The Kaslo at Renfrew District office development in Vancouver has been listed for sale, according to a LinkedIn post by Matthew MacLean, Executive Vice President at commercial real estate brokerage Cushman & Wakefield.
The developer of the project is Vancouver-based Molnar Group, which was established in 1969 by Andre Molnar, who leads the company along with Julie Molnar and Dak Molnar.
The Kaslo at Renfrew District project is set for 2710 Kaslo Street, one block north from the Millennium Line SkyTrain's Renfrew Station.
The project will include 218,350 sq. ft of Class AAA office space across two seven-storey buildings. According to Floorspace, the East Tower has been fully leased to LaSalle College Vancouver, whose current campus sits right next door at 2665 Renfrew Street. The second floor of the West Tower has also been leased, while the upper floors remain available.
As to why Molnar Group is selling the project, Managing Director Dak Molnar tells STOREYS that the company regularly develops projects and then sells them.
"We've been a merchant real estate developer for most of our 55 years of business, so it's par for the course for us," said Molnar. "We have kept assets over the years and we do have a nice portfolio, but in general we're kind of a 60% to 70% merchant developer, so the plan was always to build this building, build up tenants, then trade it."
Originally, Molnar says that they had wanted to include some residential uses on the site, but could not get approval from the City.
"Ultimately, this came as a massive land assembly that we did eight to 10 years ago," says Molnar. "The City wanted office there. We knocked on their door to try to get some residential zoning for the property, but they were pretty hard-set on keeping the C-1 zoning in place."
A rendering of The Kaslo (rear, left) near Renfrew Station.(Arcadis IBI Group / Molnar Group)
Of course, looming over the market right now — not just in Vancouver but across North America — is the uncertainty around office assets, which Molnar recognizes and believes will last about five years.
"At the time, before COVID, it was a fantastic site for office. Obviously we're not happy about what happened to the market, but we're still in a position to make a margin here. We have been able to control our costs through this misery and very hard market and got ourselves down to a very, very thin margin, but there's still profit in the deal for us, thankfully. I think the office market is going to come back in about five years. Nobody is going to build office, obviously. It's a silly thing to do now."
A listing is not currently available on Cushman & Wakefield's website, and MacLean's post does not list an asking price, but Molnar tells STOREYS they are expecting to secure a price in the neighbourhood of $200M.
Molnar says he's confident the building will sell, particularly after more tenants are secured, adding that they've had several potential tenants taking a serious look at the building recently, including Sony Pictures and Hub Insurance.
"We're looking for a tenant to backfill the balance of the space and go out to the market, or we would sell to somebody that had a tenant in tow, or an owner-user," Molnar says. "And the owner-user market is quite fluid right now. There's a variety of large owner-users out there that like to own their own real estate. They, in my opinion, will also pay the most money as well, because they're not as influenced by the cap rate or by the investment."
The Kaslo is expected to complete construction before the end of the year.
