March 7, UBC Campus and Community Planning University of British Columbia West Mall Vancouver, BC V6T 1Z4 (604)

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1 SITE ECONOMICS LTD. 701 West Georgia Street - Suite 1500 Vancouver, BC V7Y 1C6 Canada tel: / fax: info@siteeconomics.com website: March 7, 2011 UBC Campus and Community Planning University of British Columbia West Mall Vancouver, BC V6T 1Z4 (604) Attn: Re: Joe Stott, UBC Director of Campus and Community Planning Hospice Impact on Real Estate Values Site Economics Ltd was contracted in February and March 2011 to provide UBC with an independent assessment of the potential impact on neighbouring residential real estate values from the development of a hospice project on the UBC campus. To measure and determine whether or not a hospice may have an impact on the value of surrounding homes, an analysis of precedent sites was completed. Comparable precedents are simply examples where a similar situation has occurred before and any impact is a matter of historic fact. In order to complete this impact analysis an inventory of all hospices in Greater Vancouver was compiled (see Appendix). Within this group, only hospices within Vancouver and Richmond were selected as comparable real estate markets to UBC, as opposed to the more distant suburbs. The selected hospices were further refined to include only those which were stand alone facilities and not connected to large medical institutions or other facilities which would indirectly impact the analysis of nearby residential values. 1

2 UBC Proposed Hospice The proposal is to build a new two-storey 1,300 sq.m (14,100 sq.ft) hospice facility at the northeast corner of West Mall and Stadium Road on the UBC campus. The facility would be operated by the Order of St John and the UBC Faculty of Medicine. Subject Site Aerial Photograph 2

3 Select Existing Hospice Sites From the list of existing hospices in the region, only stand alone hospices in Vancouver and Richmond were analyzed. The final list of comparable hospices suitable for this analysis is as follows: Canuck Place, Vancouver Cottage, Vancouver Mays Place, Vancouver Salvation Army Rotary, Richmond These are generally similar to the proposed hospice at UBC. These sites are shown on the following map of the region and the four study hospices are further described and analyzed in this report as well as the appendix. Hospice Locations in the Region 3

4 Model Impact Description / Methodology The residential property value analysis was conducted over a 25 year period, for the years 1986 to The dates required for the analysis go all the way back to 1990, and thus precede available tax assessment information. As a result, research into all completed residential sales was completed to generate an average value for discrete five year periods between 1986 and The analysis valued all properties sold within 300 metres of a hospice and compared these to values for all properties within 1,000 metres of the same hospices. This analysis is based on the median property values, not the average property values which are more sensitive to outlier influences and excessive price variance. The variance in value should reveal whether or not the hospice influenced property prices in the housing stock located within a 300 metre radius and did not impact prices within the 1000 metre radius. This assumes all other factors have been held equal. The City of Vancouver average values were also included to act as a control and benchmark against which other value changes could be compared and contrasted to detect any anomalies or trends. The analysis reviewed detached and attached residential units separately, and thus there are two sets of data for each hospice site, in addition to data for the 300m and 1000m radius areas. Hospice Impact on Residential Values The following charts / tables and descriptive text illustrate the experience of residential real estate prices around the four select hospice sites in the region for detached and attached properties within 300 metres of the hospice and for detached and attached properties within 1,000 metres of the hospice. It is very important to note that in some instances there is no sales information and as a result the data entry is blank. The analysis entailed a major research project for BC Assessment going back many years however in some instances there simply were no sales within the study area. As a result missing data in the charts is shown in grey shade. The year the hospice opened in shown by an orange arrow. 4

5 $3,500,000 $3,000,000 $2,500,000 $2,000,000 $1,500,000 Canuck Place Detached Within 300m Within 1000m opened $1,000,000 $500,000 $ $1,000,000 $900,000 $800,000 $700,000 $600,000 $500,000 $400,000 $300,000 $200,000 $100,000 $ Canuck Place Attached Within 300m Within 1000m opened Canuck Place Detached $? %? Within 300m $ 675,000 $ 1,300,000 $ 1,300,000 $ 1,520,000 $ 3,100,000 $ 2,425, % Within 1000m $ 465,000 $ 880,000 $ 1,080,000 $ 1,100,000 $ 2,028,000 $ 1,563, % Within 300m %? 93% 0% 17% 104% Within 1000m %? 89% 23% 2% 84% Canuck Place Attached $? %? Within 300m $ 245,000 $ 515,000 $ 470,000 $ 500,000 $ 811,000 $ 566, % Within 1000m $ 234,000 $ 364,500 $ 395,000 $ 507,477 $ 850,000 $ 616, % Within 300m %? 110% 9% 6% 62% Within 1000m %? 56% 8% 28% 67% Both detached and attached properties within 300m of Canuck Place had a general higher value than properties within 1000m. This upper income neighbourhood is dominated by very large lots and the sample size for attached units is small. The post 2005 increase in attached property values is affected 5

