Sub Market Report. Vancouver West Side MULTIFAMILY

Transcription

1 MULTIFAMILY Sub Market Report Vancouver West Side Jones Lang LaSalle Real Estate Services, Inc. 14th Floor Burrard Street, Vancouver, BC, V6C 2G6 1 Copyright 2018 Jones Lang LaSalle IP, Inc. All rights reserved.

2 Sub Market Insights JLL Multifamily BC presents its second Sub-Market Report focused on Vancouver s West Side, encompassing the neighbourhoods of Fairview, Kerrisdale, Kitsilano, and Marpole. In 2017 the number of apartment building transactions and their dollar volume is down from a banner year in 2016, but this hasn t restrained the median price per residential unit on the West Side which grew another 16% to 488,800. Furthermore, the average cap rate compressed 20 basis points further to 2.37%, which is a record low for this metric. The respective neighbourhoods in the West Side each share a similar story, with the exception of Kerrisdale, true to its tenure, changing very little year over year. The volume of transactions, median price per unit, and average cap rate remain nearly unchanged compared to Focusing on Kitsilano, which historically is one of Vancouver s most popular rental neighbourhoods, especially for the younger demographic of rental tenants, the median price per unit increased by nearly 150,000 from 2016 to Concurrently, and unique to Kitsilano compared to other neighbourhoods, the average cap rate increased. This market shift is primarily due to a relatively high sale volume (four different transactions) of turnkey buildings with stabilized market rental revenue in place. This shift is reflected in the overall average cap rate of 3.19%. Massive price per unit values metrics were achieved for these stabilized assets, such as 771,429/unit for the JLL transaction at 2200 W 5th Avenue that also offered a cap rate of 3.71%, proving that turn-key properties are very cap rate driven and the price per unit metric is less relevant to market investors. The Fairview neighbourhood benefits from a strategically central location, with a dense concentration of apartment buildings often sitting on large high-rise designated lots. Several owners in Fairview have long been waiting for a ripe political environment 2 to redevelop these under densified properties to their highest and best use by unlocking the latent land value. There is also hype surrounding the Broadway SkyTrain extension of the Millennium Line which intensified in 2017 pursuant to provincial and federal budget allocation being committed to the project over the next 11 years. This has further added fuel to the land speculation flame seeing per unit values rise dramatically, especially for low rise wood-frame buildings in strategic locations. Correspondingly Fairview holds the region s lowest average cap rate of 2.13%. Overall, across Vancouver s West Side cap rates have steadily been compressing over the past five years, while systematically the median price per unit has been rising. This trend, as shown in the graph on the following page, has been led by falling interest rates, which were at historical lows in 2016, but in 2017 the feds kicked the trend with their strategic agenda to gradually and gently raise interest rates. Does this mean cap rates have bottomed out? We would love to hear your thoughts, and look forward to connecting with you to discuss the topic. PATRICK MCEVAY* Vice President T E patrick.mcevay@am.jll.com JAMES BLAIR* Vice President T E james.blair@am.jll.com *Personal Real Estate Corporation DAVID VENANCE* Vice President T E david.venance@am.jll.com CHRIS HAYNE Sales Associate T E chris.hayne@am.jll.com Sources: RealNet, Commercial Edge, CLS, BC Assessments, and information gained by JLL that we deem reliable. E&OE: The information contained herein was obtained from sources which we deem reliable, and while thought to be correct, is not guaranteed. Statistics include data collected on transactions of dedicated rental properties with five or more units. Development site transactions are excluded from the calculation of the average price per unit and cap rate.

3 Vancouver West Side Statistics 3.50% 1.50% 500, % 1.20% 400,000 INTEREST RATE 2.50% 0.90% 300,000 CAP RATE 2.00% 0.60% 200, TOTAL TOTAL OF MEDIAN PRICE PER UNIT AVERAGE CAP RATE CMHC VACANCY RATE ,794, , % 1.30% ,567, , % 1.00% Sources: RealNet, Commercial Edge, CLS, BC Assessments, and information gained by JLL that we deem reliable. E&OE: The information contained herein was obtained from sources which we deem reliable, and while thought to be correct, is not guaranteed.

