, but $600 is equivalent to a $130,000 mortgage. So a $350,000 unit will have a payment that feels like a $480,000 payment went he HOA is factored in. Buyers must qualify for the payment on a $480,000 mortgage to buy a $350,000 unit in this scenario. The bank wants to make sure the HOA fee is not a burden on the borrower.

Buyers need to be aware of these lending guidelines whenever looking at any community with an HOA but especially in high maintenance situations like mid-rise and high-rise developments.

Last week the second of the two large top floor units in The Kirkland Tower wen under contract. This was the north facing unit listed on the MLS for $3.33 million. The riverfront unit next door reportedly went under contract for $4.5-$5 million having never been listed on the MLS. With the big units in contract Kirkland is poised for a fast sellout and that bodes well for the waterfront and for future high-rise developments attracting investors, perhaps next on Block 16.

Local residential projects continue to rise up around the Waterfront and Downtown. Hurly has broken ground on their ambitious apartments that will cover three quarters of the block bounded by Columbia, Washington, 16th, and 17th. Ambitious because they will be built over the top of an existing commercial building. The other 1/4 block is occupied by an under construction and topped out mixed use project with 3 floors.

Ginn Group is in the final stretch with their 4 story 50 unit project on 15th Street. Meanwhile the Jefferson Street affordable housing project on Jefferson is nearly complete.

The Aegis at the Academy, Phase One has four of six floors erected on the north tower and three of five on the south tower. That project will add 140 apartment units and breathe life into the area around the Academy and Library to support local restaurants and breweries. Trusty Brewing should be a major beneficiary to the arrival of residents in this project. In fact you can now seeing the towers peeking out above the building across the street from inside Trusty. Phase Two of that project is a three building 6 floors each proposal under government review now.

Down on 4th and Washington, it’s still crickets on Hurley’s proposed full block 6 story apartment building set to feature 180 units. The CCRA gave their blessing earlier this year. I expect to see activity on that sometime in the first half of 2022. Meanwhile up on Block Ten, Holland Partner Group is wrapping those building up like a Christmas gift and should move into the interior finishing shortly after the New Year. That project should be ready for the summer with 110 apartment units in the 7 story west tower and offices in the 6 story east tower.

On the Waterfront a bustling construction scene continues with The Columbia on Block 20 with 248 units, now open and leasing as well as kitty-corner on Block 17 Alliance has six of seven floor up in that 5 over 2 177 unit project. Just south of that I have seen some basic ground prep and survey work underway ahead of the groundbreaking for the 12 story 250 unit Springs Living project expected to start construction Q1-2022. Just a bit further east, The 12 story, Kirkland Tower and adjacent 8 story Indigo Hotel should open early 2022. Immediately north of Kirkland is the 8 story ‘Timberhouse’ on Block 3 which has now risen above street level and will have 227 apartment units.

Terminal One will see the AC Marriott Hotel open Q1 or Q2 2022. That 7 story project is coming along nicely, the tower crane supporting the project came down this month. I still expect to see ground breaking on the two tower mid-rise and high-rise office project on Blocks A and C early in 2022. A large portion of the space is already leased to the Vancouver Based and publicly traded Zoom Info. They are currently leasing space in the 805 Broadway Tower, currently, the tallest office building in Vancouver.

It is of great importance to consider the sheer number of high paying, family supporting trade jobs created by all this urban activity. Furthermore the city is doing a good job at keeping public space in mind as the density downtown increases. The mayor and council do deserve some kudos for that and often they don’t get their fair due.

CCRA reviewing even MORE big projects

Quite a bit of behind the scenes government development and permitting activity has happened over the last couple of weeks.

The CCRA is reviewing several projects including the Block 19 Waterfront apartment building proposed by Alliance Vancouver and Urbal Architecture which just happens to be the same tandem working on the 177 unit project next door on Block 17. Block 17 should top out just after the new year and complete late 2022.

The City Council chose LPC West as the ‘Master Developer’ for the new Waterfront Gateway district that will likely have some other name attached to it later. LPC West was one of five finalists including two prominent local firms Hurley Development and Holland Partner Group. According to local news accounts there were 28 developers interested in the project prior to paring them down to the 5.

Revised Plans for LPC West Terminal One

LPC west is also building the two high rise buildings to the immediate south at Terminal One on Blocks A and C. They proposed a pedestrian over crossing to connect Terminal One and the Waterfront to the New Waterfront Gateway district as part of their Terminal One proposal. The CCRA and LPC West will meet later this year or early next to hammer out proposals for the master planned urban community.

