The Canadian Apartment Properties Real Estate Investment Trust's (CAPREIT) acquisition of Parque On Park in Langley earlier this year represents the single largest multi-family transaction of the first half of the year, according to a recent report published by Avison Young.
CAPREIT acquired the property from Burnaby-based Quarry Rock Developments for $53.7M, in a deal that was brokered by CBRE, according to a public listing.
The six-storey Parque On Park is located at 20449 Park Avenue in the heart of Langley — a short five-minute walk away from Langley City Hall and the City of Langley Library — and consists of 93 rental units, 11 of which are townhouses, and six of which are being utilized as short-term rentals.
The project completed construction in 2022 and is currently 97% leased (not including the short-term rentals). According to CAPREIT's website, asking rents for a 900-sq.-ft two-bedroom unit start from $2,930 to $3,075 while rents for a 1,200-sq.-ft three-bedroom unit start at $3,200.
The building also includes 152 vehicle parking stalls and 53 bicycle stalls, provided both underground and on the surface level.
The listing describes Parque On Park as a "luxury" purpose-built rental building, with building amenities including a fully equipped fitness centre, rooftop firepit, pickle ball court, community garden, off-leash dog park, and car-sharing program. The property is powered by Mondofi smart building technology, and also includes support for EV charging and makes use of solar panels.
Multi-Family Investment In BC
While CAPREIT acquired the property for $53.7M, the list price was $56.4, perhaps indicating a sign of a tempered market.
According to the Avison Young report, multi-family investment in BC totaled to $279.7M in the first half of 2023, after reaching a total of $410.6M in H2 2022 and $1.5B in H1 2022.
"This was primarily due to the heightened interest rate, which pushed the number of transactions to a 10-year low, and high price expectations from vendors," Avison Young said. "This lack of activity exacerbated existing supply issues, with a significant number of purpose-built rental projects stalling."
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Avison Young also notes that just over half of the multi-family transactions that occurred in the first half of the year were for properties outside of the City of Vancouver, with investors "chasing higher yields in the suburbs to justify values."
The second-highest multi-family deal was that of the Harbour Light facility on 119 E Cordova Street in Vancouver, which BC Housing acquired from The Salvation Army for $42M. Third was FDG Property Management's $16.75M acquisition of the Red Lion Apartments in North Vancouver from 0193914 BC Ltd.
"For market activity to pick up during the rest of the year, price expectations from both buyers and sellers need to adjust, which is expected to occur as interest rates stabilize," Avison Young adds. "These headwinds challenged the feasibility of development projects, with many of those in the pipeline no longer financially viable."
Examples of such projects include the 24-storey Contour Metrotown condo tower project in Burnaby that was listed for $19.8M, Anthem Properties and KingSett Capital taking over another multi-family project in Burnaby, and the Slate Block condo project in Vancouver that recently sold for $18.8M. (The latter two occurred in July, not H1 2023.)
Residential land transactions have also seen a significant drop-off so far this year, recording a total of $569.3M in H1 2023, after recording $1.8B in H2 2022 and $2.9B in H1 2022. On that front, the largest transaction so far this year has been Keltic Development's acquisition of the REVS Bowling site in Burnaby for $94M, followed by Rize Alliance and Minto Group closing on an assembly of five single-detached homes on Heather Street in Vancouver for $47.3M, where they are planning twin 18-storey rental buildings.
