Vancouver mayor hails $200-million Credit Suisse office tower project for downtown financial district
TIFFANY CRAWFORD (VANCOUVER SUN) Vancouver Mayor Gregor Robertson helped break ground Thursday on a new $200-million, 31-storey Credit Suisse office tower in Vancouver’s financial district.
Robertson heralded the project as an end to the city’s business vacancy woes, as Vancouver remains one of North America’s tightest markets for office space.
Vancouver’s vacancy rate for class A office space is 5.3 per cent. That’s compared with 8.7 per cent in Montreal and 9.7 per cent in Edmonton. But according to commercial real estate specialists Cushman and Wakefield, Vancouver’s vacancy rate is projected to jump to 7.7 per cent this year and to 10.5 per cent in 2015.
The Exchange, which will be joined with the old Stock Exchange building at 475 Howe Street, built in 1929, will be the first LEED Platinum conversion of a heritage building in Canada. LEED Platinum is the highest designation for sustainable building design from the Canada Green Building Council.
It is the first B.C. venture for Credit Suisse and will provide 369,000 square feet of office space, or enough space for 1,700 workers.
Robertson said the tower will add much-needed office space in the downtown core and contribute to the city’s goal of becoming the greenest city in the world.
The six other office towers under construction are: Telus Garden at 448,000 square feet; 745 Thurlow at 365,000 square feet; 980 Howe at 250,000 square feet; The MNP Tower at 270,000 square feet; 725 Granville at 300,000 square feet; and Aqulini’s Tower at 180,000 square feet.
“When it comes to the strength of Vancouver’s office market, we’ve come a long way in the last five years,” Robertson said. “A few years ago our economy was being held back by a lack of space, we had a critical shortage, and it’s wonderful to see the market respond.”
He said the city has approved as much office space in the past four years as in the previous decade.
Until recently, the city was projecting a critical shortage of office space by 2031 if land-use policies remained the same. Robertson said new zoning bylaws enacted in 2009 helped get the new towers off the ground.
The seven new towers under construction downtown will provide 2.18 million square feet of new office space.
Robertson said Credit Suisse’s decision to build from the ground up in Vancouver signals that international corporations realize Vancouver is one of the strongest office markets in North America.
Franz Gehriger, CEO of SwissReal Group, said: “We are creating jobs in heart of Vancouver’s financial district and building one of the most sustainable workplaces in Canada.”
Renowned Swiss architect Harry Gugger, who is best known for the Tate Modern Gallery in London and Caixa Forum in Madrid, said he wanted to create a building that respects its immediate environment.
Gugger added that the old Stock Exchange building is “a refined and handsomely crafted building,” and said they tried to respect the heritage building as much as they could.
TARA PERKINS (GLOBE & MAIL) – Royal Bank of Canada, the country’s largest mortgage lender, has quietly cut some of its mortgage rates this weekend. The move appears to be part of a broader dip in rates, although economists generally still expect an increase in 2014.
Five-year fixed mortgage rates rose industry-wide for much of 2013, from their low of 2.64 per cent in April to their high of 3.39 per cent in September, according to Alyssa Richard, the chief executive officer of RateHub.ca. They edged down a bit later in the fall but had generally been steady at around 3.25 per cent since then.
RBC is now cutting its two-, three-, four– and five-year fixed mortgage rates each by 10 basis points. In an emailed statement, the bank said that some mortgage lenders have recently been pricing at lower rates, prompting it to move.
Royal Bank is often a price leader when it comes to mortgages, and other big banks frequently follow suit after it changes its prices. Its five-year fixed mortgage rate is now 3.69 per cent.
Mortgage prices tend to follow changes in five-year government bond yields because of the impact that those yields have on banks’ funding costs. The yield on five-year government of Canada bonds has fallen from 1.95 per cent on December 31st to 1.71 per cent on January 16th, according to Bank of Canada data, although it fluctuated during that time.
Canadian bond yields tend to follow U.S. bond yields. Yields began rising last May after U.S. employment numbers came in much better than expected, raising hopes for the U.S. economy. Then they shot up further after U.S. Federal Reserve chairman Ben Bernanke suggested the central bank could start tapering its asset-buying program, a signal that he thought the economy’s health was improving.
