Quiet Week for Condos

Not much activity this week with just a few units showing activity and inventory pressure remains about the same. Meanwhile construction continues at a feverish pace with seven tower cranes supporting large urban projects in Vancouver, six of them Downtown and on the Waterfront.

This summer should produce even better retail and food service revenue as two more urban apartment projects are about done. Aegis Phase one, now called Aeon is open and leasing and Timberhouse, now called the Miller has 227 units that will be available before the Fourth of July. This will create even more peeps in the area to support the nice infrastructure of fine dining, wine tasting, and other retail establishments on the waterfront and all over greater Downtown.

For renters looking for a slightly less busy atmosphere the new Aeon should not disappoint. These are at the Academy site and are a few blocks off the busy corridors and bustling Esther Short Park area. Of course these are still a short walk to the Park so access is great, but C Street is pretty quiet after dark. There is a rooftop patio area that the developer claims offers a 360º view. Condos in this area are available at Academy Square, you can check those out here.

I added a new page to the “Urban Architecture” section called, “Lost Blocks” that pays homage to lower Main Street which was almost entirely lost to the Interstate 5 Project in the late 1950s. Check it out here.

Inventory Softens in Urban Condos

Quite a number of fresh new listings arrived in the past week fattening up the inventory as new listings outpaced pending and sold 3:1 in the local urban condo market. Things are still fairly tight but a fresh infusion of listings will certainly take some of the edge off this strong seller’s market. Take a look below at the current inventory levels in the popular developments this website follows:

DevelopmentAvailable UnitsTotal UnitsPrice Range $ – $$$$
Frontier Block at 500 Broadway022$$ – $$$
Academy Square136$
Heritage Place4137$$
Parkview at Vancouvercenter1118$ – $$
Viewpoint at Vancouvercenter233$$$
The Village at Columbia Shores3135$$ – $$$$
Shorewood5187$ – $$$
Tidewater Cove1148$$$-$$$$
Kirkland Tower9 new + 2 resale 40$$$$
Totals3110772.8% available

In a typical year the United States turns over about 7% of its owner occupied housing units. Vancouver’s urban condos are a bit tighter than that as we are on pace to turnover less than 7% in 2023. Currently 2.8% of the total inventory of urban condos in the table above are actively listed for sale. The condo market is solid in Vancouver USA.

I did notice that two units in Kirkland tower that closed last year are up for resale. One is owned by an investment company that I presume will either rent the unit or sell it whichever comes first, it is also listed for rent on some online rental sites. The other is a private residence and no telling what their situation is. Kirkland Tower remains the top dog among premium urban condos in Vancouver and frankly competes well in the broader market throughout the metro area.

In other news:

I haven’t heard much from Mill Creek Residential on their 15 story apartment building proposed for Block 21. Initial land use and design review is complete. The CCRA and the City Council all seemed positive about it during the early review process. The building will add between 270-300 residential units to the waterfront. I was thinking they would break ground this summer on that project. They may still yet, the block does not have any activity and is not being used to stage for either Block 19 or Block 18 which both have large projects underway. As always financing for these large projects is a concern and how much investment cash is in the pool can make or break these types of developments. Vancouver’s numbers for rental units still look very strong and I’d think investors would still be willing to lend on projects like this in an area with well below average vacancy rates on both commercial office and residential rentals.

Over at 400 Washington Street, Hurley Development is hammering away on their 6 story full block apartment building. 180 units are expected there. They are working on the wood frame portion which tends to rise up quickly. The same progress is happening on Block 19 with the 7 story Broadstone building. It’s almost like these two are in a race to complete first. Both are working on the wood frame floors above the concrete podium.

The Springs Living 12 story tower on Block 18 is about to overtake the 7 story Columbia next door in height. That project seems to be moving along well. They anticipate a 2024 opening. That’s a hell of a project there with the building footprint covering about 95% of the 1.3 acre site. It is rumored they will have a restaurant on the rooftop somewhere. I’m not sure if it will be open to the public but it will likely be private for the residents of the 285 units only.

The apartment building with more name changes than Elizabeth Taylor weddings is now pre-leasing units on Block 3. Now called The Miller this 8 story building has 227 units.

LPC West is busy raising up the ZoomInfo two building high-rise office project at Terminal One. They have almost half of the 10 and 9 stories up. That development is targeted for 2025 completion. ZoomInfo currently occupies at least one entire floor in the 805 Broadway building.

