B.C. pays 4.5 times assessed value for Downtown Eastside’s Patricia Hotel

Price of $63.8m, or more than $327,000 per room, is 3.3 times higher than the average for hotel property sales in Canada in the past year

Patricia Hotel bought to house the homeless | Glacier Media

The British Columbia government has paid $75.5 million to buy three old hotel properties on the Downtown East Side of Vancouver, including an eye-popping $327,179 per room for the century-old, 128-room Patricia Hotel on East Hastings Street.

The price for the Patricia – for which the TripAdvisor web page warns its clients to “stay away from this place at all costs” – is 4.5 times its 2020 BC Assessment value of $15.9 million – down from $19 million a year earlier ­­– and more than three times the average $97,000 per-room price of a hotel sold in Canada in the past year, based on industry data from Colliers International.

In a buying blitz announced April 1, the government also announced the purchase of two other aging rooming houses on north Main Street, the Thornton Park Hotel and the Station Hotel, which have a total of 54 units, 14 of which are currently vacant.

All the hotels have been bought to house the homeless.

Housing Minister David Eby said in a news release that the properties will help the province meet its goal of providing “dignified inside spaces” for everyone currently camping in Vancouver's Strathcona Park by the end of the April.

The Patricia Hotel will initially provide approximately 100 permanent homes with wraparound supports for people experiencing homelessness.

“BC Housing will work with current long-term tenants [in the Patricia] to ensure they have appropriate accommodation as the building transitions to supportive housing,” according to a government statement.

The building will be managed by a housing operator who will be on site 24/7 to manage the building and provide support services to the residents.

“Daily meals, access to life-skills training, employment assistance and counselling, physical and mental health resources and access to addiction recovery services, will be available to residents,”

The B.C government has been one of the largest buyers of hotel properties in Canada over the past year, based on the 2021 Canada Hotel Investment Report from Colliers International.

“Acquisitions by BC Housing saw Victoria and Vancouver among the only major markets to avoid double digit declines in annual transaction volume,” the report noted.

The average per-room price for a hotel sale in Canada over the past year was $97,300, according to Colliers, and the average per-room price in B.C was $128,000.

But B.C. has been paying top dollars for hotels to house the homeless during what has been a devastating year for the hotel industry, with average occupancy falling to a record low of below 30%.  

BC Housing’s purchase of the aging 110-room Howard Johnson hotel on Vancouver's Granville Street last year for $55 million, or $500,000 per door, was ranked by Colliers as the third biggest hotel deal in Canada in 2020.

In all, B.C. Housing was responsible for four of the 10 largest hotel sales in the country in 2020.

B.C. taxpayers also bought the 42-room American Hotel in Vancouver, for $17.9 million, the 63-room Buchan Hotel in Vancouver for $19.4 million and the 152-room Comfort Inn & Suites in Victoria, paying $18.5 million. BC Housing also purchased Paul’s Motor Inn in Victoria last June, paying $15 million, or nearly twice the BC Assessment value.

Daryl Nelson, whose family had owned the 108-year-old Patricia Hotel for more than 20 years, took his frustration to the Vancouver Police Board in July 2019 in an effort to get some action on the escalating mayhem in the neighbourhood .

In the past, Nelson said, service, cleanliness and pricing could overcome the negatives of the Downtown East Side neighbourhood. That was no longer the case, he said in 2019, when many unhoused people were living in tents in nearby Oppenheimer Park and crime in the neighbourhood had seen an uptick.

Strathcona Park, where an estimated 200 campers been living there for months, has replaced Oppenheimer as the biggest homeless encampment in the city.

Western Investor