Goodman Commercial

A 0.64-acre development site in Burnaby’s Edmonds town centre area was approved for sale through the courts July 9, attracting multiple bids at the last minute.

“What began as a regular day in court for the approval of a $4.6 million offer turned into a rare, two-round sealed bid process in front of the judge, something seldom seen in court proceedings,” Mark Goodman of Goodman Commercial Inc., which was retained by lender Desjardins to market the property, posted to LinkedIn. “With six additional bidders stepping forward, the courtroom briefly resembled a live trading floor rather than a typical hearing.”

Originally listed at $13 million, the three-lot assembly at 7109 18th Ave. and 7358–7376 18th St. presented buyers with an opportunity to move forward with rezoning approval for a proposed 29-storey residential tower that’s currently at third reading or pursue a lower-density wood-frame or multi-family rental project without any inclusionary zoning requirements.

The site was previously owned by Square Nine Developments Inc., which has faced multiple foreclosure proceedings over debts to creditors exceeding $100 million. The Edmonds site was slated for One18, a project with a mix of rental and units for purchase.

However, a sluggish market for residential land sales – particularly highrise sites – saw the price of the Edmonds site dropped to $5.8 million this spring to secure interest. Once this happened, other buyers stepped up.

“Now we’re getting action. The big guys are coming out,” Goodman told Western Investor in June. “Sellers have capitulated and are meeting the requirements developers need on their profit margins, which are definitely higher now.”

The change in tempo resulted in a court-approved sale price of $6 million – an increase of $1.4 million, or 30 per cent, over the initial offer presented to the court.

The court-approved price was also 3 per cent above the latest list price, underscoring the ability of sharp pricing to generate interest and maximize the value for sellers.

“This just shows you what happens when something is priced sharply,” said Megan Johal of Goodman Commercial, who guided interested parties through the process outside the courtroom. “We were expecting a few sealed bids to come in in the morning; we were not expecting there to six groups in front of us with bids in hand.”

The bidding went to a second round in the afternoon, with two of the original group dropping out and four of the original group presenting new offers. A numbered company, 1598753 B.C. Ltd., won out over the other parties, including the party that submitted the initial offer presented to the court.

“[The] setting itself created a level of urgency that was exciting to see,” she said. “We drew out those extra bidders, and it’s that competition that was happening both in the morning and the afternoon bid that led to that final result.”

While competing bids aren’t unknown, with the sale of the Versante Hotel in Richmond last October unfolding as a live auction, the sheer volume of sealed bids this week for the Edmonds site was unusual.

The closing date, July 16, was also expedited, underscoring the buyer’s enthusiasm to secure the site.

“We’ve got to let the market speak, and yesterday was such a great example of that,” Johal said. “It was speaking very loudly what the value of the property was.”

Burnaby development site sparks competitive bidding process in court Site of Square Nine's One18 project in Edmonds sold for $6 million

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𝗕𝗶𝘁𝗶𝗻𝗴 𝘁𝗵𝗲 𝗛𝗮𝗻𝗱 𝘁𝗵𝗮𝘁 𝗕𝘂𝗶𝗹𝗱𝘀: 𝗥𝗮𝘁𝗵𝗲𝗿 𝘁𝗵𝗮𝗻 𝘂𝘀𝗶𝗻𝗴 𝘁𝗵𝗲 𝗯𝘂𝗶𝗹𝗱𝘂𝗽 𝗼𝗳 𝘂𝗻𝘀𝗼𝗹𝗱 𝗰𝗼𝗻𝗱𝗼𝘀 𝗮𝘀 𝗮 𝗹𝗲𝗮𝗿𝗻𝗶𝗻𝗴 𝗼𝗽𝗽𝗼𝗿𝘁𝘂𝗻𝗶𝘁𝘆, 𝗽𝗼𝗹𝗶𝘁𝗶𝗰𝗶𝗮𝗻𝘀 𝗮𝗻𝗱 𝗽𝘂𝗻𝗱𝗶𝘁𝘀 𝗵𝗮𝘃𝗲 𝗮𝗴𝗮𝗶𝗻 𝗹𝗼𝗼𝗸𝗲𝗱 𝗳𝗼𝗿 𝗮 𝘀𝗰𝗮𝗽𝗲𝗴𝗼𝗮𝘁𝘀

Nobody eats their own quite like Canadian politicians, and no constituency takes more abuse than the real estate development industry.

