Malahat dealing
Vancouver Island's 35-room Aerie Resort in the rugged Malahat region north of Victoria comes under the judge's gavel on September 29 in a court-ordered sale that will see it trade for at least $3.1 million.
That's the offer Island Savings Credit Union has accepted from 0919097 B.C. Ltd. for the property, which includes 85 acres of land and a helipad. Seven years ago, when Condé Nast Traveller deemed it one of the world's top hotels, the Aerie was pegged at $13 million.
Competing bids could be put forward in court, of course.
“There are still parties coming out of the woodwork and potentially wanting to participate,” said Randy Holt, partner and vice-president with DTZ Barnicke Victoria Ltd. He said more than 60 parties have toured the property during the past 17 months, right up until the last two weeks.
However, court documents indicate the final sale price won't cover the $4.8 million owing to Island Savings by the Aerie, nor the $657,989 the credit union is owed from court-authorized borrowings by the receiver, Glover-Drennan Inc. Court filings also indicate that any buyer will have to spend upward of $2 million to refresh the property.
“Whoever buys it now is going to have to reposition it,” Rick Pettinger, managing broker of DTZ Barnicke Victoria, said last year. “They're going to have to take it from five stars probably down to two, two and a half. But they're going to get a really good buy.”
Tower plans
Credit Suisse held an open house in Vancouver on September 26 to announce plans for a 30-storey office tower at 819-827 West Pender Street in the heart of the city's business district.
The new tower will incorporate a renovation of the former Vancouver Stock Exchange at 475 Howe Street. Credit Suisse plans to restore the original 1929 trading floor and seek official protection of the building on the city's heritage register.
Announcement of the $200 million project follows Bentall Kennedy (Canada) LP's confirmation that it will build its much-anticipated office tower at 745 Thurlow Street.
“The Vancouver market's too tight. It's imbalanced. It needs new construction,” said John Purcell, senior vice-president and portfolio manager for Bentall Kennedy (Canada) LP, at the September breakfast meeting of commercial real estate association NAIOP.
Credit Suisse's project will add another tranche of space to the 1.14 million square feet already planned for the downtown core in the next five years.
No speculation allowed
Vancouver planning director Brent Toderian was upbeat but uncompromising as he answered questions from Appraisal Institute of Canada-B.C., Real Estate Institute of B.C. and Royal Institution of Chartered Surveyors members following a recent luncheon presentation.
The appraisers were trying to understand just what they were being asked to do with respect to community amenity contributions (CACs) in the Cambie Street corridor. CACs are integral for development of the amenities that make densification in Vancouver work, according to Toderian, but the protocols for securing CACs in the Cambie Street corridor are a matter of widespread concern and confusion.
The city negotiates CACs during the rezoning process, which often occurs after properties trade. But Toderian said the sale price of properties can't reflect the rezoned value, because that would be speculation.
Vendors must instead cede the value of their properties to purchasers, who city protocols will hit up for a contribution equivalent to 70% to 80% of the lift in the property's land value achieved through rezoning.
Toderian said appraisers advising developers on the value of properties have to bear the CACs in mind when trying to determine their market value, which will be necessarily lower than on comparable sites from which the city isn't seeking CACs.
“Our system can't reward speculation,” Toderian said.
“The first time we give credit to a purchase price that reflects rezoned value, this system collapses. We have no intention of letting this system collapse.” •
