Over the last few weeks I have noticed a gain in inventory each week. Although this normally is a sign of a slowing market, in our case inventory has been so tight it has actually hurt the market rather than help. A little easing on inventory is a good thing. However we all should pay attention to this stat because there comes a point where inventory levels can reach critical mass and lead to falling prices.
I have mentioned numerous times in recent months that the strong seller’s market has been almost entirely built on a lack of supply rather than an abundance of demand. As supply levels increase and lending rates rise, supply is increasing at the same time demand is falling.
For urban condo owners in America’s Vancouver we very well may have peaked for our units in the city center. So peaking is not necessarily the precipice of doom but could simply mean that prices may soften a bit of the properties may sit a little longer before receiving offers. This is a normal cycle. But for those looking to capitalize on the highest possible price, now could very well be the time. One never knows how the future plays out, but the data shows trends towards a slightly more friendly market for buyers.
I was unable to catch the CCRA review of the Waterfront Block 21 Modera project but I will review the video feed as soon as the City releases and report on how the CCRA ‘ruled’ on its design.
Kirkland Tower had a pending unit return to active this past week. It looks like occupancy is delayed again until July and that may have been the last straw for the buyer, or perhaps the interest rate got too high and the buyer was priced out. Kirkland has had a little tougher time than other builders in getting this project to the finish line. It will be the crème de la crème when complete, but they better get it done soon, financing conditions are worsening and the stock market took a sniper shot to the head this month.
Over all things remain solid and secure in Downtown Vancouver’s urban market.
A number of recent listings in the very high-end Tidewater Cove have had little trouble selling lately. Despite higher rates and an inflationary cycle, these units seem to be doing well. The question is who is buying them and where are the sellers moving? If you are curious about this condominium community there is a page dedicated to it here: Tidewater. These units tend to sell well above $1 million and some of the larger units in excess of 4000 SF fetch many millions. Several smaller and mid size units are listed and some are pending, yet a few more closed in the $1-$2 million range recently.
Where are these new buyers coming from? Some from Portland as we have all seen a bit of an exodus from Rip City. Some could be renters in the many new luxury apartments that have gone in over the last few years. They are making the decision to stay with a commitment to buy rather than rent. Vancouver’s urban core and waterfront areas extending east to Tidewater are very desirable locations for many reason discussed ad-nauseum on the site.
I can’t help but wonder if at least a few of these recently listed ‘mega-condos’ are owned by people moving into Kirkland Tower in the next several weeks. Kirkland will be the most exclusive and unique condominium project in the entire metro area as the only true condo-hotel lifestyle setup. Portland’s Ritz-Carlton will be the second when it opens in late 2023 or early 2024. Kirkland is smaller than the Ritz, but frankly is in a better location at the Heart of the Waterfront.
The luxury market success tends to help boost commerce and business that all residents can take advantage of. Here’s to the success in Vancouver’s urban core.
This Thursday the CCRA will do its design review for the Block 21 Waterfront ‘Moderna’ Project. This will be the tallest structure thus far on the Waterfront and the largest apartment building expected to have roughly 270 units on 14 floors. I should have more information next Monday.
I reported earlier that construction is underway on the 12 story Springs Living project on Waterfront Block 18. That is a large project, easily the largest thus far at the Waterfront. It isn’t the height that makes it a big deal, in fact it will be substantially shorter than the Kirkland Tower on Block 4 wrapping up next month. It is also a tad shorter than both proposed high rises on Blocks 1 and 2. This project is however going to cover the entire block, the largest block in the entire waterfront development at 1.29 acres. The block has an irregular shape and the new building will follow that shape making the structure itself unique among all projects thus far proposed for the neighborhood. This is a very nice bit of architecture we will see rise up over the next two years.
A great deal of new development is about to break ground over the next few months. LPC West is tasked with erecting the new Zoom Info HQ at Terminal one covering both blocks A and C. Word on the street is they intend to break ground this summer in Q3. This will consist of two high-rise buildings separated by a public space and connected by a skybridge. It is a nice project and the east building will also follow a curved path to fit tightly on the irregular shaped Block A.