6 by a new high quality condo development on Arbutus St. at 33 rd Ave. Detached units within 300 metres increased in value very significantly. Since its development in 1995 Canuck Place clearly has had no impact on property values. 6

7 $1,000,000 $900,000 $800,000 $700,000 $600,000 $500,000 $400,000 $300,000 $200,000 $100,000 $ $1,000,000 $900,000 $800,000 $700,000 $600,000 $500,000 $400,000 $300,000 $200,000 $100,000 $ Cottage Detached Within 300m Within 1000m opened Cottage Attached Within 300m Within 1000m opened Cottage Detached $? %? Within 300m $ 142,000 $ 262,000 $ 275,000 $ 349,500 $ 710,000 $ 568, % Within 1000m $ 140,000 $ 250,000 $ 275,000 $ 340,000 $ 650,123 $ 510, % Within 300m %? 85% 5% 27% 103% Within 1000m %? 79% 10% 24% 91% Cottage Attached $? %? Within 300m $ 937,500 $ Within 1000m $ 155,000 $ 260,000 $ 301,500 $ 338,500 $ 471,428 $ 316, % Within 300m %? Within 1000m %? 68% 16% 12% 39% Detached properties within 300m of Cottage had very similar values to properties within 1,000m. The limited data for attached units indicates a higher value within 300m however this does not reveal a trend due to the absence of any sales evidence (grey shade). The Cottage Hospice opened in 1999 and it had no noticeable impact on area property values. 7

8 $1,000,000 $900,000 $800,000 $700,000 $600,000 $500,000 $400,000 $300,000 $200,000 $100,000 $ Mays Place Detached Within 300m Within 1000m opened $1,000,000 $900,000 $800,000 $700,000 $600,000 $500,000 $400,000 $300,000 $200,000 $100,000 $ Mays Place Attached opened Within 300m Within 1000m Mays Place Detached $? %? Within 300m $ 145,000 $ 179,000 $ 300,000 $ 155, % Within 1000m $ 99,000 $ 210,000 $ 245,000 $ 301,000 $ 577,000 $ 478, % Within 300m %? 68% Within 1000m %? 112% 17% 23% 92% Mays Place Attached $? %? Within 300m $ 185,295 $ 299,000 $ 352,000 $ 675,000 $ 675, % Within 1000m $ 89,673 $ 163,800 $ 190,000 $ 300,000 $ 526,900 $ 437, % Within 300m %? 61% 18% 92% Within 1000m %? 83% 16% 58% 76% Before 1990 when May s Place opened, detached properties within 300m had values higher than properties within 1000m but this reversed after Attached properties within 300m had higher values for all periods. May s Place had no noticeable impact on area property values. Missing sales data is shown in grey shade. 8

9 $1,000,000 $900,000 $800,000 $700,000 $600,000 $500,000 $400,000 $300,000 $200,000 $100,000 $ Salvation Army Detached Richmond Within 300m Within 1000m Salvation Army Attached Richmond Within 300m Within 1000m Salvation Army Detached $? %? Within 300m $ 156,000 $ 268,500 $ 272,800 $ 300,000 $ 703,800 $ 547, % Within 1000m $ 160,000 $ 300,000 $ 290,000 $ 397,000 $ 770,000 $ 610, % Within 300m %? 72% 2% 10% 135% Within 1000m %? 88% 3% 37% 94% Salvation Army Attached $? %? Within 300m $ 412,800 $ 568,000 $ 568,000 38% Within 1000m $ 109,000 $ 170,000 $ 194,000 $ 338,800 $ 468,571 $ 359,571 38% Within 300m %? 38% Within 1000m %? 56% 14% 75% 38% Since the Salvation Army Hospice in Richmond opened in 2005 detached properties within 300m had comparable or slightly lower values than properties within 1000m. For attached properties over the past two periods values within 300 m were higher. This hospice has had no noticeable impact on area property values. Missing data is shown in grey shade. 9

