Brian Morton, Vancouver Sun
May 10, 2012
Lougheed Village includes four residential towers, a retail village and multi-level parkade.
One of Metro Vancouver’s largest multi-family rental complexes has sold in what’s being called the third biggest transaction of its type in B.C. history.
The deal, worth more than $80 million, involved the sale of Lougheed Village in northeast Burnaby, a mixed-use rental development built in 1973 that includes two 24-storey and two eight-storey residential buildings, a two-storey retail village, and a multi-level parkade, all on a three-hectare site.
It is home to 528 tenants, 21 commercial units and had gross rental income in 2011 of $7.4 million.
“This was the largest ever [sale] in Burnaby in terms of a purpose built [rental] property,” said apartment broker David Goodman, co-owner with his son Mark Goodman, of HQ Commercial Real Estate Services Inc., which conducted the transaction that closed April 30. “And it’s the third largest in B.C. history in terms of multi-family rental.”
Goodman said Wednesday that his client, Beach Properties, didn’t want to be more specific on the actual sale price, only that it sold for over $80 million.
The property, which was previously owned by several members of the Lougheed family, was listed for $100 million.
Goodman said he expects Beach Properties, which has a diverse portfolio of properties, will spend up to $20 million over the next several years renovating and modernizing the buildings, but that any rent increases should be minimal.
He noted that there’s no room for further densification on the site.
“They’ll bring in significant improvements to the [properties], but not disturb the status of tenants,” added Goodman. “They’ll bring it back to its former glory.
“They’re wonderful, responsible owners [and] the objective is to keep the buildings full. There’s no intention of encouraging vacancies. There may be justification for modest rent increases. They don’t push the envelope.”
Goodman said the purchase sends a message that rental buildings are good investments, especially those like Lougheed Village that are near the SkyTrain line.
He said the property is in a great suburban community and that, as the Lougheed Town Centre expands, the whole area will become more desirable.
He also noted that the new supply of rentals hasn’t caught up with demand and that a multi-family property is a very stable investment, particularly with today’s lower mortgage rates.
“There’s low vacancy rates [there] and there’s a large body of the population that opts for rentals. Either they can’t afford [to buy] or they prefer renting because they want to use their money for something other than ownership.”
Goodman said vacancy rates in the area are running in the one-to-1.5-per cent range and that rental apartments are generally larger than nearby condo suites up for rent.
“Although they [rental condos] are new and gorgeous, they’re quite small. And rents are high.”
At Lougheed Village, Goodman noted, the average rent for one-bedroom 750-square-foot suites is $915. For a two-bedroom 1,000-square-foot suite, that rises to $1,200, and for a three-bedroom 1,200-square-foot, the average rent is $1,600.
He said the two biggest sales of rental properties in B.C., both in 2009, were Langara Gardens in southwest Vancouver for $157 million, and Beach Towers in the city’s west end for $117 million.
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