For a bit it looked like LPC West might break ground first, on the more recently announced Block 1 and 2 project at the Waterfront. Both of those lots were abruptly cleared of all construction trailers and related equipment. Block 2 is totally vacant and Block one is being used as construction parking. I have not however, heard any rumors of a groundbreaking on that multiple high-rise project taking place before Zoom Info. It just appeared that way based on the physical status of the blocks in question. We shall see how that plays out.
LPC West has become a significant player in Vancouver’s urban real estate over rather short period of time. Not only did they land the Zoom Info deal a large 350,000 + square foot development, but they quickly created the solid two block proposal for the Waterfront, mentioned above. They also recently won the Master Developer award from the City of Vancouver to run the development of the future ‘Gateway District’ along the north side of the railroad berm.
Next month should usher in the grand opening of the Holland HQ and attached apartments at Block Ten Downtown, The Indigo Hotel, and Kirkland Tower. Later this year or very early in 2023 we should see several other urban projects finish up including the first phase of the Aegis project at the Academy.
It’s not just luxury apartments either. Adding to Vancouver’s already impressive count of income restricted urban developments, there is Jefferson Street Apartments, Residences at Arnada, and Miles Terrace; all three are designed for lower income and working class residents and the former opened last month, the latter two will open next month, and in Q3 respectively.
Economic diversity is a critical part of a successful urban community. Urban communities need to offer services within a short distance to create the city vibe, and counter dependance on personal transportation to thrive. In order for all that commercial services infrastructure to function, housing to support entry level and mid level service sector workers is invaluable. Those workers that provide the services that attract affluent residents can participate in the experience of the community, not relying on a long commute. Living and working in the same neighborhood can be a wonderful experience. This is especially true when that neighborhood is a desirable spot to be like Downtown Vancouver.
Vancouver absolutely deserves some serious kudos for providing that opportunity with well over 1000 units of income restricted and affordable apartments in the city center and hundreds more in the pipeline.
It seems every other week it’s slow then busy, slow then busy… last week I reported rather stagnant transaction situation, the week before was busy and lo and behold, there was a fair bit of activity in the local urban condo market this past week. Yes the spring real estate yo-yo is in effect. There was a positive gain to inventory last week for the first time in quite a while and that will help keep the reigns on a very hot market. Take a look at the individual activity for any of the condo projects in the urban core a see where it’s popping’ and where it’s not. Activity is picking up at Tidewater and Shorewood which lie at opposite ends of the pricing spectrum. It seems the market is showing little preference for price.
Meanwhile activity in the construction market Downtown continues at a robust pace. I still worry a bit about the local bureaucrats taking too long to approve projects as capital is drying up in this inflationary cycle. One of the ways that Seattle weathered the horrific recession 12 years ago was due at least in part to the huge pipeline of projects with funds already committed to construction. Projects under construction during economic down cycles can provide much needed high paying jobs that can help carry a region through with lesser economic pain. Vancouver is in a very good spot to get projects committed before any economic downturn can dry up resources.
Our fair city has invested large sums of taxpayer money into infrastructure and tax deferrals to help generate this amazing boom. In fact the city has done an admirable job in this regard through multiple mayoral administrations. But there remains a duty to the public to ensure that those funds result in the fruition of the ideas presented to the public when taking these steps and making the public investment. It is here, where the city can act quickly to secure projects that can carry us through a slower economic cycle that may be lurking on the near horizon. This will allow the city in return to collect far more taxes on the increased value of real estate in the area.