I have been following the apartment developments and it seems they are not having any trouble renting units out in any of the developments. Some of these units are rather expensive but people are lining up to get in. The Aegis Phase One is open and leasing now called Aeon. Marathon completed the final land purchase from the Academy and the demolition of the dilapidated laundry and smoke stack looks complete. There doesn’t seem to be any activity lately on the site for Phase Two. There could be some archeological work on the demo site holding things up. Generally when the land deal closes, developers are eager to start building since they can’t make much money with bare dirt.

Vancouver Has Seven Tower Cranes Up

Six of Vancouver’s seven cranes are visible in this image.

Tower crane number seven rose up last week to support the 8 story parking garage on Block 7, bringing the total crane count on the Waterfront to five. There is a sixth crane Downtown supporting the Hurley Development, Adera apartment project on Columbia Street at 4th. The seventh crane is on the east side at Columbia Palisades. I mentioned in a previous post that although unlikely, it is possible Vancouver could have more active cranes than our larger neighbor south of the River. Yes, looking at you Portland. According to the semi-annual RLB crane index which was published last month, Portland is down to 14 tower cranes operating in the city. That is way off the 30 plus cranes they had before the pandemic. At least two of those cranes will come down before any of Vancouver’s active cranes are removed. It is possible that Vancouver could add another three cranes this year and if all of them are up at once, we could indeed have more cranes than Portland since the trend in the Rose City is fewer cranes. I do not think the timing will happen for us to have ten cranes up at once nor do I expect Portland to lose five more cranes by year’s end. It is likely that Mill Creek Residential will start construction on Block 21 this summer and I’d image Marathon will start Phase two of Aegis at the Academy which will probably need two cranes, but there will be a large amount of ground prep for that project so it is possible but unlikely cranes will be up this year for that one. The mere fact that we are competing for larger urban scale projects with a Major city like Portland is very telling about the falling status in Rip City and the rising star that is Vancouver USA.

Portland’s business press has definitely noticed the falling crane count in that city. It seems they are putting frosting on a stale cake down there making excuses for the downturn in major projects. They mention high costs of construction and lack of workforce as reasons for the lackluster building. However that runs completely counter to both Clark County and Washington County which of course are directly adjacent to Portland and have record numbers of cranes up. We are all drawing from the same pool of workers. RLB announced in the April report that they had a record number of cranes reported in North America this go round, so the trend is not down nationally. Portland developers, news media, and pundits continue to avoid the elephant in the room; businesses do not want to be in Portland anymore. People are starting to leave as well. The city center has become a third world mess and the blame lies on local government. It will take Portland a long while to climb out of this hole. Frankly I’m not sure they will, because the politicians there simply don’t get it. Hopefully our politicians on this side of the River will look south and be smart enough to do the opposite of what Rose City officials did. But alas, politicians are not the sharpest knives in the drawer. We shall see how it goes.

Condo activity in the city center was about the same as it has been over the last several weeks with good activity at both ends of the inventory spectrum. Aegis Phase One is open and leasing, now called “Aeon” and it looks like units are quickly filling up. I noticed as well that Claro on Block 17 at the Waterfront is also filling up nicely. Demand for urban apartments in Vancouver seems to be steady and strong. The Miller on Block 3 at the Waterfront is due to open soon perhaps late June or early July. That was formally the “Timberhouse” project, it will feature 226 units in an 8 story mid-rise. They are pre-leasing now. So long as demand remains strong and residential vacancy continues to be tight, Downtown and the waterfront should see plenty of new projects over the coming years.

Will the next Recession hit Vancouver hard?

Most economic analysts are leaning strongly towards an upcoming recession. Last year we had two consecutive quarters with declining GDP which was technically a recession, but we quickly bounced back. Last quarter the government reported an anemic 1.1% GDP growth and talk of a recession swirls again in economic circles. National recessions tend to hit the whole country but inevitably there are areas that weather the storm much better. During the so called “Great Recession” that ran from roughly Q4-2008 to late 2010, Seattle faired rather well with housing taking a 10-15% hit on values whereas we saw declines approaching 40% locally. Some areas of the country had a genuine hard crash with real estate values plunging some 65%. It took all the way to late 2012 for most areas to see a recovery of real estate values.

Why was Seattle so well sheltered last time? Seattle’s local economy at the time was red hot and the region continued to produce jobs when many other regions were shedding jobs. Demand for housing in Seattle at that time was so red hot that even the Great Recession was only able to stifle it to a minor correction. But I do not think Seattle is safe this time. Seattle is seeing far less demand now than back then, and there is even a bit of an exodus as people look for more affordable options often right here in Vancouver.