These master planned projects can take a fair bit of time measured in years rather than months as witnessed by the Waterfront and Terminal One projects. By my count however, the Waterfront took much longer to get started than did the Terminal One project that was proposed after it. The city and the CCRA are now getting into a rhythm of sorts about getting these large neighborhood sized urban developments going and I suspect we could see projects break ground even faster for this new development than we did with Terminal One. For one thing, most of the infrastructure is already in for the Gateway. The master plan for Terminal One was approved by the city in 2017 and the first project, AC Marriott Hotel broke ground just 2 years later and should complete early next year.

I am seeing some ground prep work on Block 18 which will house The Springs Living 12 story 250 unit senior living development expected to break ground in Q1 2022.

Over on Block 3 just north of the Indigo Hotel and Kirkland Tower, the Timberhouse project has risen above the street level after filling a 30 foot deep hole with foundation pilings and a parking garage. That 227 unit building will likely complete in Q2 2023.

Downtown one can see the two building Aegis Phase One rising up on two blocks of C street just north of the Library. These two mid rise towers should top out in the next month or two and will contain 140 apartment units with some retail and public space. That project should complete by Q4 2022. The City Council and CCRA are already in the process of approving the Phase Two with three 6 story structures featuring 200 units of residential and a parking garage.

Holland Partner Group, Block Ten

Holland Partner Group is in the late construction stages on their Block Ten two tower project. The 4 over 2 office Tower is now just about fully clad and glassed in and the 5 over 2 apartment tower is right on its heels. That project should complete sometime mid 2022.

I have not seen any activity on the property for the proposed Hurley Apartments at 400 Washington Street just east of the Convention Center. This 6 story full block development is proposed for 180 apartment units and was green lit by the CCRA earlier this year. Hurley mentioned at some point in a news article they would have to wait for the tenant in the soon to be demolished existing building to vacate which was supposed to happen in the fall of this year. Activity may perk up soon if that is the case.

I did notice that Unit 1100 in the Kirkland Tower went pending recently at $3.3 million. The success of the Kirkland Tower is a bit of a bellwether for the Waterfront at large. So far they have sold at least 50% of the units, possibly more and the Tower will be complete in the next month or two. This is good news and hopefully this success will get investors on board for Gramor’s Block 16 proposal of a 14 story 80 unit condo tower.

Things are looking good in Vancouver’s urban core.

New Activity at Tidewater and Others

It has been awhile since a new listing arrive at Tidewater Cove, but a 3000+ SF unit in the neighborhood came online last week. The unit is priced just shy of $2,000,000. Tidewater condos have had no trouble selling in this tight condo market. I still believe some of the previous activity may have seller’s looking to transition to the new Kirkland Tower, but that remains to be proven.

Two units went pending in Parkview which is still the value leader in mid-rise condos. A couple of new listings popped up in Northwynd that were matched with a couple of pending sales in that neighborhood. Now that I mentioned Northwynd, the townhouse development going in on the vacant piece in the southwest corner has the infrastructure in but little else seems to be happening. I’ll sniff around and see if it is just supply chain hassles or if there is other trouble.

The plumbing issue at the Village has been handled by the HOA is a decree that all homeowners should replace the aging system in their own units independently by 2026. Rather than issue an expensive assessment and have the whole building under repair at once the decree gives flexibility to the homeowners. The HOA will fix the issues in the common areas themselves and no assessment is needed at this time.

New restaurants, wineries, and breweries are have been announced recently and are part of a continued urban renewal in Vancouver that is the envy of the whole region right now.

Kirkland Will Submit Waterfront East to City This Month

The proposal to redevelop the roughly 2.5 acre site that currently has two restaurant buildings and a dilapidated boardwalk will face its first direct review from the city officials not he 18th of this month. The initial designs for replacing the boardwalk and connecting it to the existing renaissance trail has already passed that first hurdle. As of now only one of the two restaurants is operating. Who Song and Larry’s Mexican restaurant does a good business with an outdoor patio onlooking the river and a spacious interior suitable for dining, and events. Joe’s Crab Shack didn’t survive the pandemic and that building lies empty.

Kirkland intends to raze the two buildings and build two new structures to replace them as well as an 8 story residential tower behind them. The plans look good and will definitely make the ‘entrance’ to Vancouver look a little better than it does now.

The global slowdown in the supply chain and other issues plaguing the country do not seem to be deterring developers from projects in Vancouver. This town is on fire with robust development underway and no shortage of new proposals. It is good for the local economy and good for the city long terms as quality projects tend to bring in excellent tax revenue projections that will allow the city to plan on tackling important issues in infrastructure and public safety that are needed to maintain a great quality of life for our residents.