10 Results Summary Based on a review of the property value data for multiple periods in areas surrounding four hospice sites in Vancouver and Richmond, the analysis has determined that there is no relationship between the hospice and residential property values in the area. In addition, no impact on area property values was discerned in the period immediately following the year the hospice opened. By way of comparison, the average detached and attached housing prices for the City of Vancouver for the same period are shown in the following figure. Property values for the region, the city, and the study sites all increased substantially over the 1986 to 2010 period. For the City of Vancouver, detached values increased by 343% and attached values by 247%. For the four study sites, the value increases varied, but detached units were generally in the % range for this 25 year period. Vancouver Detached and Attached $1,000,000 $900,000 Detached $800,000 $700,000 Attached $600,000 $500,000 $400,000 $300,000 $200,000 $100,000 $ Vancouver $ % Detached $ 185,000 $ 330,000 $ 363,000 $ 439,000 $ 818,867 $ 633, % Attached $ 167,000 $ 245,000 $ 262,000 $ 339,900 $ 580,000 $ 413, % Detached % 78% 10% 21% 87% Attached % 47% 7% 30% 71% 10

11 Conclusion Based on this analysis and review, there is no relationship between the development of a hospice on a specific site and residential property values in the surrounding area. There has been no financial impact in the past and thus no financial impact is expected due to the proposed UBC facility. If you have any questions or require further information, please contact the undersigned. Sincerely, Richard Wozny Site Economics Ltd. 11

12 APPENDIX 1 - Metro Vancouver Hospice Inventory Vancouver: 1. May s Place (St. James and VCH), 6 beds, primarily for residents of the DTES* Address: 333 Powell Street, Vancouver Year/Month Opened: October Cottage (St. James and VCH), 10 beds* Address: 650 North Penticton Street, Vancouver Year/Month Opened: May Marian (Providence Health), 12 beds (not a home hospice floor in hospital converted) Address: 900 W. 12th Avenue, Vancouver Opened: December Vancouver Hospice Society Hospice Home (to be built): Granville Street (Vancouver Hospice Society). 6 Beds* Address: 4615 Granville Street, Vancouver Opened: TBA 5. Canuck Place* Address: 1690 Matthews Avenue Vancouver, BC Canada V6J 2T2 Opened: November 1995 Burnaby: 6. St Michaels (Fraser Health), 16 beds Address: 7451 Sussex Avenue, Burnaby V5J 5H3 Opened: May 2002 (hospice floor opened) Note: St Michels (extended care) Centre opened July Tri-cities: 7. Cross Roads Inlet Centre Hospice (Fraser Health), 10 beds Address: 4th Floor, 101 Noons Creek Drive Port Moody, B.C. V3H 5J1 Opened:

13 Richmond: 8. Salvation Army Rotary Richmond Hospice,10 beds* Address: 6460 No 4 Road, Richmond, BC V6Y 2S9 Opened: September 2005 North Vancouver: 9. The North Shore Hospice,15 beds* Address: 319 East 14th Street, North Vancouver, BC V7M 1P6 Opened: 2010 * These hospices are not connected to a hospital or long term care facility 13

14 Appendix 2 Real Estate Values Data Column Labels Row Labels Sum of Count Sum of Median Sum of Count Sum of Median Sum of Count Sum of Median Sum of Count Sum of Median Sum of Count Sum of Median Canuck Place $920, $1,815, $1,770, $2,020, $3,911, $699, $1,244, $1,475, $1,607, $2,878,000 Cottage $142, $262, $1,212, $349, $710, $295, $510, $576, $678, $1,121,551 Mays Place $145,000 2 $185,295 3 $2,849,000 8 $531,000 7 $975, $188, $373, $435, $601, $1,103,900 Salvation Army Rotary $156, $268, $272, $712, $1,271, $269, $470, $484, $735, $1,238,571 Vancouver $352, $575, $625, $778, $1,398,867 14