While the U.S. central bank has begun tapering, December jobs numbers and some other recent data have been disappointing, and caused bond yields to fall.
Most economists still expect that both yields and mortgage rates will tick up gradually through 2014, as the U.S. economy improves and the central bank continues to back off of its asset-buying program, known as quantitative easing.
But as Ms. Richard points out, it is possible that the U.S. economy will prove to be weaker than expected, and that could result in further decreases in bond yields and mortgage rates.
Royal Bank of Canada, which normally issues a press release when it changes its mortgage rates, made this move quietly, simply posting the new rates on its site. The news was reported this weekend by the blog Canadian Mortgage Trends.
Bank of Montreal dropped its five-year rate to 2.99 per cent early last year, spurring a price battle that angered Finance Minister Jim Flaherty. Mr. Flaherty has taken numerous steps, such as tightening the mortgage insurance rules, to prevent consumers from taking on too much mortgage debt. Policy-makers have been trying to warn consumers that, at some point, rates will rise.
HUFFINGTON POST, BC – The Vancouver real estate market continues to grow unabated, with the demand for single family homes particularly strong, according to a new report released Thursday by Sotheby’s International Realty Canada.
The luxury market (defined as properties sold for more than $4 million) is seeing sales growth of 50 per cent, year over year, president and CEO Ross McCredie told The Huffington Post B.C.
The statistics belie recurring talk of a housing bubble about to pop, McCredie says, with international “so-called experts” not understanding the very particular Vancouver market.
“In the last couple of years, we’ve had a lot of clients come to us and say, ‘Jeez, the Vancouver market is over-inflated. I want to sell my home and when the market corrects I’ll jump back into the market,’” McCredie says. “And that’s a scary proposition, because if you want to stay in the market and time the market, it’s a difficult thing to do.
“The so-called experts have been wrong for about seven years straight,” he notes. “Anybody who jumped out of the market at any point in the last couple of years, can’t get in any cheaper than when they sold; in fact, it’s gone up on them.”
The market for single family homes is the big news here, says McCredie, with the fall 2012 slump attributed to speculation that B.C. would see a change in government in last year’s provincial election. Now that uncertainty has passed, the prospect of continued low interest rates, continued foreign investment and the potential from industrial growth such as liquefied natural gas (LNG), leaves him confident that demand will continue to grow significantly.
On the city’s west side, the single family home in the above $4-million range continues to be sought after by a large number of mainland Chinese buyers, he said.
“These are second or third generation mainland Chinese buyers, they are not new to the market,” McCredie adds. ” I think there’s a misconception — especially in the residential side — that people are coming off a plane and buying real estate. That’s not what’s happening.
“What they are doing is buying more property as their families are expanding. They’ve been here 10, 15, 20 years and they are still making the majority of their money potentially in China or elsewhere in the world, but their families are here and they have been educated here.”
And, while the east side has yet to see prices spike that high, McCredie says it will happen, with the Main Street neighbourhood and surroundings naturally suited to today’s urban buyer unwilling to accommodate a lengthy commute into their lives.
“When you’ve lived here for a while, you look at the market somewhat differently to someone who just arrived, whether you’re an immigrant or investor,” McCredie explains. “When they look at Vancouver and they see the east side being Main Street or close by, they see excellent neighbourhoods with great single family homes with views, good proximity to downtown and with the airport incredibly close.
“If you look at that in the context of other cities throughout North America, or even globally, that’s a natural market we see is going to continue to strengthen, rather than people going the suburban route to Richmond or White Rock.”
McCredie says that the current desire for city-living over the suburbs is evident in Toronto’s traditional CEO commuter community of Oakville, where the luxury market has weakened as people fed up with the traffic, and baby boomers ready to be back in the city, have moved out.
While he is bullish on the prospects for single family homes in Vancouver, he says the condo market is a different case. Constant development in the downtown core, and the city’s continued push for density along the Cambie and Broadway corridors means that supply is not an issue and, consequently, no major escalation in prices is expected.
“Affordability is important,” he notes. “They’re definitely not cheap condos but they aren’t out of people’s reach – that’s where we’re going.”
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