Vancouver has a significant amount of housing pressure as our area is producing jobs, building housing at a faster pace than the Metro Area at large, and is a little more affordable than Portland which is seeing bit of a population decline. We all know what is driving the Portland issues so we won’t beat that to death today. Vancouver’s office market is also red hot as companies relocate here from afar and not so far, looking at you again, Portland 😉

I feel like Vancouver USA is in a very comfortable position, much like Seattle was 15 years ago. I do not expect another crisis as severe as that last one, but I do suspect a medium to large recession is looming. Vancouver will likely be one of those areas that beats the national average on severity and recovery this go round. We have a lot of the same mojo that Seattle was packing in 2008. What will be interesting to see is how our beleaguered neighbor south of the Columbia weathers the next storm, it could be bad for Rip City.

Condo activity in the city center was brisk last week with a balance of sales, closings, and new listings. Inventory levels are about the same, but activity is up and that is a good thing.

Activity is Brisk, Condo’s moving

Last week saw a boost to pending and closed sales with some new listings as well bringing the inventory to a slight tightening overall. Units are moving but sellers are finding that buyers are not really biting on overpriced listings. Units are moving in all price brackets as Kirkland Tower closed another unit as well as some entry level units in Parkview. People are flocking to Vancouver and that bodes well for the local urban condo market.

The City Council amended the agreement with LPC West for the master plan at Waterfront Gateway. It appears they got a brief extension to a deadline for the next phase of the process. No big deal. The latest estimates for any groundbreaking are 2025.

I would strongly recommend citizens of Vancouver pay close attention to the council. Often times government agencies can spend too much time pandering to special interest groups at the expense of delivering on the local promises of clean and safe streets, quality redevelopment, improved infrastructure and so on. Most of the meetings are recorded and there is public access. Pay attention because we have regular elections that are designed to ensure the people in authority are vetted and operating in our best interests. There are definitely some who have lost their way and should be shown the door in 2024. See what I did there 😉

The tower crane that will support the new 8 floor parking garage on Block 7 at the Waterfront will be up and operating in a week or two. I saw they have the base mounted in the ground and are pouring the concrete around it now. That will bring the total to seven tower cranes operating in Vancouver, six Downtown and one at Columbia Palisades. Parking garages can rise up pretty fast relative to other building types. Once that garage is complete the Waterfront can sell the remaining blocks for development that are currently being used as surface parking. As previously reported here, Block 11 is already under contract by Holland Partner Group to build a mixed use apartment building after the garage is complete.

No word on ground breaking for either Aegis Phase II for which the land transaction is already complete, or Block 21 Mill Creek Residential apartment tower at the Waterfront. On the latter the land transaction has not yet been completed. Both of these are large scale apartment projects.

In other news, The Columbian reported that a record number of vendors have signed up this year for the Farmers Market at Esther Short Park. That is good new, this market is one of the best in the region. It is already underway for the 2023 season.

Commercial Success is Important to our Local Urban Living

Downtown Vancouver is much more kin to Downtown Portland than say Downtown Beaverton. Vancouver as a city is much larger than any other city in the local region not named Portland. Vancouver’s Downtown has a strong mix of commercial office, retail, residential, and industrial real estate. That may seem an odd comparison considering Portland as an overall city is more than twice the size of Vancouver. Part of the local success of Vancouver’s emerging urban center is due to that complete package with a healthy mix of business real estate opportunities. Larger cities like Portland and Seattle have long offered retail, office, and residential in high density neighborhoods with excellent walk-bike lifestyle opportunities. But these two examples are much more dense than Vancouver and with that increased density comes some of the negatives of city living among these are: noise, heavy traffic both vehicle and pedestrian, and sometimes increased crime. Vancouver has significantly less of the city negatives with almost all of the city positives.

Many people choose to live in an urban downtown setting to enjoy a lifestyle that is largely independent of auto travel. Walking or biking to restaurants, pubs, shops, and in many cases work is a perk to urban living. Suburbia rarely if ever offers that convenience. To be fair, there are a whole set of different advantages to the suburban life for those that would trade one for the other.

ZoomInfo HQ under construction at Terminal One will have more than 360,000 SF of office, parking, and retail. Expected open in Q1 2025.

Vancouver has been on a noticeable boom the last 25 years with a momentary pause during the Great Recession 2009-2012. Right now the city has a lot of room to grow before it starts experiencing some of the ‘big city’ woes that have long plagued cities like Portland and Seattle. The beauty of Vancouver though, is that we will always play second fiddle in the regional picture to Portland and so they will continue to shoulder the burden of the big city woes whereas Vancouver just quietly grows into a great city with better traffic, lower crime, superior taxes, and an excellent alternative to Portland. Portland is experiencing shrinkage in their city center and their office vacancy rate was tickling the 30% mark for a bit. Meanwhile Downtown Vancouver sits at 5.8% office vacancy which is one of the highest performing office markets in the USA among larger cities.