They have been taking run down former industrial sites that were providing little or no taxes to the city and in some cases even creating a liability for the taxpayers, then converting them into powerhouse revenue generators allowing the city to fund needed upgrades to city services that benefit all Vancouver residents. This is a good thing. Taking the lesson from 2009-2011 when the recession hit and construction all but died for five years, is well advised. A few projects that opened in those years were those that were funded prior to the market collapse. The city is in a prime position to get public and private projects funded prior to any downturn. These projects can literally carry a city through slower economic times. Cities are also equally capable of delaying projects to the point of eliminating them all together. The salty stock market right now is pushing cash into other investment vehicles including real estate. City officials and developers need to get in gear and grab that capital while they still can. Large real estate projects have been known to capture capital and carry it through a recession.
Here’s hoping for a soft landing at ‘Economics International’ 🙂
According to an article in The Columbian on April 21st, the commission for the new bridge has selected light rail as the mass transit option for the project. The article suggests that MAX will be extended into Vancouver as part of the new bridge project. It seems that Mayor Anne, C-Tran, and of course the big winner Tri-Met all agreed. I have mentioned that I have no issue with light rail in Vancouver so long as it stays in the urban core where the high density development supports it.
This is still early and there is time for the City Council and Mayor to grow some spine and stand up for us by negotiating a deal where all trains bound for Clark County are run by C-TRAN rules rather than the Tri-Met criminal wonderland express rules they use in Portland. We shall see.
I have a page dedicated to light rail, here. I think a stop as close to the waterfront as possible is needed since that district will almost certainly be Vancouver’s most dense residential neighborhood even before it is built out. They expect 3300 residential units at build-out and seem to be on pace for that number. The project covers just 32 acres and and with a likely population of nearly 10,000 that is serious big city levels of density. The math works out to 312 people per acre. That kind of density allows light rail to thrive. Another stop near Esther Short Park is also important as densities in that area exceed 100 residents per acre. The park also serves as the defacto ‘center of town’ with events, concerts, businesses, conventions, etc all immediately nearby.
I do hope the council thinks long and hard about what light rail IS and IS NOT. Light rail is inflexible. Once it is built it is essentially PERMANENT. You can’t just get all giddy and happy about it and all the money it represents. Remember, politicians love spending OUR money more than any other career group, yes, even more than Wall Street Bankers 😉 Light rail is not cheap and mistakes can set a city or county back decades. Busses are flexible as the demographics change bus routes can easily and inexpensively be changed to compensate. Rail is fixed in place and is catastrophically expensive to move.
I feel like I need take a new assessment on a light rail route from the simple one I had on the light rail page mentioned above. Based on both current residential density and projected future density the route and stops shown here could work. I originally suggested running a loop up C street to McLoughlin then down Washington Street and back on I-5. It seems the commission wants a stop along I5 near McLoughlin so perhaps a freeway Park and Ride so I modified it to comply with that. I am also presuming that Vancouver will have one way rail traffic once across the bridge. Honestly I am kind of hoping for it so only a single set of tracks is required on the city streets. It is also why I thought running the train up C and down Washington was a good idea before this latest decision by the bridge committee.
The stops need to be close to high density housing to make the train as convenient as possible. All of the stops on this illustration meet that accept the McLoughlin at I5 stop which again is likely intended to serve Clark College and a future Park and Ride facility. According to data complied by the Federal Highway Administration most people are willing to walk five to ten minutes to transit. That said, 85% of people will walk five minutes but it does drop to 40% as it passes beyond ten minutes. Here is a list of stations I am suggesting although many things beyond just density go into these matters so keep that in mind. Also this is my brainstorm and is not in any way shape or form ‘official’.
Evergreen Station: Evergreen Blvd at I-5. This station could serve the Fort Vancouver National Historic Site and the Academy as well as a surprising number of nearby units either built or under construction. There are currently close to 400 units built or nearly complete within a five minute walk of this station. Another 200 units is already proposed and I project a total of nearly 1000 units by 2030. The large Library Square development would certainly add a couple hundred all by itself.
Clark College: McLoughlin and I-5. This station could also be a Park and Ride station. There is not a lot of residential nearby here I would estimate less than 200 units in that five minute walk window, but the Park and Ride plus Clark College angle probably makes up for that. 2030 could see another 200 units in future high density development but none is proposed at this time in the immediate area.
