Co-ops attracting more attention in hot multifamily market

Co-op conversions

Winding down strata properties might be a new phenomenon, but spare a thought for co-
operative housing arrangements.

Cynthia Jagger, who partners with David and Mark Goodman on apartment sales at HQ Real Estate Services Inc., said an increasing number of co-op properties have been coming to market of late. The latest for the Goodman team is the 26-unit Oakview Apartments on Oak Street at West 20th in Vancouver.

“It’s similar to strata,” Jagger said. “People see what’s happening.”

What’s happening is strong pricing as buyers seek properties suitable for operating as apartment blocks. While per-suite pricing for purpose-built rentals once lagged behind that of condos and co-ops, the Goodman team reports that purpose-built rental apartments sold for an average of $533,317 a suite in the first half of 2017. That compares with the Real Estate Board of Greater Vancouver’s benchmark price in June of $772,900 for a west-side apartment and $507,700 for an east-side apartment. With purpose-built rental buildings in short supply, older strata and co-op properties are a win-win: owners can capture more value by banding together than by selling their units individually, while buyers get to acquire multi-family properties for less than it would cost to build new. Some sites have future development potential that make them good long-term buys.

“Co-op buildings are generally superior to existing older rental stock, given owners have made extensive in-suite upgrades … and generally kept the property in good to excellent condition. Suite sizes are typically larger as well,” Jagger explained.

Properties zoned C-2, such as those along the Boulevard in Kerrisdale, are best suited for redevelopment.

“With city approval, a purchaser could potentially develop a condominium project with ground-floor commercial under the existing zoning,” Jagger said.

Regardless of what the developer chooses, Jagger encourages co-ops to seek legal advice prior to any sale as the deals are typically more complex than for other property types.

Clayburn site sells

Clayburn Industries Ltd. has sold the site of its former brick factory at the north end of West Railway Street in downtown Abbotsford to Infinity Properties (Clayburn) Ltd.

Infinity is in discussions with Abbotsford city staff regarding the future of the site, which is designated for midrise development in the city’s official community plan. Infinity development manager Kiegan Scharnberg said a development application is in the works but no further details are yet available.

According to Frontline Real Estate Services Ltd., the site has the potential for a mix of townhomes, condos and single-family homes.

Abbotsford has allocated staff $200,000 to draft a neighbourhood plan for the surrounding area, which the city envisions as a mixed-use precinct. The heart of Abbotsford’s billing a decade ago as the murder capital of Canada, the area is now home to Day 1 Urban Farm and Field House Brewing Co., and planners anticipate a new 100-room hotel by 2025. Based in Langley, Infinity is involved in projects in Langley, Osoyoos, Prince George and Squamish. It is also partnering with Icon Construction & Development LLC on Hidden Falls, a subdivision in Happy Valley, a suburb of Portland.

Debts and trespasses

A meeting at the BC Securities Commission (BCSC) on June 27 has resulted in a hearing date later this year for the father-and-son team of Alan and Jerry Braun, directors of Braun Developments (B.C.) Ltd., and associate Steven Maxwell. The BCSC recently cited the men for fraud with respect to management of funds raised for investment in Edmonton real estate.

Alan Braun, who in addition to his development work is a pastor affiliated with the Canadian National Baptist Convention, resigned July 16 as senior pastor of Royal Heights Baptist Church in Delta. Braun’s resignation honoured an agreement to do so in the event he failed to resolve his outstanding financial obligations to members of the congregation, something he continues to work toward.