You might ask, why does that matter to me I’m just living here. Well, it matters much more than you might think. There is a certain amount of people living or working inside of a one mile radius needed to support a restaurant, bar, retail shop or other commercial service. The more people living or working inside that one mile radius the more services that are supported. This is why there are so many different restaurant choices in Downtown Portland than other less dense neighborhoods in the city. Likewise the same is true in Downtown Vancouver versus other less dense neighborhoods here. Both Portland and Vancouver have a large number of residents living Downtown but also have a large number of workers commuting into the Downtown to work in the daytime. As Portland continues to shed workers downtown because businesses are leaving, they are shedding services due to less people in the area, and thus shedding residents who no longer feel the advantages outweigh the negatives Downtown. This has been a spiraling issue in the Rose City.

Right now Vancouver has about 6,000 people living in the Downtown (Esther Short). There are roughly twice as many jobs in the area including some 4000 at the adjacent Port of Vancouver. This is a healthy 2:1 ratio. Downtown Portland prior to the pandemic had somewhere in the area of a 5:1 ratio in favor of jobs over residents which was much stronger than Vancouver. Based on recent trends they are likely closer to 2:1 these days closer to par with us. Having more jobs than people helps support a more robust commercial sector bringing positive growth in the available services that ‘locals’ benefit from. People commute in, spend money at lunch and after work, then depart to their suburban home.

Lincoln Property West proposal for 12 story multi-tower apartment project on Block 2 at the Waterfront. Expected groundbreaking in Q4-23 or Q1-24.

Part of Vancouver’s recent success is that Portland is making international news for negative things these days rather than the positive news stories they were enjoying just 10 years ago. Vancouver is becoming a popular alternative because it now offers much of what Portland used to have and with a better upside in the form of lower taxes, lower crime, and better traffic. As Vancouver starts to bring in more employers to the city center many from Portland, we will see a strong uptick in services to support the increased density. Employers are already coming and Vancouver’s 5.8% office vacancy is a strong indicator that companies desperately want to locate here. Those companies moving in pay taxes that help generate cash for the city to make improvements as well as workers to support restaurants and other retail services that residents can take advantage of as well.

The diehard Portland fanboys will argue that Portland still has more of the good stuff than Vancouver. In fairness, by volume that is true. Whether it is true on a per capita basis is another argument. But one thing Portland has on Vancouver is entertainment venues. Portland’s city center has a lot of entertainment venues to see concerts, comedy, off-Broadway plays, and much more. For people that utilize these services more than twice a month, Vancouver will struggle to compete. But for people like me that attend these types of events on a less frequent schedule, we can make the short trip to Downtown Portland for those engagements. From Downtown Vancouver it is only 7 miles to the heart of Downtown Portland. In the evening when these types of events are generally held, traffic is not that big a concern. It’s ten minutes away. It also seems that the Max train is coming to Downtown Vancouver in the next few years as well, so you will be able maintain that car-free status when going to Portland in the near future.

Further complicating issues for the Rose City, Portland has allowed their city to become noticeably dirty, down right filthy if you care to look down at the street. Portland has become completely overrun with street campers that has led to unsanitary conditions and some of the worst litter I have ever seen in a city. Portland has also allowed their city to become one of the most violent places on the West Coast after spending decades as a city known for low rates of violent crime. Many retail stores and restaurants are leaving the city center due to these conditions. All of this negativity is outweighing the benefits of living there for many people who are leaving the city in large numbers. Many of them are headed to Vancouver USA.

When deciding to buy a condominium in Vancouver you can see that the energy in the regional market is clearly here and that bodes well for future appreciation on local condo units. Right now there are no new condominium projects underway in the city center. There are lots of apartment buildings ranging from entry level to high end under construction right now. Many of these renters will decide to stay permanently and they will apply pressure to the market for local condos. On the commercial side of the equation: Vancouver has a double high rise office project under construction now at Terminal One and another high rise office project proposed for Block 1 at the waterfront. Demand is high and that will bring some more of the that daytime city buzz to a previously sleepy daytime Downtown.