Condo activity in the urban areas was again somewhat flat. A few new listings were matched with a few new pending sales. Shorewood seems to be hot right now and Parkview seems to be a little slower. Overall Vancouver is leading the charge for the whole metro area with high demand for apartments, condos and single family homes that is outstripping supply and keeping prices high. As we enter the traditional winter slowdown, things seem to be slowing only seasonally at this point. We shall see what the MLS figures for November,ber look like in mid-December.

In other downtown news, the waterfront will get yet another brewery / restaurant. Portland based Ruse Brewing will open a Pizza Brewery business next to The Yard Milkshake bar in the Murdock Building facing the park and river. You can’t have too many breweries, really it’s all good šŸ™‚

Supply Shortages and a Tight Labor Market Continue to Plague Large Projects

Nearly every American has become acutely aware of the supply shortages across the entire market. Just about everything is hard to find right now including skilled labor. This has been a plague on some of the larger projects going up in the Downtown and Waterfront areas. Kirkland Tower and the Indigo Hotel project are already well past the original expected opening and the second, third, and fourth revisions to that opening. Those are now both looking at Q1-2022 openings. It is not the fault of the developers in most of these cases.

What is both interesting and exciting is that developers are still lining up at City Hall for permits on large and tall projects. This is an optimistic viewpoint from local developers that bodes well for the future of Downtown and the overall urban core.

Another 248 apartment units came online recently on Block 20. The Columbia at the Waterfront features upscale apartments right on the water in a 7 story full block development. Two other projects with 177 and 227 units respectively are also underway at the Waterfront. Downtown is seeing the Aegis Phase 1, a two building mid-rise project, go up adding another 140 units to the tally Downtown. The Holland Partner Group has their new HQ office building nearly complete and along side it is a 7 story 110 unit apartment building.

The biggest thing really hurting the real estate development industry has to be skilled labor. The supply shortages will work themselves out as COVID-19 winds down and factories and shipping gets back up to speed. Skilled labor has been an issue for decades now. Too many students leave high school to go to college often finding that they would have made more money in skilled trades and NOT be strapped with a 100 grand in debt. But none-the-less we continue to struggle finding skilled people to help build our cities and infrastructure.

Tomorrow is Election Day, be sure to fill out your ballots and get them in by 8pm. In Vancouver there is a Mayoral race that is important to the future of the city.

A bit of a seasonal slowdown in activity

Activity is a little light in the urban condo market right now. But the lack of activity is evenly distributed among inventory, pending sales, and closed sales. Inventory remains about the same as it has been for the entire year. There was only two new listings this past week and about as many more went pending so things are just following the status quo as we roll into the cooler and wetter season.

Overall Vancouver is still on quite a roll with developers and land owners. I mentioned last week, two new infill urban mid-rise projects were submitted for review and several other projects are moving through the permitting process. We should have groundbreaking on three large projects in Q1 next year. There is a high percentage of residential units going in and that aligns with the city goal of have 3300 residential units on the Waterfront and 15,000 residents in the Esther Short neighborhood. Currently the Waterfront is 1/6th the way tot he envisioned goal with enough units in the pipeline to be nearly halfway by 2025.

The Waterfront currently looks like this on the progress to 3300 units:

Waterfront Housing Units
BuiltUnder ConstructionProposals Under Review
523404430
Downtown & Mid Town Housing Units (South of McLoughlin)
BuiltUnder ConstructionProposals Under Review
2285428417
Data based on proposals submitted to and/or approved but he city. Projects under review subject to change Existing units downtown is estimated and may not include units in converted houses, or all of the single family homes in Midtown

I would certainly like to see more condominium projects, in particular those that can compete with Heritage Place and Parkview for the working class buyers. condos are a risky ticket for investors so this among other things, is why we tend to see rental units in large numbers and middle income condos are in short supply, the luxury condo market allows for high-rise construction but that market is largely dependent on having enough affluent buyers for a specific neighborhood. Kirkland Tower is a true barometer for the Waterfront. We shall just have to see how that building plays out in sales. It is rumored that 40% of the units are already in contract. That is very good considering the seven figure pricing on the bulk of those homes.

More High Density Infill and Another Viewpoint Op

Recent pre-application proposals have appeared on the City agenda for high-density infill development Downtown. I like this type of project as it maximizes land use in the urban core. The latest two projects are both fairly close to each other but appear to be different developers.