Uptown Station: McLoughlin and Main. This would draw from several high density projects in Uptown and Midtown with 168 units in the Uptown apartment building alone. The total number of current units either built or under construction within a five minute walk of this station is around 400. I would project a 2030 total of 700 units. This stop would also benefit the Uptown Village merchants bringing in some outside visitors.
Midtown Station: Mill Plain and Columbia. This stop is situated among several existing high density projects serving a wide variety of residents including senior citizens and income restricted units for lower income earners. There are currently well over 700 units within a five minute walk and proposals for at least 200 more in the pipeline. I project close to 1200 units by 2030. The station would also serve the nearby County Government center.
Esther Short Park Station: West 6th and Columbia. This station obviously serves the Park and all the events associated with it including the Farmer’s Market. It serves the Vancouver Convention Center and a large number of retail and commercial businesses nearby. This is also a very high density residential area with over 1000 units already built or nearing completion within a five minute walk. I would project another 300-400 units by 2030 to boost the total up towards 1400 units. A stop here could also help reduce traffic and parking demands for events in the area as those often attract Portland residents who currently drive to get here.
Waterfront Station: Columbia Street at Columbia Way. This station sits right in front of the location of Zoom Info’s proposed HQ and some 2500 jobs. It also serves the new Terminal One businesses and future open air pier and market. It would serve the Waterfront as well but the Grant Street pier is pushing the five minute walk window a bit at closer to 7 minutes. The west end of the Waterfront would need closer to twelve minutes to reach the station. The waterfront will be Vancouver’s highest density neighborhood by far, and one of the most densely populated neighborhoods in the entire metro area. Terminal One, the Waterfront, Kirkland’s new Waterfront East, and parts of the new Waterfront Gateway District would provide this station with at least 700 units inside that five minute walk by 2030 and well over 3000 units within ten minutes walk by 2030.
So I was really heavy on the importance of density to support rail. No honest broker will say otherwise, density is critical to the success of a rail transit system. With the sole exception of the NYC subway every single rail transit system in the United States operates at a deficit and requires subsidies to survive. NYC by the way is one of the world’s mostly densely populated cities sporting a city wide population density 14 times greater than our Vancouver USA. So once this thing is built and serving Downtown it will be only a few years before the greedy politicians start pushing for it to go to Orchards, or Cascade Park, or Salmon Creek. Just say no to suburban rail. Busses are the answer in the burbs 🙂
On the condo front, urban condos last week had just one transaction; a new pending sale. Wow after a flurry of activity the week prior last week was very quiet.
A fair bit of condo activity from new listings to pending and closings happened last week. The inventory levels are still tight and there was no discernible change in direction just a lot of general urban condo real estate activity across the board.
On the development side of things activity has been robust all over the city center. I visited Block 18 on the waterfront last week and noticed the construction fencing is up, a contractor trailer is setup and workers are onsite. Whether the “official” groundbreaking has occurred or not, this site is under defacto construction. The Springs Living is a highly anticipated development featuring a large 12 story building featuring roughly 250 units for senior citizens mostly active living but some assisted care and memory care as well. The plans look sharp and it should be a fantastic addition to the Waterfront’s already impressive line up of completed and under construction projects. This project has an estimated opening in 2024. I’d say Q4 2024 completion is a bit liberal with the current state of supply chain and labor so conservatively think Q2, 2025.
Down at the other end of the Waterfront there is some shuffling around on Blocks 1 and 2 as well as activity on Block A and C at Terminal One. Blocks 1 and 2 have been serving as staging blocks for several projects but Block 2 is now completely cleared and Block 1 is just handling some parking for construction workers. No trailers or supplies are parked on either of those lots. Meanwhile to the east on Terminal One staging has been expanded beyond what is needed to wrap up the AC Marriot hotel project across the street. Is LPC West fast tracking the two block development on the east end of the Waterfront? Sure looks like it. That is a major project in its own right. Two full block high-rise buildings one featuring commercial office the other residential. The photo at left shows a Google Earth image (Google imagery dated 7/2021) with some Sketchup models I did of proposed and under construction projects in Vancouver. This shows the scale of the project and how is fits into to the emerging new skyline.