At the current pace I estimate by 2030 Downtown Vancouver will have 12,000 residents and 18,000 jobs. That seems like aggressive growth but in 2010 the Esther Short Neighborhood had 2900 residents and today it is up above 6000. Thousands of new housing units are under construction or in the pipeline now. Meanwhile Downtown Portland has been trending down towards 22,000 residents and 30,000 jobs. During the height of the pandemic and riots, Portland had fewer jobs downtown than Vancouver did! Sound weird? Portland had over 100,000 jobs Downtown in 2019 pre-pandemic with roughly 24,000 residents living in the Downtown area including the Pearl and Old Town. It was reported in mid-2020 that only 11,000 people were working in Downtown Portland. They have still not recovered from the nightmare that was 2020 in that city. If Portland can turn things around I’d say by 2030 they will be at 26,000 residents and back up to at least 50,000 jobs Downtown.

Downtown Portland including the Pearl and Old Town is roughly 900 acres lying west of the Willamette River and east of I-405. Downtown Vancouver is about 375 acres by comparison lying west of I-5, north of the Columbia River, east of the BNSF northbound railway, and South of Mill Plain Blvd. It is a bit surprising to see that Vancouver’s numbers are this close, despite the larger and much more densely built up nature of Portland’s Downtown. Portland does have a university campus Downtown with a lot of buildings, I do not know if the local population figures include full time on campus students, I doubt it. All the recent trends have led us to this point, Vancouver is on the upswing, Portland is trending down. I think Portland will turn things around at some point, I just don’t know when. That city has one of the most convoluted administrative structures you’ll find in a municipal government anywhere, so I’m not holding my breath on a speedy recovery down south of the Columbia.

Trends are favorable in Vancouver and that is why you see so many tower cranes up and operating, building office space and new apartments to house the thousands of people and numerous businesses flocking to our city. So long as the local elected officials don’t step in it, this positive trend should continue.

Listing Activity is up.

This past week saw a rare uptick in inventory levels with more units listed than pending or sold. Inventory remains tight, but buyers just got a nudge in their direction. I saw a couple units come up that are well priced in the market which is nice for buyers. A solid little 7th floor 1 bed unit in Parkview is available under $240k and a lovely 2 bed 9th floor corner unit in Viewpoint just arrived to market bearing a favorable price just over $800k. In other related condo news, it looks like Kirkland Tower is down to the final ten units. They have something in every price range still available from a sub $1 million small unit to the largest $4+ million units on the 11th floor. I certainly can’t speak for the Kirkland company, but I’d say that project is a success.

Our stingy wet weather doesn’t want to give us a break and that sometimes keeps the opening spring salvo of listings at bay. That could bear fruit for sellers as a rush to market of too many listings can crowd the market at a time where buyers are not as numerous. What’s keeping this market so tight is not a surplus of buyers but rather a massive deficit of sellers. I believe many potential sellers are clinging to that super low $2.5-3.5% mortgage. That will change because in the grand scheme of things rates right now are NOT high, they are pretty darn average and eventually people want or need to move, rates be damned. We all just got spoiled over the last decade of artificially suppressed rates and normality has returned.

The federal government continues to make bad economic moves and that can lead to softening conditions in the market. This lack of sellers isn’t great for us Realtors® but it might be helping us avoid a stronger downturn. Hopefully the fed will relax a bit, the Fed has had a tendency to overcorrect, lets see how they do.

I’ve become a bit of a regular at the Witness Tree Lounge at the Indigo Hotel. Its a small place with a nice atmosphere and a bit of a lates 70s vibe. Its 8th floor perch over the river offers nice views from inside or out on the patio. Later this spring they will open the 9th floor ‘roof top’ patio and I look forward to that. I’m racking up points on my Reveler’s Club account. I’ll be using those at El Gaucho soon 😉 My wife has become rather fond of 13 Coins, also in the Hotel Indigo. The Waterfront and Downtown Vancouver has finally become a dining destination. It took a few decades to shake off that 1990s bad reputation, but damn, things look good these days. I just hope our city leaders realize the old adage is true; It only takes a moment to lose your good reputation but it takes decades to earn it back. How long will it take Portland to earn its reputation back after the last five years of disastrous bad decisions by that leadership group down there? Pay attention City Council and Mayor and don’t follow those idiots.

That’s the local beat this week.

Community Spotlight: Tidewater Cove

Tidewater Cove has been Vancouver’s premier luxury condo community since its inception in the mid 2000’s. It remains a top spot for luxury living offering an active lifestyle of urban hiking, tennis, swimming, boating and more all within the gated campus style community. These condos are arranged in a series of three story buildings forming a bit of a crescent shape with commanding views of the Columbia River and even the Cascades. The community has a marina with slips available for your boat or yacht. There is a restaurant that overlooks the marina accessible from within the the community but also open to the public.