15 Appendix 3 - Assumptions & Limiting Conditions This market, economic, land use or development report / study has been prepared at the request of the client for the purpose of providing an estimate of economic feasibility or impact, development strategy or range of possible market values. It is not reasonable for any person other than the person or those to whom this report is addressed to rely upon this without first obtaining written authorization from the client and the author of this report. This report has been prepared on the assumption that no other person will rely on it for any other purpose and all liability to all such persons is denied. This report has been prepared at the request of the client, and for the exclusive (and confidential) use of the recipient as named herein and for the specific purpose and function as stated herein. The client has provided much of the site information and has represented that such material, such as ownership, rents, size, etc. is reliable. All copyright is reserved to the author and this report is considered confidential by the author and the client. Possession of this report, or a copy thereof, does not carry with it the right to reproduction or publication in any manner, in whole or in part, nor may it be disclosed, quoted from or referred to in any manner, in whole or in part, without the prior written consent and approval of the author as to the purpose, form and content of any such disclosure, quotation or reference. Without limiting the generality of the foregoing, neither all nor any part of the contents of this report shall be disseminated or otherwise conveyed to the public in any manner whatsoever or through any media whatsoever or disclosed, quoted from or referred to in any report, financial statement, prospectus, or offering memorandum of the client, or in any documents filed with any governmental agency without the prior written consent and approval of the author as to the purpose, form and content of such dissemination, disclosure, quotation or reference. If an estimate of economic, market or financial value of the real property / subject site which is assessed in this report is provided then it pertains to the approximate and general range of possible values of the freehold or fee simple, or leasehold or leased fee estate in the real property, based on vacant possession or subject to terms and conditions of the existing tenancy as described in this report. The property rights exclude mineral rights, if any. An estimate of economic, market or financial value, if any, contained in this report is founded upon a thorough and diligent examination and analysis of information gathered and obtained from numerous sources. Certain information has been accepted at face value; especially if there was no reason to doubt its accuracy. Other empirical data required interpretive analysis pursuant to the objective of this report. Certain inquiries were outside the scope of this mandate. In addition any economic or financial estimates in this report are approximations only and may vary from final and actual market values. For these reasons, the analyses, opinions and conclusions contained in this report are subject to the following contingent and limiting conditions. The property has been assessed on the basis that title to the real property is good and marketable. The author of this report cannot accept responsibility for legal matters, questions of survey, opinions of title, hidden or unapparent conditions of the property, toxic wastes or contaminated materials, soil or subsoil conditions, environmental, engineering or other technical matters which might render this property more or less valuable than as stated herein. If it came to our attention as the result of our investigation and analysis that certain problems may exist, a cautionary note has been entered in the body of the report. 15

16 The legal description of the property and the area of the site were obtained from sources which are deemed to be reliable. Further, the plans and sketches contained in this report are included solely to aid the recipient in visualizing the location of the property, the configuration and boundaries of the site and the relative position of the improvements on the said lands. The property, if any, has been described on the basis that the real property is free and clear of all value influencing encumbrances, encroachments, restrictions or covenants except as any be noted in this report and that there are no pledges, charges, lien or social assessments outstanding against the property other than as stated and described herein. The property if any, has been described on the basis that there are no outstanding liabilities except as expressly noted herein, pursuant to any agreement with a municipal or other government authority, pursuant to any contract or agreement pertaining to the ownership and operation of the real estate or pursuant to any lease or agreement to lease, which may affect the stated value or saleability of the subject property or any portion thereof. The interpretation of any leases and other contractual agreements, pertaining to the operation and ownership of the property, as expressed herein, is solely the opinion of the author and should not be construed as a legal interpretation. Further, any summaries of these contractual agreements, which may appear in the Addenda, are presented for the sole purpose of giving the reader an overview of the salient facts thereof. The property, if any, has been described on the basis that the real property complies in all material respects with any restrictive covenants affecting the site and has been built and is occupied and being operated, in all material respects, in full compliance with all requirements of law, including all zoning, land use classification, building, planning, fire and health by-laws, rules, regulations, orders and codes of all federal, provincial, regional and municipal governmental authorities having jurisdiction with respect thereto. (It is recognized there may be work orders or other notices of violation of law outstanding with respect to the real estate and that there may be certain requirements of law preventing occupancy of the real estate as described in this report. However, such possible circumstances have not been accounted for in the reporting process.) Investigations have been undertaken in respect of matters which regulate the use of land. However, no inquiries have been placed with the fire department, the building inspector, the health department or any other government regulatory agency, unless such investigations are expressly represented to have been made in this report. The subject property must comply with such regulations and, if it does not comply, its non-compliance may affect the market value of this property. To be certain of such compliance, further investigations may be necessary. The property, if any, has been assessed and possibly valued in a general analysis on the basis that all rents referred to in this report are being paid in full and when due and payable under the terms and conditions of the attendant leases, agreements to lease or other contractual agreements. Further, it is assumed that all rents referred to in this report represent the rental arrangements stipulated in the leases, agreements to lease or other contractual agreements pertaining to the tenants' occupancy, to the extent that such rents have not been prepaid, abated, or inflated to reflect extraordinary circumstances, and are fully enforceable notwithstanding that such documentation may not be fully executed by the parties thereto as at the date of this reporting, unless such conditions have been identified and noted in this report. 16