The excitement continues as Vancouver begins to see the fulfillment of the promise at the Waterfront. The economy remains strong but some in the industry feel that a recession is brewing. That could take a bite out of the pool of capital used to fund big projects like these. Hopefully the money will continue to flow and the dream of a bustling urban neighborhood will reach its full potential.
Many of us woke up to moderate snowfall with accumulations well above 2 inches. I got about 4 inches in East Vancouver where the snow continues to fall despite temperatures in the mid 30s. This will all washout in a day or so and any constructions delays as a result will not impede on getting the structure done on schedule.
The Columbian newspaper wrote an article about the Block Ten mixed use two tower project opening soon. They are set to start leasing residential units in the Columbia Street tower with anticipated move ins starting in June. The office tower facing Washington Street will begin occupancy with award winning urban developer, Holland Partner Group moving in in May after years on the seventh floor of Main Place.
More news is circulating around the replacement of the Interstate Bridge. Tolls are likely, and they are working out tolling as part of the equation. There is also some climate and ‘equity’ issues being worked out which is likely to get contentious at times. My only concern is the aesthetic. Oregon will not care one bit what this bridge looks like. As I have said many times, one need only look at the crap hole conditions on Hayden Island to see that it is essentially the bastard stepchild of Portland. We however here in Clark County and in particular Vancouver, are heavily vested both privately and publicly in the entrance to our city and state as well as our grand new waterfront. A monolithic concrete structure will be ugly and degrading to our local waterfront and downtown areas.
I just don’t see any strength in the City Council to fight for an aesthetically pleasing structure. I can already hear the whiny little twits in Portland not wanting to spend a couple of million extra on a multi billion dollar project to add some eye candy to the bridge. We must scream it to the high heavens. A little faux cable motif with some LED lighting will add a pleasing look to what is otherwise a gigantic overpass coming across the river. This thing will have a roadway deck 8 stories off the streets so it needs to have a little style.
No one on the city council nor the Mayor has shown any signs of sticking up for Vancouver’s best interests on this matter. We need strong leadership on this because the ugly POS they have been showing us, would be with us for a hundred years if it is built! It’s times like this I miss Mayor Pollard, the five term former Mayor would not stand for a degrading structure that is destructive to all the private and public entities investing in our future here in Vancouver. I have not heard a peep out of any council member or the Mayor about the importance of a pleasing aesthetic on this new bridge. That is bordering on dereliction of duty. Vancouver’s council is beginning the smell a lot like Portland and Vancouver voters need to think about that in November.
Two new listings at Tidewater Cove came within a day of each other after months of no activity in the development. Tidewater Cove features some of the most expensive condominium units in the city spread out on a gated campus style property. The buildings are arranged to capitalize on spectacular Columbia River views.
On the more affordable front, several listings went pending and a few more closed without any fresh new listings to replace them. That will tighten things up a bit. There are a great many higher end apartment units that have arrived in the last five years, and many of these renters will want to own soon. Demand for condos in the $500-$700k range could spike hard if interest rates remain in the sub 6% over the next five years.
Projects continue to march ahead as Vancouver’s urban core continues to add hundreds of new units and the market seems to be soaking them all up. Two tower cranes came down in the past few weeks as an indicator that those projects are in the final phases of construction. Aegis at the Academy Phase I has been topped out for a long while ad those 140 units could be available late summer of fall this year. I think that will bring a nice boost to businesses east of Main that have fewer residential units serving them up customers. Block 17 on the waterfront is also wrapping up and should have 177 units available for lease in Q4 as well. Block Ten downtown which has a two tower office-residential setup should open late spring this year. 110 units of housing and a new HQ for the Holland Partner Group.
