While a market downturn definitely creates problems for developers of projects that are in the planning stages, the simplest solution can be to pause the project. For developers of projects that have already been designed and approved, however, a market downturn creates a different set of issues altogether — and there may not be one clear solution.
The current market downturn can generally be attributed to buyers remaining on the sidelines amid economic uncertainty, in both the residential resale and presale markets. As such, it has become difficult for developers to secure the number of presales they need in order to get their construction financing and begin building out their projects.
For projects that are ready to go, pausing may not always be the best solution because they may have mortgages that need to be paid and delaying a project can result in additional interest and overall costs. In the current market, it's also unclear where exactly the light at the end of the tunnel is (not to mention when it will arrive). Thus, for developers in this kind of position and who want to push through with their projects, many have turned to the solution of revising their projects to replace condos (or commercial space) with rental units, bypassing the need for presales.
In recent weeks, whether a coincidence or not, a trio of high-rise projects in Surrey that have already been approved by the City have become the subject of this exact kind of revision.
Tangerine Developments
At a land assembly comprised of 10054-10088 Whalley Boulevard and 10055-10089 137A Street, a few blocks north of King George Station, Tangerine Developments has previously proposed a 33-storey tower and a 38-storey tower with a total of 822 strata units.
The project was granted third reading (conditional approval) in February 2024, but now the developer is seeking to change all 379 units of the 33-storey tower (Phase One) into market rental units ahead of securing final approval for the project.
Since the project was last considered by Council, the City of Surrey has implemented the provincial transit-oriented areas (TOAs) legislation and eliminated minimum parking requirements. According to a City planning report, the project is now only required to provide 34 vehicle parking spaces, but the developer is still opting to provide 568 parking spaces, although they have now cut one level of underground parking.
The City also notes that the remaining 443 units planned for the 38-storey tower in Phase Two are set to remain as strata, but this revision allows the developer to proceed with the first tower and bide their time until they're ready to advance the second one.
GEC
Towards the northwest, at 10240 City Parkway, just north of the Central City mixed-use hub, Global Education Communities (GEC) had previously proposed a 49-storey mixed-use tower with 383 units, split between 215 rental units and 168 strata units.
Like Tangerine, GEC had already received conditional approval for the project in February 2021, but has now returned ahead of final approval with a revision that would convert three levels of planned office space into residential use and deliver all residential units — a total of 387 — as purpose-built rental units.
A June 2025 rendering of the GEC Education Mega Centre planned for 10240 City Parkway in Surrey. / Chris Dikeakos Architects
"The applicant has indicated that the proposed changes to the project are a result of current economic conditions," said City staff in a planning report. "To better align with evolving needs, the applicant is proposing to convert a portion of the proposed office space to market rental residential after consulting with SFU, UBC, and KPU about their housing requirements, including those for SFU's new School of Medicine. It is hoped this adjustment will support these institutions in attracting and accommodating students and faculty while ensuring the long-term viability of the project."
The office space and retail space planned for the second and third floor are unchanged, and GEC announced in early May that it was partnering with Pure Group on the project, which will be named GEC Education Mega Centre and have a construction budget of $330 million.
Allure Ventures
The third project is planned for a land assembly comprised of 13866, 13876, 13884, and 13896 100 Avenue plus 9954 and 9968 138A Street. The site is located to the southeast of Tangerine's site and this project is being undertaken by Allure Ventures, who has previously proposed 449 strata units across a 32-storey high-rise tower and two six-storey podium buildings
Similar to the other two, Allure Ventures had received conditional approval for their project — named Sky Living — in May 2022, but have now revised the proposal to cut the total unit count down to 422 and convert 207 strata units planned for the two six-storey podium buildings into purpose-built rental units. Previously planned two-storey townhouse units in the podium buildings are now planned as apartment units, and Allure has also reduced the amount of parking from 403 vehicle spaces to 254.
"In response to the current state of the real estate market, specifically pre-sales, the developer has pivoted their approach to meet the project’s proforma requirements and is now proposing to secure 207 residential dwelling units located in the 6-storey podium for 40 years as market rental with a Housing Agreement in advance of proceeding for final adoption," the planning report states.
The Sky Living project has also been in the news recently, after the project team launched a special promotion in May offering both a rental income guarantee and a buyback guarantee, in what the marketing team previously told STOREYS was an attempt to alleviate concerns of presale purchasers. It's just another sign of the times, much like the pivot to rentals.
