Decisions wanted
A growing theme in discussions about Vancouver’s office market future is the importance of B.C.’s resource sector. During a panel discussion the Urban Land Institute hosted last year, one speaker quipped that Vancouver does the province’s laundry based on the number of lawyers, accountants and engineering firms here.
The resource sector is so critical that some in the real estate sector are starting to demand clear leadership from the province when it comes to resource industries; Vancouver landlords want exploration and mine development – not the shaft.
“[The] resource sector is something that concerns everyone,” Mark Renzoni, managing director of CBRE Ltd., said October 3 during a panel discussion at the Western Canadian Hotel and Resort Investment Conference in Vancouver. “When you’re out dealing with the office users in downtown, it really becomes evident that the resource sector is a major player in our economic health.”
With engineering firms being among the most active tenants now in the Vancouver office market, the last thing the province needs is a “cat fight” (Renzoni’s term) with Alberta or similar indecisiveness.
David Podmore, chairman and CEO of Concert Properties Ltd., described the lack of decision-making as creating a more uncertain environment for the province than either the Alberta or Toronto markets face.
“I know it’s not politically correct to say it, but I think in British Columbia right now we’re much more vulnerable to some decisions that need to be made ... in the political environment,” he said.
“I am concerned. ... Things can change quickly, and they can change based on political decisions, to the detriment of the province or to the benefit of the province.”
Without those decisions, B.C. faces losing ground to competitors such as Australia, a formidable coal supplier, or Kazakhstan, which has a pipeline supplying China with oil.
“We can’t be smug,” Podmore said.
Ski season
The Western Canadian Hotel and Resort Investment Conference also discussed the prospects for the resort market – and there was a note of optimism in the air.
While development costs have rebounded to pre-recession levels, performance at hotels across Western Canada has strengthened and traffic from Alberta is returning to B.C. resort properties.
Carrie Russell, managing director of appraisal firm HVS Canada, noted that Kelowna enjoyed a “blockbuster” August thanks in part to visitors from Alberta.
August also saw development work on a new 1,000-acre expansion of the Red Mountain Resort in Rossland, a two-year, $50 million project that will give the former day resort a second peak for skiers.
The expansion will give Red Mountain 2,682 acres of ski hill. That puts it in the top 3% (by area) of ski resorts in North America – larger than Jackson Hole, Wyoming, but much less well-known.
The plans follow on the warm reception Red Mountain Resort has had from visitors.
While other resorts were grappling with ongoing fallout in the resort property business, developer Howard Katkov was pursuing development at a steady pace in line with visitor numbers. The hill attracted 110,000 visitors in the 2010-11 season, and numbers were up last winter, too. Strong performance is expected this winter, all things being equal.
Katkov is counting on visitor experiences to drive sales of accommodation planned for the resort. But in the meantime he is focusing on developing the hill – hence the plans for expansion of the ski area.
“The ski side of our world is very good,” he said last winter. “It will continue, in my opinion, to be very resilient to the economic and ups and downs of our global world.”