With those two cranes down, Vancouver’s core only has a single crane operating at the moment. It’s been a while since we had less than two cranes in operation and we had five going less than a year ago. The lone crane being the Waterfront Block 3 project ‘Timberhouse’. There is a crane operating at the Palisades on the Eastside of town. I would imaging a flurry of new cranes is about to arrive as I expect two for the Zoom Info development, another two for the Block 18 and block 19 Waterfront projects, and possibly two for Aegis Phase II and maybe a seventh for the Waterfront parking structure on Block 7. Whether these all operate at the same time is unlikely but possible.
Things continue to look bright for Vancouver’s urban core and there seems to be no shortage of renters and buyers for residential property in Vancouver’s heart.
Listings out paced pending and closed this week a bit of a rarity in the last year or so. The activity was led by three units listed in a 4 day period at Northwynd. Another units was listed at The Village at Columbia Shore but that one went pending almost immediately. A total of three units went pending to counter the new listings a bit.
Thursday two applicants will submit pre-app packages to the city for initial review. Angelo Landing at the Heights, presumably the applicant is Al Angelo Company, will possibly be the first urban density project in the newly minted “Heights District” the pre-app notes refer to a mixed use project.
Another project is being proposed at the Palisades in East Vancouver as well. Named Palisades Point, that will be an urban density commercial & residential project as well.
The latest news on Kirkland Tower and the Indigo Hotel on Block 4 at the Waterfront is June 1st opening. This project is spectacular in scope is undoubtedly the nicest high-rise project in Vancouver. The hotel will have an open atrium all the way to the top. But the project has been beleaguered with delays. Some of these delays are no doubt due to supply chain issues being faced by every developer and the slowdown associated with COVID. But this particular development has been hit harder with cost overruns and delays. I do hope they can meet the June 1 opening target. After all, the original opening date was Fall 2020.
I showed a unit in Academy Square over last week and was pleasantly surprised with the ambiance of the interior courtyard even now with the six story Aegis project full topped out. Phase two will add more structures but it seems like the shadow effect will only last for two months, likely December and January. The afternoon sun in mid-March was high enough to spill into the courtyard over the top of the taller Aegis. I was a bit concerned about that when Aegis was first proposed, but the fact that you no longer have to look at a deteriorating parking lot is a definite boost in the urban view.
List of projects I expect to break ground in the city center over the next several months:
Waterfront, Block 18: The Springs Living, 12 story senior living. @$150m < 3 months
Washington and 4th: Hurley Washington Apartments, 6 stories. @$40m < 4 months
Several new listings appeared on the market last week and a several went pending or closed. Inventory was mostly unchanged. With all the apartments going in and seemingly no trouble renting, one would expect a robust engagement with the market from renters wanting a ‘piece of the action’ so to speak. As rates tick up buyers may start to feel the squeeze so buying now while rates remain manageable is not a bad idea.
Those traveling around the city with a keen eye, may have notice a pair of tower cranes were removed recently. The Broadstone Claro on Block 17 at the Waterfront and Aegis Phase One at the Academy have both removed the cranes which is a significant event in the construction of taller buildings. Both projects will still complete exterior detail work and then build out the interior space. Finally the landscaping goes in. The removal of the cranes indicating that the final phase of construction is underway. Those two projects combined will add another 320 or so units to the urban core. We should be able to expect those to start leasing this summer.
The CCRA went over the progress on Vancouver’s Waterfront Gateway District discussing potential land use and development timelines. The western end will likely be the first to develop but we are still a ways out on any groundbreaking ceremonies. That will fill the gap between the waterfront and Esther Short Park.
Conspicuous by its absence is the Hurley Project at 400 Washington. That project cleared most of its design review hurdles but seems to be in a holding pattern at the moment. The project calls for roughly 180 apartment units in a six story building covering the whole block.
2022 is shaping up to be a very busy year for urban development in Vancouver.