In other sectors, politicians line up to celebrate business success or to offer sympathy and support when times get tough. In the development and construction industry, which employs more British Columbians than forestry and mining combined, success is met with stricter regulation and higher taxes; then, when the market shifts unexpectedly, the industry itself takes the blame.

This past month delivered a textbook example. Following the federal and provincial governments’ botched announcement of a plan to purchase 2,200 unsold condo units, politicians across the spectrum lined up to take their shots – not at the policy, but at the developers who built the units in the first place.

Premier David Eby was careful to explain his policy would not assist developers who “made a bad bet.” Federal Conservative leader Pierre Poilievre criticized the developers who, he said, “wanted to build those condos at a time when we were in a housing bubble.” Former BC Conservative leader John Rustad called the whole idea “subsidizing incompetence.”

The same politicians who have spent the better part of a decade demanding more housing, imposing targets on municipalities, and spending tax dollars to try to speed up production, now line up to deliver a unified message: the companies that answered the call made bad decisions, built at the wrong time, and deserve the misfortune they’re now experiencing.

The so-called condo bailout is misguided policy worthy of criticism. But punching down on companies that have been doing their best to keep staff employed – at a time when government miscues are already crushing the industry – is a profound failure of leadership. When we talk about creating an anti-business environment, this is it.

𝗧𝗵𝗲 𝗯𝘂𝗶𝗹𝗱𝘂𝗽
Consider the conditions that brought us to this moment. Coming out of the pandemic, interest rates were at rock bottom, and federal immigration policies were driving the largest population increase in BC history. There was a massive appetite for condo units, with all signs pointing to a structural shift in demand.

But in BC – notorious for its high costs and painfully slow approval processes – it can take years to break ground on a single project, even when the numbers do work. Against such constraints, the sudden escalation in demand created predictable results. Rents rose sharply. Home prices rose sharply. Presale units were being absorbed within days or weeks. Every indicator that developers rely on pointed in the same direction: build more housing.

𝗧𝗵𝗲 𝗿𝘂𝗴 𝗽𝘂𝗹𝗹
Then everything abruptly changed.

Interest rates were hiked higher and faster than anyone expected, driving up mortgage costs and choking off demand from homebuyers and investors alike. Then, under political pressure over housing costs, the feds slammed immigration into reverse – triggering BC’s first population decline in 150 years. The BC NDP, meanwhile, continued its ideological campaign against the small-scale investor, piling on new taxes and restrictions designed to crush the market responsible for the very supply they would later seek to take credit for. Global trade disruptions and geopolitical tensions then piled on, further rattling markets and dragging on growth. All the supply that politicians were begging for during the boom landed in a completely different market.

We now have 4,000 and counting completed and unsold condos in Metro Vancouver. These weren’t inherently flawed units that were never going to find a buyer; many were already sold once – to buyers who defaulted when they could no longer get financing or close. As unsold units pile up, prices have come down, but buyers remain cautious, waiting for the market – and the policies shaping it – to stabilize.

This is not the portrait of an industry that went rogue, made bad bets, or speculated on a market that never existed. This is an industry that responded rationally to market signals and got caught when everything was abruptly flipped on them.

𝗧𝗵𝗲 𝗹𝗲𝘀𝘀𝗼𝗻
Politicians and housing observers are hunting for someone to blame, and for a narrative that gets them attention. But neither will fix what actually went wrong.

At some point, those unsold units were exactly what the market was asking for. The claim that developers misjudged demand or built the wrong product – the dog-crate condo argument – is a tidy story for anyone looking for a villain. It’s also lazy. When these same projects were selling out within days and “unlivable” units were renting for record highs, nobody claimed they were not serving a genuine market.

The lesson here isn’t that developers built too much or misjudged the market. It’s that an industry layered with costs and red tape is unable to respond quickly to shifts in demand. This lag between supply and demand produces the shortages and price spikes we’ve spent decades fretting about.

Blaming the developers now makes no sense – and it won’t fix the problem. What will is finally addressing the glaring issues that make it impossible for them to respond quickly, at prices the market can actually bear. Otherwise, we’re doomed to repeat the cycle – with fewer developers left standing who can – or are willing to – stomach the risk.

https://goodmanreport.com/market-insights/biting-the-hand-that-builds/