4 Vancouver West Side Geographical Areas NEIGHBOURHOOD STATS WEST 4TH AVENUE WEST 16TH AVENUE WEST 33RD AVENUE KITSILANO MACDONALD STREET ARBUTUS STREET WEST BROADWAY FAIRVIEW MEDIAN PRICE PER UNIT KITSILANO 597, % FAIRVIEW AVERAGE CAP RATE 544, % SOUTH WEST MARINE DRIVE KERRISDALE GRANVILLE STREET OAK STREET CAMBIE STREET WEST 41ST AVENUE WEST 49TH AVENUE KERRISDALE 469, % MARPOLE 355, % WEST 57TH AVENUE WEST 70TH AVENUE MARPOLE 4

5 Neighbourhood Breakdown Fairview South Granville, Cambie Village, & Shaughnessy TOTAL TOTAL OF MEDIAN PRICE PER UNIT AVERAGE CAP RATE CMHC VACANCY RATE ,333, , % 0.70% ,714, , % 0.70% Sources: RealNet, Commercial Edge, CLS, BC Assessments, and information gained by JLL that we deem reliable. E&OE: The information contained herein was obtained from sources which we deem reliable, and while thought to be correct, is not guaranteed.

6 Fairview ADDRESS SALE DATE SALE PRICE UNITS OR LOT SIZE PRICE/ UNIT or LOT SIZE YEAR BUILT EGI CAP RATE West Broadway OM Feb-17 9,500,000 6,250 sf 1, Sold as a Development Site West 11th Avenue Mar-17 12,500, , , % Oak Street ST May-17 21,500,000 18,753 sf 1, Sold as a Development Site West 12th Avenue Jun-17 7,500, , , % West 13th Avenue Jun-17 4,900, , N/A 2.64% West 12th Avenue HR Jul-17 22,818, , , % West 12th Avenue Jul-17 5,250, , , % West 10th Avenue Jul-17 4,996, , , % Cambie Street Nov-17 10,200, , , % West 15th Avenue HR Nov-17 14,600, , , % Oak Street CO Dec-17 15,950, , N/A N/A WEST 6TH AVENUE WEST BROADWAY MACDONALD STREET ARBUTUS STREET CAMBIE STREET WEST 16TH AVENUE GRANVILLE STREET 11 OAK STREET 9 6 Development Site SP Share Purchase TH Townhouse MU Mixed-Use MF Multifamily OM Off Market CO Co-Op ST Strata HR High-Rise N/A Not Available Denotes Sales by JLL

7 Neighbourhood Breakdown Kerrisdale TOTAL TOTAL OF MEDIAN PRICE PER UNIT AVERAGE CAP RATE CMHC VACANCY RATE 7 89,848, , % 2.00% 6 98,730, , % 1.50% Sources: RealNet, Commercial Edge, CLS, BC Assessments, and information gained by JLL that we deem reliable. E&OE: The information contained herein was obtained from sources which we deem reliable, and while thought to be correct, is not guaranteed.

8 Kerrisdale ADDRESS SALE DATE SALE PRICE UNITS OR LOT SIZE PRICE/ UNIT or LOT SIZE YEAR BUILT EGI CAP RATE Vine Street Feb-17 8,230, , N/A 1.90% West 43rd Avenue Feb-17 4,400, , , % Yew Street SP HR Mar-17 40,000, , ,500, % Balsam Street May-17 15,500, , , % East Blvd Jun-17 26,000,000 18,731 sf 1, Sold as Development Site West 40th Avenue Jun-17 4,600, , , % East Boulevard Nov-17 11,508,600 9,360 sf 1, Sold as Development Site WEST 33RD AVENUE WEST BOULEVARD MACDONALD STREET SOUTH WEST MARINE DRIVE GRANVILLE STREET OAK STREET WEST 41ST AVENUE CAMBIE STREET WEST 49AVENUE 8 Development Site SP Share Purchase TH Townhouse MU Mixed-Use MF Multifamily OM Off Market CO Co-Op ST Strata HR High-Rise N/A Not Available Denotes Sales by JLL

9 Neighbourhood Breakdown Kitsilano TOTAL TOTAL OF MEDIAN PRICE PER UNIT AVERAGE CAP RATE CMHC VACANCY RATE ,265, , % 1.20% ,373, , % 0.70% Sources: RealNet, Commercial Edge, CLS, BC Assessments, and information gained by JLL that we deem reliable. E&OE: The information contained herein was obtained from sources which we deem reliable, and while thought to be correct, is not guaranteed.