Tidewater Cove is located about two miles east of Vancouver’s Downtown and Waterfront. Access to the area is easy but not well marked which adds to the already impressive security profile of the community. Until Kirkland Tower came along these units were the largest and most expensive in the area.

The largest units in the complex are well over 4000 SF and even the “small” units are over 1000 SF. This community is self contained but lacks the walkable access to urban amenities. You will likely need a car if you live here. You will however enjoy a less busy community that offers ample opportunity for sports and leisure without leaving the compound.

Tidewater will remain a premier spot for easy, low maintenance living in spectacular luxury. Although Vancouver has other competitors now in this price range, Tidewater still has unique qualities including its private waterfront location and its large units with mansion-like floor space.

Units in Tidewater are rarely under $1 million and the big units with 4000+ SF can approach $4 million when they come available. There are currently two active units with 1623 SF and 2356 SF at $1.16 M and 1.299 M respectively. Units have been selling well in the community over the last few years.

Some units have views of the riverno-cons
Units have deeded garage spaceno-cons
Vast array of amenitiesLess convenient to urban activities and attractions than condos
Less crowded area than DowntownAirport noise well above average
Adequate guest parking on siteno-cons
Reasonably quiet neighborhoodA little disconnected from Downtown and Columbia Shores
Units are larger than most of its peersUnits are sometimes cosmetically dated
Surrounding neighborhood is high end SFHno-cons

So that’s the Cliffs Notes for Tidewater Cove. Meanwhile last week saw some new listings come to market and a few pending and closed units kept things pretty neutral on inventory.

In other news:

published in The Columbian

There was an article published in the Portland Business Journal suggesting that Holland Partner Group was going to build the shorter tower on Block 11. That is 8 floors instead of 12. I have not heard that from local officials but it would not surprise me as Holland has already chosen the smaller, shorter, cheaper path with two other urban projects in Vancouver over the last few years. They are more than capable of building high-rise projects, they seem to be less bullish on Downtown Vancouver than other developers. I think the 12 story option is a nice juxtaposition on the skyline to the 12 story Springs Living project already under construction on Block 18. Both the City and the CCRA have expressed a desire to see taller projects, especially on the western half of the neighborhood where FAA height restrictions are less agressive.

The 8 story option will have about 220 units rather than 348 units in the taller building. The construction cost will be substantially lower on the shorter tower as it will open up the option to do wood frame over a podium rather than an expensive all type one building. However the revenue will be substantially lower with nearly 40% fewer units.

The Ritz-Carlton is nearly complete

Drone shot provided by The Ritz-Carlton

The Rose City is about to get a much needed boost to its sagging reputation of late. The Ritz-Carlton Hotel and Residences is nearing completion. The beleaguered city could use all the help it can get. It is most interesting that The Ritz-Carlton chose Portland over the larger, sexier, and richer Seattle for the only location in Pacific Northwest. The next nearest Ritz-Carlton is in San Francisco. The hotel is expected to open in mid July this summer. The residences should begin closing shortly thereafter with phased closings continuing through the end of next year according to the representative for the project.

I attended the broker event for this project last week, and found the property to be quite special. The closest competitor for it is actually here in Vancouver at Kirkland Tower. The similarities are striking. Both properties are private condominiums attached to a hotel. These towers are NOT condotels, that is a different business model altogether. These are private luxury homes that have the benefit of the amenities in the hotel, along with exclusive amenities not available to hotel guests. The private residences have a separate entrance, private elevators used exclusively by residents and completely detached from the Hotel, just like Kirkland Tower in Vancouver. The Ritz-Carlton Residences however are on a larger scale than Kirkland. They have 132 condominiums of which the developer claims more than 30 are sold. This compares to just 40 residences at Kirkland with 11 remaining. The representative also stated that the building itself is the fourth tallest in Downtown Portland, Kirkland Tower just happens to be the fourth tallest in Downtown Vancouver. The Ritz-Carlton is much taller than Kirkland standing 35 stories tall and 460 feet in height. Kirkland is diminutive in comparison with just 13 floors and 146 feet in height. But it is all relative, as Kirkland stands taller than all but three buildings as does The Ritz-Carlton in their respective Downtown areas. So the views from the top floor of either building relative to their surroundings are similar. Kirkland soars above the nearby structures as does The Ritz-Carlton.

