Co-op conversions

Peter Mitham, Business In Vancouver
Aug. 1, 2017, midnight

Winding down strata properties might be a new phenomenon, but spare a thought for co-operative housing arrangements.

Cynthia Jagger, who partners with David and Mark Goodman on apartment sales at HQ Real Estate Services Inc., said an increasing number of co-op properties have been coming to market of late. The latest for the Goodman team is the 26-unit Oakview Apartments on Oak Street at West 20th in Vancouver.

“It’s similar to strata,” Jagger said. “People see what’s happening.”

What’s happening is strong pricing as buyers seek properties suitable for operating as apartment blocks. While per-suite pricing for purpose-built rentals once lagged behind that of condos and co-ops, the Goodman team reports that purpose-built rental apartments sold for an average of $533,317 a suite in the first half of 2017. That compares with the Real Estate Board of Greater Vancouver’s benchmark price in June of $772,900 for a west-side apartment and $507,700 for an east-side apartment. With purpose-built rental buildings in short supply, older strata and co-op properties are a win-win: owners can capture more value by banding together than by selling their units individually, while buyers get to acquire multi-family properties for less than it would cost to build new. Some sites have future development potential that make them good long-term buys.

“Co-op buildings are generally superior to existing older rental stock, given owners have made extensive in-suite upgrades … and generally kept the property in good to excellent condition. Suite sizes are typically larger as well,” Jagger explained.

Properties zoned C-2, such as those along the Boulevard in Kerrisdale, are best suited for redevelopment.

“With city approval, a purchaser could potentially develop a condominium project with ground-floor commercial under the existing zoning,” Jagger said.

Regardless of what the developer chooses, Jagger encourages co-ops to seek legal advice prior to any sale as the deals are typically more complex than for other property types.