Monday, May 9, 2011
Commercial property owners across Metro Vancouver typically pay a far larger share of property taxes
In the City of Vancouver, the situation had reached the point where eight per cent of all properties (commercial) paid more than 50 per cent of the property taxes, explains Bob Laurie, cochair of the Vancouver Fair Tax Coalition (VFTC).
In 2009, the VFTC successfully convinced Vancouver City Council to approve a one per cent tax shift to residential properties from non-residential properties.
Since then, the City of Vancouver has shifted property tax by one per cent each year to residential from commercial, a gradual correction of the long-standing inequity. Laurie estimates savings for Vancouver businesses include:
- a tax reduction of $155 for a business property valued at $783,000; and
- a collective saving of more than $5.5 million each year.
Attracting investment, jobs and workers
To attract investment, local governments throughout the Real Estate Board area are rezoning to create denser, walkable, lively urban hubs close to transit.
Who are they trying to attract? Talented younger adults ages 25 – 29 and known as the Millennials, who are well-educated and highly skilled, and much-needed in our knowledge-based economy.
"It’s part of the shift in our local labour market as baby-boomers age and retire," says Andrew Ramlo, Executive Director at Urban Futures Inc. And they're having a significant effect on the future prosperity of our communities.
Where do the Millennials want to live? “Downtown,” says Ramlo.
To attract and retain the Millennials, cities throughout the Lower Mainland are rethinking former approaches to planning for economic development.
What Millennials like most, explains Ramlo are higher density, mixed use, walkable, green, lively neighbourhoods with businesses, restaurants, transit and parks just steps away.
A closer look at the downtown area of Vancouver reveals the effect of the Millennials - even taking into account that between 15 and 20 per cent of buyers in the downtown area are retirees and empty nesters who have sold larger properties and are moving back downtown.
What happens as downtown residents age? After age 35, when babies have grown to toddlers, they are more likely to move to suburban locations, according to Ramlo, but they also still want their neighbourhoods to have a vibrant urban feel and be walkable, interesting and attractive.
A tale of two downtowns – it goes both ways
- No. of workers who live in Richmond and work in Vancouver: 18,530
- No. of workers who live in Vancouver and work in Richmond: 22,880
Urban workplace = recruiting tool
What happens when a company wants to move downtown, but the neighbourhood is faded – the opposite of the urban vibrancy so popular with the Millenials?
Some companies like Telus create their own neighbourhood. Although the zoning still requires approval, Telus plans to relocate its national headquarters downtown in a one million square foot, $750 million project that will revitalize a fading block of prime real estate bordered by Georgia, Robson, Seymour and Richards Streets.
The proposed Telus Garden will include:
- 500,000 square feet of new office space in a 22-storey tower for multiple tenants built to the new 2009 Leadership in Energy and Environmental Design (LEED) Platinum standard; and
- 500 new residential units in a 44-storey tower, built to the LEED Gold standard which will be one of the highest buildings in Vancouver and include retail and a wellness centre with a meditation room.
"Our vision is a beautiful and unique location where leading-edge technology, urban living, environmental sustainability and tomorrow’s work styles are integrated into a vibrant community”, says Darren Entwistle, TELUS president and CEO.
The development will consume 30 per cent less energy, making Telus a significant contributor to Vancouver's goal of becoming the greenest city in the world.
It will also feature 10,000 square feet of green roofs providing organic produce for local restaurants, two elevated roof forests, British Columbia artwork, LED lighting projecting programmable coloured images onto glass, and media walls where cultural events such as symphony concerts can be broadcast.
The project’s construction will inject a much-needed hundreds of millions of dollars into our local economy and create three million person-hours of employment during construction, scheduled to begin this fall and be complete in 2015, according to Entwistle.
Once occupied, the site's business and residential tenants will contribute up to $10 million annually in new tax revenue to the city.
With more than 100 restaurants, the seawall, an aquatic centre and upscale retail shops and groceries within blocks, it’s clear Telus has made talent attraction and retention a key part of its business strategy.
source: Realty Link in print.
Friday, April 29, 2011
Forecasts keeps buyers sidelined and prices in check for commercial real estate in 2011
Recovery on the economic front will go hand in hand with retail and office investment in 2011, as developers cautiously brush off plans for towers downtown and improved housing starts boost demand in the suburbs for retail projects.
But this year will be characterized by hard bargaining on prices and incentives as doubts remain about the depth and speed of the economic recovery.
While Metro Vancouver retail remains "the most sought-after property type" in Canada, according to a third-quarter report by Avison Young, sales tallies are off across the board from the second quarter as activity slowed in the second half of 2010 to the lowest level since the first quarter of 2009.
Overall investment sales totalled $527.3 million in the third quarter of 2010, including $68.8 million worth of office deals and $143.7 million worth of retail sales.
Those deals include South Surrey's South Point Exchange, which sold to a private investor for $91 million, and Bosa Development Corp.'s sale of Semiahmoo Shopping Centre to First Capital Realty Inc. for $82.7 million - both driven by strong growth in surrounding residential communities.
But the deals also highlight the shift from the bargain-taking deal-making that characterized the first half of the year to a strategic rejigging of portfolios in the second half that heralds more stable conditions as owners prepare for the long term.
Based on interviews in the third quarter, Colliers International reported that 61 per cent of investors were looking to expand their portfolios, down slightly from six months earlier when 65 per cent were looking to expand. On the other hand, approximately 22 per cent were looking to rebalance.
Close to two-fifths of respondents attributed the shift in emphasis to a desire to shift asset classes, while other key factors were linked to advantages to be gained from location, liquidity and leverage. Approximately 17 per cent were looking to trade up or trade down and 6 per cent were looking to increase leverage.
A further 28 per cent refused to disclose the reasons for rebalancing their portfolios, but the several factors point to a hunkering down for the long term in the face of lacklustre growth for the year ahead.
--excerpt from: Western Investor, January 2011
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