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Broker Round-up: The History Behind Key Deals in the Past 18
Months and What Deals are Anticipated Over the Next 12?
Moderator: Joe Hoffer, Cohen Highley LLP
Panelists
Jean-Charles Angers- RBC Capital Markets Real Estate Group Michael Betsalel- Colliers International Lance Coulson- CBRE Limited James Roy- Royal LePage Commercial
Recent Transactions Across the Country in the Last 12 Months
Recent Multi-Family Transactions – Greater Vancouver
LOCATION # OF DEALS AVERAGE PRICE PER SUITE CAP RATE RANGE
Vancouver (East Side) 8 $220,376 4.25% - 4.75%
Vancouver (Kerrisdale) 6 $413,901 3.25% - 3.75%
Vancouver (Kitsilano) 7 $336,845 2.7% - 3.2%
Vancouver (Marpole) 3 $220,529 3.75% - 4.50%
Vancouver (South Granville) 4 $263,108 3.5% - 4.0%
Vancouver (West End) 5 $282,500 3.0% - 3.75%
Burnaby 13 $272,374 3.75% - 4.5%
Langley 1 $88,721 5.5%
New Westminster 6 $129,374 4.5% - 5.5%
North Vancouver 7 $230,314 3.5% - 4.25%
Surrey 1 $180,451 4.4% (EST)
Tri-Cities 4 $119,849 4.5% - 5.5%
Fraser Valley 3 $94,353 5.25% - 6.25%
TOTAL METRO VANCOUVER 68 $219,438 2.7% - 6.25%
TOTAL VANCOUVER PROPER 33 $289,543 2.7% -4.75%
January 1 – August 22, 2014
*2013 Total Number Of Sales = 88 *2013 Total Sales Value = $556,660,484
NATIONAL APARTMENT GROUP - VANCOUVER CANADA’S LEADING MULTI-RESIDENTIAL REAL ESTATE GROUP
Recent Transaction – Case Studies Project Name: Norgal Apartment Portfolio
Municipality: Downtown Vancouver & North Vancouver
Number of Suites: 195 Suites (combined)
Sale Price: $50,550,000
Price Per Suite: $259,231
Cap Rate: 4.86%
“LARGEST MULTI-FAMILY PORTFOLIO TRANSACTION AT THE TIME OF SALE”
SOLD BY CBRE
Project Name: Courtyard Estates
Address: 2929 & 2959 Tims Street, Abbotsford, BC
Building Size: 108 Suites
Sale Price: $10,300,000
Price Per Suite: $95,373
Cap Rate: 5.53
“THE LARGEST MULTI-FAMILY TRANSACTION IN THE FRASER VALLEY IN 2014 TO-DATE”
SOLD BY CBRE
NATIONAL APARTMENT GROUP - VANCOUVER CANADA’S LEADING MULTI-RESIDENTIAL REAL ESTATE GROUP
Recent Transaction – Case Studies Project Name: Ladrillo Manor
Address: 221 Seventh Street, New Westminster, BC
Number of Suites: 39 Suites
Sale Price: $5,501,465
Price Per Suite: $141,063
Cap Rate: 4.86% SOLD BY CBRE
“RECORD PRICE PER SUITE IN NEW WESTMINSTER IN 2014 TO-DATE”
Project Name: Boardwalk Apartment Potfolio
Municipality: Burnaby, Surrey & Greater Victoria, BC
Number of Properties: 3
Building Size: 633 Suites (combined)
Sale Price: Approximately $140,000,000 (as reported on Boardwalk REIT’s Q1 2014 Quarterly Report, available on their website)
“THE DEAL OF THE DECADE” SOLD BY CBRE
NATIONAL APARTMENT GROUP - VANCOUVER CANADA’S LEADING MULTI-RESIDENTIAL REAL ESTATE GROUP
TOTAL SUITES & SALES VOLUME
PRICE PER SUITE VS. CAP RATE
Price Per Suite Cap Rate
2014 YTD BREAKDOWN
SELECT TRANSACTIONS | 2014
680 ROSELAWN AVENUE
• 64 suites
• Bathurst & Eglinton
• $17,250,000 ($269,531 per suite)
• 3.3% Cap Rate
• Purchaser:
O’Shanter Development Co.