So why is a website called “urban living in the couv” talking about a project in Portland? Like Kirkland Tower this is a very special project that will have lasting effects on the community. This new project in Portland will have effects to a lesser extent even here in Vancouver. This property is a proper competitor to Kirkland and I feel that both have much to offer. The Ritz-Carlton has a few advantages over Kirkland Tower. The first is that the residences are in the same building and are at the top of the structure. So even the lower floor units tower over the nearby buildings which are all between 8-15 floors. The residences are on floors 21-35. Below that floor are the hotel rooms and the amenities for both guests and owners, as well as some office space. The owners have their own private lounge and some other amenities exclusive to owners. The building does feature several restaurants including space on 9th street for seven award winning Portland Food Truck operators. That was a nod to the food truck operators that used to be located on that very block. Kirkland is attached to a separate hotel building which is an advantage and a disadvantage. The latter being that some of Kirkland’s condo units are on lower floors. Those on floors 8 and below that are not facing the river will not have great views. It seems that all the units in the Ritz-Carlton have sweeping views of the city. Of course we can’t fail to remind everyone that Kirkland is a waterfront property where as The Ritz-Carlton is in fact on a standard city block surrounded on all four sides by other buildings. It is not a convenient walk to the Willamette River waterfront for the future residents of The Ritz-Carlton.

Interior render provided by The Ritz-Carlton

I saw fully built models of the kitchen, bathrooms and some living area. The materials are on par with what I have seen at Kirkland. I have a complete package with hundreds of pages and photos for The Ritz-Carlton outlining just about everything you need to know about the project. Prices are a little higher than Kirkland on a per-foot basis and the HOA is a bit steeper as well. But the amenities in the project are a touch better than Kirkland. There is a 1 bedroom unit listed at $1.265 million that has more than 1100 SF on the 26th floor but I believe that one may be pending by the time this publishes. The next unit listed is a similar unit with a more premium view at $1.55 million.

The entry point for this project is similar to Kirkland Tower as most of Kirkland’s view units exceeded $1.3 million and all of the units in The Ritz-Carlton are view units. It should be noted that when view is removed Kirkland has a much lower cost entry with small lower floor units under $1 million. There is however a higher ceiling in this new project with top floor units priced in the $9 million range. The most expensive unit at Kirkland is expected to fetch about $5 million. Interested parties for either development can contact Rod Sager at urbancondos@rodsager.com for more information.

This project does impact Vancouver in the sense that it represents a genuine competitor for the Kirkland Tower which was the first development of this kind in the entire region. Since Kirkland still has units to sell, this could have an impact as now buyers in the ultra-luxury market have a choice between two somewhat similar opportunities. I believe that Kirkland is a better choice for a primary residence, unless the buyer needs to be close to Downtown Portland for business, or other reasons. The Vancouver Waterfront is a vastly superior neighborhood when compared to Washington and SW 9th in Portland. However there are people that prefer the more dense and busy nature of Portland versus the somewhat more quiet nature of Downtown Vancouver. Kirkland is a bit of a bet on the future where as The Ritz-Carlton is a known quantity so-to-speak.

When the Waterfront is built out, and at this point all indicators are that we are five years out on that, it will be one of the most densely populated neighborhoods in the entire region. The original plan was to have 10,000 residents in the 32 acre development. That would represent a population density of 200,000 per square mile or 312 per acre. For awhile the Waterfront was behind pace for units with 3300 the target, but recent proposals for taller and more dense projects are nudging the neighborhood closer to the target range. I would estimate that the finished total at buildout will support closer to 8000 residents, but the population density will still exceed that of the current density in Portland’s Pearl District. For the sake of context, the Pearl District does have a much larger land area of roughly 200 acres against the tighter and more compact 32 acres at the Waterfront.

There will always be people that want to be in the center of the metro area, and Portland is going to win that contest. But with all the troubles in the Rose City, most of which have been self inflicted by a poorly run local government and an awful administrative system, many Portlanders are fleeing the city center. The glaring black-eye is Portland’s population growth has slowed to a snail’s pace and office vacancy sits above 27% which is simply unhealthy.

Downtown Vancouver enjoys a tight office vacancy rate of just 5.8% which is why we are seeing significant new development in office space while other cities are scaling back. Downtown Vancouver has thousands of housing units under construction or in the immediate development pipeline. There is no denying that the local energy for urban development is north of the Columbia. A shocking report from the RLB Crane index for Portland came in the Q3 2022 report of just 15 cranes in Portland. Is it possible that Vancouver could have more tower cranes up than Portland in the near future? We currently sit at 6 active cranes with a 7th on the way soon and possibly 2 more before any of the current cranes come down. That would give us 9 and Portland has been losing crane count consistently since Q3 2019. I await the Q1, 2023 report likely out in April. FYI: RLB issues this report twice a year, Q1 and Q3.

