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Jonathon Clogg of Tycon Capital Sees Multifamily housing investment in Vancouver keeps growing: Hereʼs Why

Wednesday, 13 February 2019 12:20 AM

Nu Profile

VANCOUVER, BC / ACCESSWIRE / February 13, 2019 / The residential real estate market in Vancouver has been witnessing the perfect storm of rising interest rates, sky-high prices, banks toughening lending requirements, and the British Columbia governmentʼs implementation of what is euphemistically called “market cooling measures”. But astute real estate investors understand that thereʼs more to residential real estate than just single-family homes. While the sales of houses, condos, and townhomes are experiencing a normal market cycle of a downward correction, the demand for rental housing keeps rising. Growth in Vancouver multifamily housing According to the global professional services network PricewaterhouseCoopers the real estate market fundamentals in Metro Vancouver continue to look good in terms of commercial multifamily investment. After growing 2.9% in 2018 the economy in Vancouver is forecast to grow another 2.3% in 2019. This strong economic activity is attracting investors to the Vancouver multifamily housing market. International real estate investment firm JLL expects the “voracious demand for multifamily assets throughout Vancouver” to continue for the foreseeable future. With multifamily vacancy rates in Vancouver at less than 1%, investment volume in multifamily property has averaged about $1.5 billion each year since 2015.

Vancouver wants multifamily real estate development Many cities around the world lament the lack of housing while at the same time adopting a contradictory ‘not in my backyardʼ real estate development philosophy. Vancouver is much more realistic and has developed a 10-year housing strategy that recognizes the need for more multifamily real estate development.

The City of Vancouverʼs 2018 Housing Vancouver Annual Progress Report notes that there is not enough existing rental inventory to meet demand. For example, the Report notes that in 2016 there were 29,000 rental households with children, while there were only 18,000 2- and 3-bedroom purpose- built rental units in the marketplace.

Multifamily real estate investment strategies in Vancouver There are three types of multifamily real estate investment strategies: core, value-add, and opportunistic. Core investments are characterized by low compressed cap rates and a high cost per unit, value-add seeks to increase cash flow through property improvements and new revenue streams, while the opportunistic investment strategy offers investors a ‘ground floorʼ development project.

Of these three strategies, a strategic blend of the value- add and opportunistic approaches can generate yields of 15% to nearly 30% for passive real estate investors. To achieve double-digit returns like these itʼs necessary to partner with an experienced development company that has a proven track record of multifamily real estate investing in Vancouver.

Windsor Pacific Partners specialize in multifamily heritage restorations in the prestigious Westside neighborhood in Vancouver. Our limited partnerships are ideal for the high net worth real estate investor who simply doesnʼt have the time or market knowledge to handle their own development project from start to finish. JC Tycon developments certainly does as does Johny Clogg.

Tycon Capital and JonWe source the project, secure the real property, and package the project with plans and permit applications. Once the land is acquired and permit viability is established, then – and only then – do we offer investment opportunities to limited partners.

Please contact us today to learn more about the limited partner multifamily property development projects in Vancouver from Windsor Pacific Partners.

https://www.tyconcapital.com/

SOURCE: Tycon Capital — Jon Clogg

Topic:
Investor Relations
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