Box set
Kelowna companies Mission Group and BigSteelBox have joined forces.
The merger allows BigSteelBox, a supplier of shipping containers, to take advantage of Mission Group’s real estate expertise as it shifts from leasing sites to owning them. Mission Group sees future development opportunities in the same sites.
BigSteelBox operates 18 locations from B.C. to Ontario and wants to boost the number of sites it owns to eight from three, says Jason Seibenga, the company’s 29-year-old president.
“We would find ... something that’s more light industrial, in an area that’s maybe going commercial or in an area that’s growing,” he explained.
As development envelops its sites, making higher and better uses possible, Mission Group would have the option to redevelop BigSteelBox’s properties.
The merger also appealed to Mission Group because BigSteelBox does a booming business in modifying containers for use as modular offices and housing. Consistent growth means the modified containers now account for roughly 15% of its business.
“We do a lot of labs and things that need to be up in the oil field but need to be moved around often,” Seibenga said. “For a highly modular lunch room or laboratory, or wash closets, these work extremely well.”
BigSteelBox outfitted 60 units to accommodate military personnel during the 2010 Winter Games and will rig out a 40-foot container with two 160-square-foot units for the Global Petroleum Show in Calgary on June 12.
“Our plan is to have it finished more like a Ritz-Carltonthan a camp,” Seibenga said.
Mission Group president Jonathan Friesen suggested in conversation last month that modular units might be an option for meeting the needs of workers in towns like Kitimat, where Rio Tinto Alcan plans a $3.3 billion smelter upgrade by 2014.
“We see that [container modification] could very easily be as large or larger than the other part of our business if we start ... being able to build camps,” Seibenga said.
Interior intrigue
The most recent Royal LePage Real Estate Services recreational property report includes intriguing numbers regarding B.C.’s Interior.
Drive-in waterfront cottages – defined as a three-bedroom 1,000-square-foot residence – check in at $400,000 this year. That’s down from a range of $650,000 to $1.5 million last year.
The shift is less a result of circumstance than perspective, however.
Royal LePage president and CEO Phil Soper candidly discounted the numbers and attributed the shift to “too much subjectivity” rather than “a fundamental move of recreational property values.”
The subjectivity inherent in the report is a bugbear of Steve Gray, a broker at Royal LePage Kelowna, which contributed to the report.
“Several of us have tried writing this for them over the years, and that’s why you have a difference of opinion.”
Gray added that the assessment is further complicated by the fact the Okanagan is a second-home market rather than cottage country.
“We don’t really have recreational condominiums,” he said. “We have condominiums that are located on the lake or close to it, and I don’t know if that would really be considered recreational property or not. Some people may be using that as a recreational property, but we’re talking 3,000, 4,000-square-foot homes.”
Gray feels a better range for the kind of property people are using for getaways is $300,000 to $700,000, which he said hasn’t changed since 2010. “The last two years have been very stable,” he said. “There hasn’t been the massive price changes [that] appeared in that report.”
Sold!
Blaming foreign capital for distorting domestic real estate values has been popular over the past two years, regardless of the facts used to support the assertions. However, deals fuelled by foreign capital are being done, and as condo marketer Bob Rennierecently told the Urban Development Institute, it’s because the foreign money sees good long-term value in Vancouver.
Yuanheng Developments Ltd. is a case in point.
Yuanheng recently paid $30 million for a site at West Broadway and Hemlock Street in Vancouver that’s currently occupied by a Mercedes-Benz dealership.
“The reason a site like Mercedes-Benz sold well over the $24 million that the locals would pay is simple,” Rennie said. “The mainland China buyers saw a long-term hold and the commercial value, beyond the instant condo development gratification that I like.”
Yuanheng plans “class-A offices and retail space” at Broadway and Hemlock, but has also acquired land in the Cambie corridor for condos, and has developed several single-family homes in the Lower Mainland since 2004.
Yuanheng’s aspirations join those of Jingon International Development Group, which plans a major development for Duck Island, acquired for $34 million last year. And both investments follow a Chinese firm’s scouting the Lower Mainland in 2005 for a site to accommodate a 350,000-square-foot trademart and distribution facility – in retrospect, a sign of things to come. •
