Brian Hutchinson: Sky’s the limit in Vancouver condo market

By Brian Hutchinson

VANCOUVER — There’s a deep, gaping hole in downtown Vancouver and it’s getting bigger. After nearly four

years’ hiatus, work crews have resumed digging. The on-again, off-again 63-storey building on busy West

Georgia Street is on, again. Almost 300 condominiums, starting at $1-million each. A luxury hotel. Amenities

galore. Another indication of the froth that has returned to this city’s real estate scene.

Number crunchers report that housing prices are down slightly in Vancouver this year; in Toronto, the country’s

second most expensive real estate market, prices continue to rise. But economic conditions and logic don’t apply

in all corners of this city.

It still beckons wealthy and foreign investors, people besotted by glass condominium towers. People with cash to

burn on a “safe haven” second home with sweeping ocean and mountain views.

Across Vancouver, stunning new condominium developments are being planned. And selling out, within hours.

It’s reminiscent of the previous decade, when developers set about transforming a town notorious for leaky

condos into a forest of gleaming, premium-priced skyboxes. Buyers seemed prepared to oblige.

Before the economic crash in 2008 (and his death a year later) famed local architect Arthur Erickson put his mark

on the West Georgia Street tower. The building would be defined by its “hyperbolic parabloids,” elements intended

to make the building seem to turn 45 degrees in the sky.

Parabloids weren’t the only hyperbolic flourish. A 7,400-square-foot penthouse suite was offered for sale, asking

price $28-million. Other units, less regal but still grand, were pre-sold at $2,300 per square foot, a Canadian

record. The Ritz-Carlton agreed to put its name on the 24-storey hotel.

Then the markets tumbled and the Ritz waltzed away. Work stopped. Down payments were returned. Joo Kim

Tiah, the project’s Malaysian-born developer, was forced to make adjustments. He added density and efficiencies,

more condominiums and hotel rooms. The City of Vancouver approved his revisions in 2009, but the market had

moved on. The excavation pit was cleared of equipment and that’s how it sat, empty and forlorn.

Last Friday, the workers returned. Should everything go as planned, Vancouver’s turning tower will be completed

in four years. “I want to make sure I get it right this time,” says Mr. Tiah, who is just 32 years old.

It’s still a gamble, of course; building $500-million condominium towers is not for the risk-averse, even here, even

now. Reports that the apartments on West Georgia Street will be priced at $1,500 per square foot “raised a few

eyebrows, for sure,” says Jeff Hancock, senior manager of MPC Intelligence, a local firm that collects real estate

data and performs analyses for banks and other clients. “There’s always room for high-end product, but the

demand is concentrated in certain areas and among certain buyers, such as the Asian-Chinese buying

demographic. The Chinese are very savvy investors, very value oriented with long-term vision. They want

convenient locations that are near transit.”

In Vancouver, such opportunities are rare; when a new project is announced in any downtown location, or beside

one of the city’s elevated transit stations, investors line up to buy. In March, a 415-unit condominium project on the

three-year-old Canada Line sold out within a few hours. Later the same month, all 428 condominiums to be built

inside a new residential-commercial project downtown were pre-sold, again in a matter of hours. The

development will be headquarters for communications Telus, and is expected to cost $750-million to complete.

Site demolition and preparation began in February.

Telus Garden is big and bold, but it’s not a huge stretch for developer Ian Gillespie, president of Vancouver-based

Westbank Development Corp. Among other projects, Mr. Gillespie and his firm are responsible for the ambitious

Woodward’s complex that has changed the face of Vancouver’s notorious Downtown Eastside, and two Shangri-

La hotel and condo towers, one here, the other in Toronto. Impressive feats, especially since several projects

were completed after the economic downturn.

Now comes another audacious project, a 600-unit, 49-storey condo tower with separate retail buildings and a

daycare, designed by a Dane, Bjarke Ingels, one of the most celebrated architects of the day. The buildings are to

be set betwixt traffic viaducts leading to Vancouver’s Granville Bridge, which spans False Creek and connects the

city’s crowded downtown core to its verdant west side.

It’s not an obvious location, but there aren’t many options left. “All the low-hanging fruit has been picked,” notes Mr.

Gillespie. The project footprint “is restricted to a small triangle, tiny even by Vancouver standards,” says Mr. Ingels,

who came up with an interesting solution: The main tower broadens as it rises. “As the tower ascends, it clears

the noise, exhaust and visual invasion of the bridge,” Mr. Ingels explains in Westbank’s rezoning application, filed

with the city in January. “Our design reclaims the lost area as the tower clears the zone of influence of the bridge,

gradually cantilevering out over our own site.”

The project has generated excitement, thanks in large part to Mr. Ingels’ involvement and his aggressive design.

There are skeptics who say it may never be realized. It will, vows Mr. Gillespie.

“People are really tired of the s— that’s being built in this city,” he says. “People want to see something good.” And

he’s betting they’ll shell out for good over bad.