10 Kitsilano ADDRESS SALE DATE SALE PRICE UNITS OR LOT SIZE PRICE/ UNIT or LOT SIZE YEAR BUILT EGI CAP RATE Alma Street & 3675 West 5th Avenue MU Mar-17 11,280,000 9,604 sf 1, Sold as Development Site West 8th Avenue May-17 18,500, , , % West 7th Avenue MF May-17 3,850, , , % Cypress Street SP Jun-17 9,580, , , % West 7th Avenue Jul-17 4,888, , , % West 5th Avenue Aug-17 5,400, , , % Maple Street Aug-17 5,200, , N/A N/A West 1st Avenue Sep-17 10,500, , , % Arbutus Street CO Sep-17 7,600, , N/A N/A West 1st Avenue MF Oct-17 3,250, , , % West Broadway SP Oct-17 12,125,000 6,250 sf 1, Sold as a Development Site Cornwall Avenue Nov-17 7,400, , , % West 2nd Avenue SP OM Nov-17 14,300, , , % West 8th Avenue OM Nov-17 8,500, , N/A N/A CORNWALL AVENUE ALMA STREET 19 WEST 4TH AVENUE WEST BROADWAY WEST 12TH AVENUE MCDONALD STREET ARBUTUS STREET BURRARD STREET GRANVILLE STREET 10 Development Site SP Share Purchase TH Townhouse MU Mixed-Use MF Multifamily OM Off Market CO Co-Op ST Strata HR High-Rise N/A Not Available Denotes Sales by JLL

11 Neighbourhood Breakdown Marpole TOTAL TOTAL OF MEDIAN PRICE PER UNIT AVERAGE CAP RATE CMHC VACANCY RATE 13 86,348, , % 0.60% 5 21,750, , % 0.80% Sources: RealNet, Commercial Edge, CLS, BC Assessments, and information gained by JLL that we deem reliable. E&OE: The information contained herein was obtained from sources which we deem reliable, and while thought to be correct, is not guaranteed.

12 Marpole ADDRESS SALE DATE SALE PRICE UNITS OR LOT SIZE PRICE/ UNIT or LOT SIZE YEAR BUILT EGI CAP RATE Montcalm Street Jan-17 4,000, , , % Montcalm Street Jan-17 3,100, , N/A N/A Selkirk Street Jun-17 3,550, , , % Hudson Street Jul-17 3,800, , , % Oak Street OM Sep-17 7,300, , N/A 3.07% GRANVILLE STREET WEST 70TH AVENUE OAK STREET 37 SOUTH WEST MARINE DRIVE 12 Development Site SP Share Purchase TH Townhouse MU Mixed-Use MF Multifamily OM Off Market CO Co-Op ST Strata HR High-Rise N/A Not Available Denotes Sales by JLL

13 2017 Vancouver West Side Sales 1616 WEST BROADWAY Feb-17 9,500,000 Size 6,250 sf Built WEST 11TH AVENUE 1, ,963 12,500,000 EGI 375,738 Cap 2.14% Units 27 Built OM 2 Mar OAK STREET May-17 21,500,000 Size 18,753 sf Built WEST 12TH AVENUE 1,146 Jun-17 ST WEST 13TH AVENUE Jun-17 4,900,000 Units 9 Built WEST 12TH AVENUE 544,444 EGI N/A Cap 2.64% 475,375 22,818,000 EGI 667,625 Cap 1.83% Units 48 HR Built Jul WEST 12TH AVENUE Jul-17 7 Jul-17 9 Development Site SP Share Purchase Nov-17 TH Townhouse 4,996,500 Units 9 Built WEST 15TH AVENUE 768,421 14,600,000 EGI 494,844 Cap 2.56% Units 19 HR Built 1965 MU Mixed-Use 555,167 EGI 137,202 Cap 1.96% 8 463,636 10,200,000 EGI 299,830 Cap 2.10% Units 22 Built ,000 EGI 130,209 Cap 1.71% 3819 CAMBIE STREET JLL SALE 1225 WEST 10TH AVENUE 5,250,000 Units 10 Built ,923 EGI 205,726 Cap 2.06% 7,500,000 Units 13 Built MF Multifamily 10 OM Off Market CO Co-Op ST Strata Nov-17 HR High-Rise N/A Not Available Denotes Sales by JLL

