One of the biggest and most high-profile redevelopment projects in downtown Vancouver has undoubtedly been 800-876 Granville Street, which would have retained the historic Commodore Ballroom and popular Commodore Lanes bowling alley and seen a new commercial building reaching 17 storeys built atop the historical block.
However, the developer of the project, Bonnis Properties, is no longer moving forward with the project.
"Unfortunately, the office market has really changed and the office demand is no longer there," Kerry Bonnis, who owns and operates Bonnis Properties with his brother Dino Bonnis, told STOREYS. "In the meantime, hard costs have gone up substantially, as have interest rates, and it's not possible to build such a property in today's market on spec. One would need to have office tenants in hand to basically move forward with the project and unfortunately the market rates have dropped significantly. Without having office tenants ready to occupy it, right now it doesn't make sense to move forward with the project."
Bonnis also said that although the project in its current form isn't moving forward, they will continue to explore new forms of the project.
"We're constantly re-analyzing and our agents continue to see if there are other opportunities, whether it be other commercial uses [such as] other large above-grade retailers or hotels. We're exploring other ideas in terms of if it could be adjusted for other uses."
Bonnis says that if they are able to find a new viable form for the project, it would be presented to the City of Vancouver as an amendment to their existing rezoning application rather than a completely new rezoning application, which Bonnis said "just isn't viable" due to the amount of time it would take from an approval standpoint.
A ground-level rendering of the 800-876 Granville Street redevelopment.(Perkins&Will / Bonnis Properties)
Additionally, Bonnis also told STOREYS that his company is actively pursuing several multi-family residential projects in the Broadway Corridor and that they have been selling some of their assets in order to secure capital for those future projects.
In December, STOREYS reported that the retail complex on 798 Granville Street had been put up for sale. The retail complex sits at the intersection of Granville Street and Robson Street, has long been anchored by Best Buy and Winners, and is undoubtedly recognizable by sight to many Vancouverites.
BC Assessment values the property at $103,295,000 and Bonnis says there's been a "wide spectrum" of interested buyers, ranging from local companies to institutional buyers and even overseas buyers.
"It'll be interesting to see who it'll go to in the end, but it's actually been quite encouraging seeing the diversity in the buyer profile," said Bonnis. "I think that really speaks well to our general Vancouver market compared to the rest of the country and rest of North America."
The retail complex on 798 Granville Street, at the intersection with Robson Street.
(Google Maps)
This week, Bonnis Properties' 950-978 Granville Street redevelopment project was also listed for sale. The project entails the construction of a new four-storey commercial building, which is already "substantially preleased," according to its sales brochure. Tenants set to occupy the building after it competes construction in June include a new Government of Canada passport office, Cornerstone International Education, KFC, Taco Bell, and Pizza Garden, among others.
Regarding this property, Bonnis told STOREYS that it made sense for them to develop it, complete it, and then sell it.
"In this high interest environment, it makes sense to basically build and sell, and keep the machine going, so to speak," Bonnis said. "Investing in real estate is far more capital intensive than it was in the past. The large purchasers today are pension funds, institutions, and so forth, and it makes sense for [developers like us] to basically go in, complete the project, sell it, and do it again. When it's a private company, there's only so much working capital. If you're only holding on to properties, you can't grow."
A rendering of the 950-978 Granville Street property in Vancouver.
(Perkins&Will / Bonnis Properties)
The proceeds from the sale of these two properties would be reinvested into Bonnis' future projects. Bonnis tells STOREYS that those future projects include one at the intersection of W Broadway and Yukon Street and one at the intersection of E Broadway and Kingsway.
Bonnis says they have submitted rezoning letters of enquiry for both projects and are currently working with the City of Vancouver on submitting rezoning applications for both projects.
