Vancouver rental property sales reach “staggering” $1.6 billion, Goodman Commercial projects 2021 record year

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      Commercial realtor Mark Goodman says the numbers tell a story.

      And the story behind the $1.64 billion worth of rental apartment buildings sold in Metro Vancouver for the first half of 2021 isn't just about one tale. 

      But before going into this, the midyear or January 1 to June 30 sales represent the “highest reported” volume since 2006.

      “It’s historic,” Goodman told the Straight in a phone interview Friday (July 30).

      A midyear Goodman Report published by Goodman Commercial, the company started by Goodman’s father David, notes that the previous mid-year high in Metro Vancouver was in 2018 at $1.45 billion.

      The same year in 2018 posted a record high in annual sales of multifamily rental properties at $2.98 billion.

      In Goodman’s view, this record may be shattered in 2021.

      “We’re going to hit over $3 billion the way we’re going,” Goodman said.

      As Goodman Commercial principal puts it, “It will be monumental.”

      “And I’m in the middle of a storm,” he added.

      Goodman and his co-principal Cynthia Jagger have been extremely busy.

      The partners accounted for $350 million in sales for the first six months of 2021.

      Goodman Commercial sold Tamarac Apartments, a 10-storey rental building at 1160 Broughton Street in the West End area of Vancouver, for $29,750,000.

      “The first half of 2021 saw 94 sales versus 27 for the same period a year earlier, a staggering change,” the Goodman Report states about deals in Vancouver and surrounding cities.

      Also, sales from January to June 2021 exceeded the entire annual total of 2020 by 45 percent.

      The city of Vancouver accounted for 69 percent of the total transactions, and 67 percent of the total dollar volume.

      The West End, Marpole, and East Vancouver saw the biggest number of sales.

      Overall, a total of 65 rental buildings sold in Vancouver in the first half of 2021.

      These deals represent rental suites numbering 2,298, and a total value of $1,108,882,499.

      Meanwhile, 29 rental properties with 1,049 suites were sold in surrounding municipalities in the first six months of 2021.

      The value of these properties total $534,558,280.

      In the interview with the Straight, Goodman noted a “liquid market” with lots of sellers and buyers.

      As for sellers, Goodman related that the story for many of them is one of exasperation over city and provincial policies.

      Whether it’s about constraints in redeveloping old properties to rental freezes and taxation, a lot of owners simply wanted to get out of the rental market.

      “Enough of the policies; we’ll move our money somewhere else,” Goodman related about what he has heard from property owners.

      As for buyers, there was a legion of them, and they have their own story.

      “There’s a lot of longterm money that’s saying, ‘Hey, I can’t keep my money in cash because it’s going to be inflated away. The fiat currency is dead. People are scared about bitcoin because it’s too choppy. The stock market is volatile.”

      They wanted to put their money where there is a “safe track record”, and saw apartment buildings as a good bet.

      “So we were selling buildings to people that have never owned them before they made their money,” Goodman said.

      Not too long ago, Goodman and Jagger went to Toronto and met with some of the biggest rental companies in Canada.

      “They’re buying here in British Columbia, and despite the fact that COVID had started, they said, ‘We want to move money into B.C.’,” the commercial realtor related.

      The reason it’s safe here is because the balance between supply of rental properties and demand for homes is very lopsided.

      “The city is doing such a poor job. Our municipal leaders…all they’re doing is they’re creating an environment where values continue to go up, because there’s so much demand and so little supply. Politicians vote down perfectly good rental projects or it takes years to cut through the red tape and the bureaucracy or they micromanage every process.”

      “So what happens is these very smart business people look at the environment we're operating here in B.C. and go, ‘You know what? From an investment perspective, you want to own property where there’s very little supply and a lot of demand.”

      “And this supply-demand balance is so pronounced in British Columbia that all a lot of money is pouring into here because they realize that they’re going to have a competitive edge for years and years. So many people want to move here, but there’s not enough supply.”

      So when eager sellers meet buyers looking to park their money, there’s going to be a “changing of the guard”.

      And as Goodman summed it up, “It’s more about wealth preservation than wealth creation.”