14 2017 Vancouver West Side Sales 3591 OAK STREET Dec VINE STREET 613,462 15,950,000 EGI N/A Cap N/A Units 26 CO Built Feb-17 8,230,000 Units 21 Built WEST 43RD AVENUE Feb-17 4,400,000 Units 9 Built YEW STREET 488,889 EGI 137,549 Cap 2.27% 481,928 40,000,000 EGI 1,500,000 Cap 2.69% Units 83 HR SP Built Mar BALSAM STREET JLL SALE May Jun-17 Jun-17 26,000,000 Size 18,731 sf Built ,600,000 Units 10 Built ,000 EGI 131,323 Cap 1.99% Nov-17 Mar-17 11,280,000 Size 9,604 sf Built Development Site SP Share Purchase TH Townhouse 1,175 MU MU Mixed-Use 393,617 18,500,000 EGI 678,262 Cap 2.60% Units 47 Built MF Multifamily 1, WEST 8TH AVENUE 19 11,508,600 Size 9,360 sf Built ALMA ST & 3675 W 5TH AVE 1, EAST BOULEVARD 2181 WEST 40TH AVENUE JLL SALE 6020 EAST BOULEVARD 469,697 15,500,000 EGI 552,625 Cap 2.43% Units 33 Built ,905 EGI N/A Cap 1.90% OM Off Market CO Co-Op ST Strata May-17 HR High-Rise N/A Not Available Denotes Sales by JLL

15 2017 Vancouver West Side Sales 2275 WEST 7TH AVENUE May ,000 EGI 108,277 Cap 2.23% 3,850,000 Units 5 Built CYPRESS STREET MF Jul-17 4,888,000 Units 10 Built Aug ,800 EGI 128,900 Cap 1.95% Aug-17 5,200,000 Units 10 Built ,400,000 Units 7 Built WEST 1ST AVENUE 520,000 EGI N/A Cap N/A 807,692 10,500,000 EGI 403,175 Cap 3.43% Units 13 Built Sep ARBUTUS STREET Sep-17 7,600,000 Units 10 Built ,000 EGI N/A Cap N/A CO Oct-17 Oct-17 12,125,000 Size 6,250 sf Built ,250,000 Units 7 Built Development Site SP Share Purchase TH Townhouse MF 2268 CORNWALL AVENUE 1,940 Nov-17 SP MU Mixed-Use 30 MF Multifamily OM Off Market CO Co-Op ST Strata HR High-Rise 672,727 EGI 206,525 Cap 2.17% 7,400,000 Units 11 Built ,286 EGI 130,488 Cap 3.36% 1876 WEST BROADWAY 3536 WEST 1ST AVENUE 771,429 EGI 220,200 Cap 3.71% SP 2200 WEST 5TH AVENUE JLL SALE 1925 MAPLE STREET 598,750 EGI 374,139 Cap 3.19% 9,580,000 Units 16 Built 1911 Jun WEST 7TH AVENUE N/A Not Available Denotes Sales by JLL

16 2017 Vancouver West Side Sales 1968 WEST 2ND AVENUE Nov ,833 14,300,000 EGI 586,185 Cap 3.42% Units 24 OM SP Built WEST 8TH AVENUE Nov-17 8,500,000 Units 20 Built MONTCALM STREET Jan-17 4,000,000 Units 12 Built ,333 EGI 119,580 Cap 2.14% Jan-17 Jun-17 3,100,000 Units 10 Built ,550,000 Units 10 Built HUON STREET 355,000 EGI 111,840 Cap 2.04% 310,000 EGI N/A Cap N/A 8691 SELKIRK STREET OM 8668 MONTCALM STREET 425,000 EGI N/A Cap N/A Jul-17 3,800,000 Units 10 Built ,000 EGI 137,725 Cap 2.76% 8580 OAK STREET Sep-17 7,300,000 Units 17 Built Development Site SP Share Purchase TH Townhouse 429,412 EGI N/A Cap 3.07% OM MU Mixed-Use MF Multifamily OM Off Market CO Co-Op ST Strata HR High-Rise N/A Not Available Denotes Sales by JLL