  1. Regan Mixed-Use is a 5 story building proposed for a 4000 SF lot that currently features a house converted to offices for a Bond Agency. This is an ideal use of available land and fits in with our growing urban core. the pre-app suggests 12 residential units over office.
  2. 9th & Daniels Mixed-Use is a 7 story urban infill proposed for either a single 4025 SF lot or two adjacent lots totaling 8247 SF. In either case another example of vertical integration of available space. This is labeled as mixed use and I would bet that residential is part of that mix. Perhaps some retail and or commercial office as well.

I have posted a map of the Esther Short neighborhood that comprises the Downtown and Waterfront areas color coded to show projects in their various phases including potential development spots. The 9th and Daniels project listed above is located on one of those “potential” development lots. These smaller projects will add density to the core that brings jobs and residents to boost the urban economy as well as enhance the city vibe.

Vancouvercenter 3 with Viewpoint on floors 8-11

It has been more than three years since I saw two listings active at the same time in Viewpoint. Downtown’s tallest condo tower offers four floors of condos over seven floors of offices. A stylishly remodeled unit was listed over the summer at $969,900 on the 8th floor but the ‘South Florida’ theme inside may not be exciting the local buyers as that unit remains for sale. Meanwhile last week, a competitor arrived on the 10th floor with a better SW view. This one looks to be well cared for but mostly original. The price is right being listed at just $870,000. Both units have two bedrooms but the more expensive unit has an extra 1/2 bath and 200 more SF. The only high-rise alternative in Vancouver for condos is the newly minted Kirkland Tower on the Waterfront. But units above the 7th floor are larger and much more expensive than these two Viewpoint units. That said, Kirkland Tower is the premier Downtown address and as such will command much larger prices. Viewpoint is a great opportunity to experience high rise living in a building that was once the talk of the town. All of the other condominium buildings in the city center are in shorter mid-rise towers with 4-7 floors.

Positive progress continues to advance Vancouver’s status into a satellite city for the region as opposed to a bedroom suburb of Portland. Vancouver is a strong competitor to Portland for urban residential development, office jobs, and manufacturing. No other city outside of Portland in the entire metro area can deliver a Downtown urban opportunity like Vancouver, USA.

Vancouver Condos: South Facing Makes a Difference

One of the biggest problems in housing across the Pacific Northwest is having abundant levels of natural light. Winters are long and dark around here and condo units, particularly in tall structures face a dilemma of gathering natural light. Many of the more urban designs feature floor to ceiling windows to allow extra light to penetrate the living space. This is a good thing of course, but in an urban setting, north facing units still have the trouble of being a bit dark because the shadows of other tall structures makes the natural light on the Northside, cool and dark, rather than light and bright.

When adding in the issue of a darkly finished unit the north facing can be a real difficult animal to present. All else being equal a south facing unit will likely fetch 5-10% more money in a mid-rise or high-rise development. North facing units should have light tones inside to help maximize the natural light coming in. It will make a difference at sale time. South facing units with abundant natural light offer the owners a more full palette of tones, particularly if the unit has lots of glass.

I recently sold a unit in Columbia Shores that was not quite as nice as some other units in the building but its south facing lovely natural light won it over the competitors on the “dark side.”

Light activity on the resale condo market this past week with inventory levels remaining flat over the last several months and most developments seeing a stronger seller’s market.

The tower crane supporting the AC Marriott Hotel project at Terminal one was removed last week, serving notice that the $50 million project is entering the final stretch of construction. That leaves the Downtown area with only three active tower cranes serving the 7 story, Broadstone Claro on Block 17 at the Waterfront, The 8 story ‘Timberhouse’ on Block 3 on the Waterfront, and the 2 building Aegis Phase One at the Academy.

A new urban infill project will be presented Thursday at a pre-app meeting. This will replace the house that has been serving as office space at 612 West Evergreen Blvd, with a modern 5 story mid-rise mixed use building. I am unsure if the “mix” includes residential units. I’ll have to keep you posted on that.

Downtown Vancouver continues to push ever forward on its way to becoming the region’s best urban experience.