17 The data and statistical information contained herein were gathered from reliable sources and are believed to be correct. However, these data are not guaranteed for accuracy, even though every attempt has been made to verify the authenticity of this information as much as possible. Any estimated economic or market or financial value does not necessarily represent the value of the underlying shares, if the asset is so held, as the value of the shares could be affected by other considerations. Further, the estimated market value if any does not include consideration of any extraordinary market value of the property, unless the effects of such special conditions, and the extent of any special value that may arise therefrom, have been described and measured in this report. Should title to the real estate presently be held (or changed to a holding) by a partnership, in a joint venture, through a co-tenancy arrangement or by any other form of divisional ownership, the value of any fractional interest associated therewith may be more or less than the percentage of ownership appearing in the contractual agreement pertaining to the structure of such divisional ownership. In the event of syndication, the aggregate value of the limited partnership interests may be greater than the value of the freehold or fee simple interest or leasehold interest in the real property, by reason of the possible contributory value of non-realty interests or benefits such as provision for tax shelter, potential for capital appreciation, special investment privileges, particular occupancy and income guarantees, special financing or extraordinary agreements for management services. Should the author of this report be required to give testimony or appear in court or at any administrative proceeding relating to this report, prior arrangements shall be made therefore, including provisions for additional compensation to permit adequate time for preparation and for any appearances which may be required. However, neither this nor any other of these contingent and limiting conditions is an attempt to limit the use that might be made of this report should it properly become evidence in a judicial proceeding. In such a case, it is acknowledged that it is the judicial body which will decide the use of this report which best serves the administration of justice. Because market conditions, including economic, social and political factors, change rapidly and, on occasion, without notice or warning, the estimate of market value expressed herein, as of the effective date of this report, cannot necessarily be relied upon as any other date without the subsequent advice of the author of this report. All macro economic data has been obtained from reliable sources however major changes in the economy are possible which could move entire markets and a reported value, if any, would move up or down with that market. The report typically assumes stable background economic conditions. If any economic, market or financial value or measure has been expressed herein it is in Canadian dollars. 17

18 APPENDIX 4 SITE ECONOMICS LTD RESUME Richard Wozny, Principal Experience Richard has conducted over 450 development and financial studies of shopping centres and commercial districts. He has worked on the development of thousands of acres of residential and industrial projects, and over 400 store location and feasibility studies for retailers. Richard combines a creative and worldly project vision with pragmatic and detailed analysis. Past Employment Richard s past work experience includes: Vice President and Manager of Advisory Services, Cushman & Wakefield LePage Inc., from 2000 to 2009; Principal, Site Economics Ltd., from 1990 to 2000; Manager of Retail Development for Western Canada, Marathon Realty Company Ltd., from 1987 to 1990; and Senior Consultant for Shopping Centre Developments, Thomas Consultants Inc., from 1984 to Education Richard completed a Masters Degree in Regional Science at the University of Pennsylvania, Philadelphia, PA, in 1984, a Masters Degree in Religion at Temple University, Philadelphia, PA, in 1982, and a Bachelors Degree in Philosophy at the University of British Columbia, Vancouver, BC, in Strategic Real Estate Services Market Analysis Proforma / Discounted Cash Flows Financial Analysis and Site Valuation Property Acquisition and Disposition Strategies Highest and Best Use Studies Strategic Review of Redevelopment Options Development Feasibility Studies Shopping Centre / Downtown Revitalization Development Strategies & Optimization Market Impact Studies for Major Developments Supply and Demand Assessments Market Input for Land Use Planning Absorption and Price Assessments for Major Developments Site Selection and Location Assessment for Retailers and Landowners Site Economics Ltd. Suite West Georgia Street Vancouver, BC V7Y 1C6 Canada tel: / fax: rwozny@siteeconomics.com / website: 18