Urban condos in Vancouver saw a tightening in inventory as no new listings appeared and several units went pending or closed. There remains some pressure on buyers but conditions for buyers are not as hectic as they were 18 months ago. We are seeing multiple offers but the tendency has been close to asking some a tad less a few a tad more.

It looks like Aegis Phase one will be leasing units at the end of April. There also appears to be a name change for Phase one to Aeon at least that is what Apartments.com shows.

Aegis Phase II Primed for Launch & Academy Celebrates Sesquicentennial

Aegis renders with Academy in middle

At the end of last month Marathon Development closed on the final parcel at the Academy which will allow them to begin construction on Phase II of Aegis. Phase I is in the final stages of completion with most of the exterior structure complete and interior build out underway. They closed on three parcels to build Phase I. Two parcels along C street and a parcel facing 12th Street. The remaining parcel, the largest of the four is now recorded and opens up the NE corner of the Academy site where the Laundry and Chimney were recently demolished. Aegis has already run through the land use and design review phases, so now they just pull permits and start. I am not sure where they are on that, but I wouldn’t be surprised if they have their ducks all lined up to start this spring. The first phase brings 140 units and some retail. Phase two will bring 200 units and a parking garage. The two buildings on the left of the drawing are almost complete, the center structure is the 150 year old Academy building and Phase II is the larger structure at the top right.

Aegis Phase I from 5th floor of Library 3/2023

That final purchase produced more cash for the Academy to help finish the restoration as well as the complete remodel of the front courtyard area that will be spectacular when completed sometime in the next few years. There were a lot of detractors when the Aegis project was first proposed but in the end the entire area will be much nicer. The grounds were not well kept and being used as surface parking. It was a bit of a blight. Having brand new shiny buildings is better than having a weed infested parking area making the whole area look dingy. The academy building is a beautiful structure that deserves to be surrounded with nice landscaping and high quality structures as neighbors. That is happening and that is good.

I mentioned the Academy’s Sesquicentennial in the title and that is a milestone actually. It was built in 1873, so 2023 is in fact the 150th anniversary of that important historical building. I have some information about this building here. But the Clark County Historical Museum has a lot more. It is a fascinating tale of one of the most influential people in Clark County history. Mother Joseph a pioneer woman that helped make this area a regional leader for decades to come, designed and helped build the House of Providence building AKA the Academy.

There was substantial activity in the local urban condo market last week. Business was mixed with a few new listings, a few pending saled and some closed units. This made for a relatively neutral change in the inventory. But the increased activity is a positive sign that buyers are still excited about living in our urban areas, in particular the Downtown area. All of this activity and the ready acceptance of luxury apartments in the Downtown and Waterfront area is highly favorable for Condominium developers. Many people want to own their residence but don’t want to deal with a yard or exterior maintenance. This can be attractive to both the busy working people that spend long hours working their way up the proverbial ladder of success as well as older retired people looking for a nice place will no exterior maintenance. I am looking forward to a developer proposing a condominium tower with a little less opulence than Kirkland that opens the market up to people in the middle class. We shall see, condo development tends to be a more tricky animal than apartments.

Some of you may have noticed the construction activity on Block 7 at the Waterfront. This is the block immediately to the left after you clear the Grant Street Rail Underpass. This is an 8 story parking garage that will feature retail space facing Columbia Way and wrapping around both corners. It is expected to have well in excess of 800 spaces. Once complete the temporary surface lots on Blocks 5, 10, 11, 13, and 14 will be available to develop. Holland Partner Group already has a proposal for a 12 story mixed use project on Block 11, I discussed in an earlier post. The garage will be tall enough that I expect a tower crane to be erected to support the project. It is possible that Block 5 may be at least partially used for staging the construction.

Those of you watching the development may also have noticed that Block 3 ‘Timberhouse’ is nearing completion. That project features 8 floors above ground and 2 underground. 227 units of apartments should start leasing this summer. LPC West is currently underway with the Terminal One office project for ZoomInfo, that will be a 10 and 9 story parking and office complex it is now up about 3-4 floors tall. LPC West is the master developer for the City of Vancouver’s exciting Waterfront Gateway development and they have already submitted updated and CCRA approved designs. They are also in contract for both Blocks 1 and 2 of the Waterfront which already have preliminary approval for 10 and 12 floor office and residential towers respectively. They have become a major player in Vancouver urban development over the last few years.

I’ll have the last of the community spotlights in the near future.