Peterson sells downtown tower; transit factors into other deals

Peterson sells

The deal is shrouded in secrecy but a circular from Avison Young has confirmed that Peterson Investment Group Inc. has sold the United Kingdom building at 409 Granville Street.

The purchaser and price remain undisclosed, but industry sources indicate the buyer is the same Chinese investor rumoured to have purchased the property last September. Reports at the time pegged the deal at $122 million, something above the actual sale price in the deal Avison Young recently brokered.

The property last traded in 2004, when Peterson acquired it (and the Fairmont medical building at 750 West Broadway) from Morguard Real Estate Investment Trust. Morguard’s aggregate proceeds from that sale of the two properties, plus a half-interest in three other assets, were $75.8 million.

The acquisitions occurred as a balancing of Peterson’s portfolio. A dozen years later, with the market reaching fresh peaks, Peterson has joined the many investors who feel it’s time to extract their equity.

Transit-oriented deals

Proximity to transit undoubtedly worked in 409 Granville’s favour, with the Canada Line’s Waterfront station entrance on the building’s doorstep, but it’s not the only deal capitalizing on its transit-oriented appeal.

Avison Young brokered a deal for 1296 Station Street this spring that saw owner Pioneer Investments Ltd. of West Vancouver form a joint venture with Rize Alliance Properties Ltd. The new venture will pursue redevelopment of the 41,395-square-foot site with an office block oriented to the adjacent Main Street-Science World SkyTrain station.

Demand for transit-oriented sites has also led to solid interest in a city-owned site adjacent to VCC-Clark station once touted as a home for Planet Bingo. Development of the Emily Carr University campus and new Mountain Equipment Co-op headquarters points to a new commercial development on the site.

The city is accepting offers on the property through June 2.

Just off transit

Meanwhile, in Burnaby, Adera Development Corp. and Sun Life Financial are proceeding apace with a new project a short walk from the Production Way-University SkyTrain station.

Situated in Lake City, Eastlake Campus is a three-phase, campus-style development that’s seen interest from tech companies seeking a blend of office and warehouse space for clean industrial uses from research toassembly and distribution. It’s not Mount Pleasant, but Eastlake Campus is just steps from local craft beer purveyor Dageraad Brewing.

That’s convenient for employees of Novadaq Technologies Inc., the biggest tenant so far with 35,000 square feet in the first phase of just over 100,000 square feet. Other tenants include Sugoi and Race Face, manufacturers of activewear, as well as Toshiba and BlackBerry, which has taken the first 10,000 square feet in the second phase.

Roger Leggatt, associate vice-president with Cushman & Wakefield Ltd., said there’s been strong interest on an additional 50,000 square feet from various parties.

Clarification

A reader notes that last week’s item regarding the strong market for purpose-built rental properties, which has prompted South Street Development Group to build a 282-unit rental tower in New Westminster, neglected to mention that the project received support from the city.

Despite the comment from broker David Goodman that “all the elements required to make a project more viable are in place right now,” the reader noted that government support is still key to making projects possible.

South Street, for example, received a density bonus a 50% discount on its building permit fee, and made no community amenity contribution. Transit subsidies and a reduced parking requirement also sweetened the deal.

“Without such policies, it is impossible to justify building new market rental buildings in Greater Vancouver given land costs and the fact that zoning bylaw requirements for such things as parking favour condo development over market rental,” the reader pointed out.

Point taken. 

pmitham@telus.net