Investors eye prizes in downtown Richmond
Several sizable chunks of commercial real estate along No. 3 Road in the city’s downtown core have recently been gobbled up by investors or are about to be, The Richmond Review has learned.
Much of the land is designated for future residential use in the City of Richmond’s official community plan, and prices have soared.
The property at 8111 Ackroyd Rd., the former home of Chapters bookstore, has a “conditional contract for sale” with a price tag of about $68 million, according to sources. This property, known as Richport Town Centre Shopping Mall, was sold in 2009 by Colliers, when it had an assessed value of $32.3 million, according to Vancouver Real Estate Blog (vancommercial.ca).
What’s known as the Time Square property on No. 3 Road, a strip mall between Park and Cook roads, directly across the street from Richmond Centre shopping mall, sold for $20.2 million less than 18 months ago.
Another 4.9 acre assembly of three addresses, at 7960 Alderbridge Way, 5333 and 5411 No. 3 Road—boasting 742 feet of unobstructed frontage along No. 3 Road, at the southwest corner of Alderbridge—sold earlier this year for $69 million.
The Acura dealership has an accepted offer of $17 million, but that deal won’t close for a few months and this site is designated to remain commercial, according to the city’s OCP.
And the home of The Richmond News, at 5731 No. 3 Rd., was sold by Glacier Media Group for $6 million in January. The buyer was a private investor (0986629 B.C. Ltd.) Another adjacent property is now on the market for $6.6 million.
Bal Atwal, a principal with Avison Young Commercial Real Estate Inc., has been involved in the commercial real estate industry for more than a decade, the last seven with Avison Young.
He sold the Alderbridge Way and No. 3 Road property, which includes 78,200 square feet of single-storey retail buildings, and is across the street from the Lansdowne Station of the Canada Line.
“The owners have seen the prices escalate to a point where they have hit new peaks and are starting to flatten out,” Atwal said. “Owners are seeing this as a potential right time to sell.”
Also driving landowners to sell now is the knowledge that the next price escalation is “probably another five to 10 years away,” he said.
With property taxes based on land value, which has increased about 40 per cent in the last five years, Atwal said his clients see this as an opportunity to sell their land assets and place their equity elsewhere.
Atwal said he’s been involved in about 90 per cent of the major deals along No. 3 Road over the last three or four years.
While he’s involved in the Chapters property sale, he said he’s bound by a confidentiality agreement and wouldn’t confirm the selling price or the identity of the prospective owners.
While a significant number of the buyers involved in the recent transactions along No. 3 Road are from overseas, he clarified that foreign investors do not form the bulk of the buyers.
“A lot of the properties have been bought by local private investors,” he said.
Asked if any of his clients are on the verge of developing their newly acquired land, Atwal characterized the investors as being patient.
“Many are willing to hold the property at very low returns and wait for the next cycle to arrive,” he said.
While plenty of investors are interested in Richmond, the challenge to this point has been convincing land owners to sell.
He said the sale of the IHOP site, at the corner of No. 3 Road and Park, for $3.4 million in 2011, set a benchmark for price that broke previous price barriers which had been flat for a few years.
Asked if the most recent sales will serve as a domino effect, Atwal said time will tell.
But landowners risk their sites becoming orphaned, a well known local example being the southeast corner of No. 3 Road and Westminster Highway. That property now has limited development options because of all the completed construction that hems it in on both sides.
Other notable sales downtown Richmond sales by Atwal included 3411 and 3471 No. 3 Road for $8 million in May of 2012, 6700 No. 3 Road for $3.3 million in March of 2012, and 3711 No. 3 Road for $7.1 million earlier this year.