SELECT TRANSACTIONS | 2014
TRIDEL PORTFOLIO
• 200 Suites – Dufferin & Kin
• 204 Suites – Aurora
• 380 Suites - Thornhill
• $151,000,000 ($192,600 per suite)
• 4.93% Cap Rate
• Purchaser: Starlight Investments
325 Willowdale Cres. 58 units $81,034 per suite NOI: $298,543 Cap Rate: 5.95%
880 Colborne Rd. 76 units $59,211 per suite NOI: $211,493 Cap Rate: 6.7%
620 Berkshire Rd. 62 units $65,323 per suite NOI: $274,811 Cap Rate: 5.85%
875 Colborne Rd. 49 units $63,265 per suite NOI: $139,823 Cap Rate: 6.6%
RECENT TRANSACTIONS
SARNIA
100 McFarlane Ave. 105 units $66,667 per suite NOI: $495,967 Cap Rate: 5.99%
50 Merritt Ave. 58 units $51,724 per suite NOI: $168,405 Cap Rate: 6.66%
343 Grand Ave. 76 units $77,632 per suite NOI: $397,783 Cap Rate: 5.9% Condo Title
RECENT TRANSACTIONS
CHATHAM
RECENT TRANSACTIONS
BARRIE
37 Johnson St. 187 units $171,123 per suite NOI: $1,775,202 Cap Rate: 5.2%
PETERBOROUGH
700 Parkhill Rd. W. 128 (Towns) $105,469 per suite NOI: $700,018 Cap Rate: 5.5% Vacancy Issues
Value Add Deals
VALUE ADD STRATEGIES
Despite low cap rate deals, there still exists tremendous opportunity to generate yield and increase capitalized value.
1. RENTAL INCREASE ON TURNOVER • Current Average Rent to Asking Rent • Current Average Rent to Market Rent • Current Average Rent to Potential Market
Rent
2. EFFICIENCY IMPROVEMENTS • Lighting, toilets, showerheads etc. • New boilers, control systems, windows, roof
etc.
3. OTHER REVENUE SOURCES • Card laundry • Parking, Lockers • Cable Revenue Sharing • Cell Tower • Vending Machines
VALUE ADD STRATEGIES
VALUE ADD STRATEGIES
VALUE ADD TRANSACTIONS
EXAMPLE #1 90 COLBORNE STREET 36 UNITS IN BRANTFORD Acquisition Price: $2,200,000 Total Costs (Acquisition and Capital): $3,400,000 Initial NOI: Negative Projected NOI: $305,000 @ 6% Cap Rate: $5,083,333
VALUE ADD TRANSACTIONS
EXAMPLE #2 23 LYNNWOOD DRIVE 55 UNITS IN BRANTFORD Acquisition Price: $1,650,000 Total Costs (Acquisition and Capital): $2,700,000 Initial NOI: $150,000 (Gross Income: $530,000) Projected NOI: $301,725 @ 6% Cap Rate: $5,045,417 (Gross Income: $700,000)
Buyer Strategies
Dealing With Low Cap rates
Project Name: Seaview Towers
Address: 450 Dallas Road, Victoria, BC
Building Size: 73 Suites
Suite Breakdown: 20 Bachelor Suites
30 One Bedroom Suites
15 Two Bedroom Suites
7 Three Bedroom Suites
1 Three Bedroom + Den Penthouse
Income: $691,437
Sale Price: $18,100,000
Price Per Suite: $247,945
Cap Rate: 3.80%
SOLD BY CBRE “ONE OF THE ONLY CONCRETE APARTMENT TOWERS TO SELL IN
VICTORIA IN THE PAST 10 YEARS”
NATIONAL APARTMENT GROUP - VANCOUVER CANADA’S LEADING MULTI-RESIDENTIAL REAL ESTATE GROUP
SELECT TRANSACTIONS | 2014
230 OAK STREET
• 327 suites
• DVP & Dundas Street E.
• $38,000,000 ($116,208 per suite)
• Cap Rate not reported
• Purchaser: Akelius Canada L
SELECT TRANSACTIONS | 2014
220/230 WOOLNER AVENUE
• 2 buildings, 260 suites
• Jane St., north of St. Clai
• $21,850,000 ($84,038 per su
• 5.9% Cap Rate
• Purchaser: Private