Market Rumor Update and Other News

That new market rumor I heard may turn out to be a different kind of market than I thought. I read an article about a ‘retail market’ called Pop Local planning to open at the waterfront and this may have been the source of the rumors of a grocery market. Pop Local is not a grocer but rather an artisan market. That itself is cool but it is not a traditional ‘market’ as the rumors were suggesting. That declared, it is certainly possible some other grocer is planning a grocery outlet of sorts somewhere on the waterfront or nearby. I think the ideal spot would actually be somewhere in the new Waterfront Gateway District the city is actively working on now. A grocer like Whole Foods or even a Neighborhood Walmart Market with say 15000 to 25,000 square feet at the ground level in one of the new buildings that ultimately gets built in the new district. The thing about the Walmart idea is that a discount or mainstream grocer makes sense in the space New Seasons is building and a high end grocer makes more sense closer to the Park or Waterfront as that is where the most expensive housing is. It’s weird how things play out sometimes. That ultimate build-out at at the Waterfront may be 3-5 years out, but by then the Waterfront should have a bustling population to make the second market more financially viable. I still can’t wrap my head around the notion that Gramor, an experienced shopping center developer, could not get New Seasons or Whole Foods to occupy the ground space at their proposed Block Ten development two years ago. Block Ten is a BETTER location for a high end market than 1600 Washington where New Seasons is building their ‘Downtown’ store. But in the end Gramor couldn’t ink the deal and Holland ended up with their project going in.

In other news…

Block 19 has a suitor willing to build a 180 unit apartment building. It seems that the same developer building the Broadstone Claro next door on Block 17 is already interested in expanding their Waterfront holdings. That is positive news indeed. The pre-app submission shows a minimum type density with 5 floors of apartments over a 1 or 2 story concrete base of parking.

I find it interesting that the four Blocks to the far west, 18,19,20,21 have the highest FAA allowed building heights and were originally intended for taller structures are not getting structures taller than Kirkland Tower. The original concept design for the Waterfront showed taller 14-18 story buildings on Blocks 16,17,18,19,20, and 21. Block 18 is the only block of the western four to get a high-rise project. That’s the Springs which should break ground Q1, 2022. Block 20 is nearly complete with a 7 story apartment tower. Block 17 turned out to be a minimum density project of effectively 7 floors, two levels of parking and 5 floors of apartments. Block 19 based on the pre-app is likely going to be a minimum density project at 6 possibly 7 floors. No word on Block 21 which was briefly labeled as “in contract” but later returned to “available” status.

I do hope Gramor tries to stick with the original plan of taller projects in the western blocks. Other than the will fated CLT ‘Trestle’ project at 16 stories on Block 14, no-one has expressed interest in the Block 11,13,14 clump which can also support taller projects. Those however are in the Phase 3 plan.

Gramor also still has plans to erect a 14 story condo tower on Block 16 which as shown fits beneath the FAA maximum height limit of 148 feet. Still no word on that project and in fact it seems Gramor is tight lipped on any condo development other than Kirkland Tower. It is certainly possible that Gramor wants to give Kirkland some breathing room to get those high end condos sold before announcing a competing project. I don’t think the Block 16 project is going to compete with Kirkland Tower. That is a spectacular building and the only true ‘lifestyle hotel-condo’ project in the entire metro area. As I mentioned in a previous article, Portland’s Ritz Carlton will be a competitor when it completes presumably in 2023.

As I was reading older news reports to support this article I ran across a couple of reports in the Columbian regarding the failed Tesoro-Savage oil project at the Port of Vancouver. There was a bit of a grudge between Gramor and Tesoro-Savage each suggesting the other was a bad proposition. One article wrote about Tesoro Savage’s claim that the Waterfront Project was not viable. I think the two projects could have co-existed, but I find it hilarious just how WRONG Tesoro was about the viability of the Waterfront. I don’t think anyone can say it is anything less than a smashing success.

BTW take a peek at Dean Sorenson’s latest waterfront video from late August. I keep the latest video posted on the Waterfront Page.

Rumors of a Boutique Market

During the tour of Kirkland Tower I heard a rumor from a solid source that another market is headed to the urban core. If this turns out to be true, it will be excellent news for the city center which lacks for little but has no operating super market.

I was a bit surprised when New Seasons announced their intention to build a store in midtown at 15th and Washington. Although this is excellent news, it is surprising that they didn’t bite on an opportunity to build that store on Block Ten when Gramor was planning to build there. But this new potential market location is on the Waterfront. With thousands of units coming online Downtown there is definitely room for a market at the south end of the urban core.

The Waterfront currently has 270 leasable residential units with rather tight vacancy. Under construction now is another 652 apartments and 40 condos of which 298 units will be available for occupancy this year. There is already another 650 units working through the permitting process for the Waterfront alone, those units should arrive to market in 2023 and 2024.

Downtown and Uptown collectively have hundreds of units under construction or planned as well. These units along with the Waterfront and existing homes will provide a nice consumer base for both the New Seasons Market and a rumored boutique market. The build-out target of 3300 residential units on the Waterfront is still realistic and seems to be a reasonable projection right now based on the per block averages for completed, under construction, and proposed projects.

Overall the addition of the New Seasons market and this rumored market at the Waterfront should create Esther Short as a neighborhood walker’s paradise.