The sale of the White Spot site on West Georgia for the whopping amount of $245 million dollars will inevitably set the pre-sale prices for this site to be offered at record numbers in downtown Vancouver!
The restaurant site and adjacent parking lots are zoned for at just under 398,000 square feet of residential space. At a sale price of $245 million, that works out to more than $615 per buildable square foot. The two sites were purchased by Carnival International Holdings Ltd which trades on the Stock Exchange of Hong Kong.
The market experts predict the pre-sale prices for condos in this project should be starting at a minimum of $2 million! What we are seeing in condo market today, especially in downtown Vancouver, is a widening gap between the average pre-sale prices and the average re-sale prices of newly built apartments. For example, in some buildings such as Telus Gardens, the newly finished condos on mid floors (units between 20th and 30th floors) are selling for $1,400 per square foot on average, while at the same time the pre-sale units on the mid floors of Grosvenor Pacific are priced and sold at around $2,000 per square foot.
We all know that the pre-sale market is quite unique in terms of Buyers demographics, the Buyers’ needs and expectations, the Developers’ marketing tools, and the economic risks and returns for both the Buyers and the Developers. This segment of the market may not be a good representative of the real property values at any given time, but it could be an indicator of the market expectations in terms of future property values.
Now the important question remains of what really could lower the risks of the pre-sale purchasers if the market prices stay flat or decline between the time of the purchase and when the project is ready?
In my opinion, the only factor that could lower the risk of paying premium prices for pre-sales is to purchase units in the buildings that are at least so unique in terms of the architectural design, location, and amenities. There is always a great demand for designs that set new standards!
What we have been witnessing in downtown Vancouver in recent years is the construction of more Iconic buildings like The Butterfly or Alberni by Kengo Kuma than the buildings that just resemble a box! The increasing demand from the purchasers who are willing to pay higher numbers for the designs that last forever could have set this trend.
It will be quite exciting to see what will be developed on the White Spot site in the future, and how the downtown Vancouver skyline will change in the next 10 years!