The current residential real estate market in Vancouver is currently facing rising interest rates, sky-high prices, and banks tightening their lending requirements. While the British Columbian government has implemented what has been referred to as ‘market cooling measures’, savvy real estate investors see residential real estate as more than just single-family homes. The demand for rental housing continues to rise while sales of houses, condos and townhomes decrease. Vancouver’s Multifamily Housing Status: According to Tycon Capital Jonathon Clogg, Metro Vancouver’s real estate market of commercial multifamily investment looks strong. With a 2.9-percent growth in 2018, the Vancouver economy is predicted to grow another 2.3 percent in 2019 and is attracting investors to the multifamily housing market.
Growing Demand
Jones Lang LaSalle, international real estate investment firm, predicts that the growing demand for multifamily assets throughout Vancouver shows no signs of slowing down. As Vancouver’s multifamily vacancy rates are at less than one percent, investment volume has averaged approximately $1.5 billion a year since 2015. Vancouver wants to accommodate the rising need for multifamily real estate and has established a 10-year housing strategy. According to the city of Vancouver’s 2018 Housing Progress Report, there are not enough rental inventories to meet the city’s current and growing demand. In 2016, there were 29,000 rental households with children, but only 18,000 two- and three-bedroom rental units in the marketplace.
Investment Strategies for Multifamily Real Estate
There are three classes of investment strategies for multifamily real estate: core, value-add, and opportunistic. Core investments are defined by low-compressed cap rates and a high cost per unit. Through property improvements and new revenue streams, value-add strives to increase cash flow. Opportunistic investment strategies offer investors ground floor development projects. A combining of value-add and opportunistic strategies is known to generate yields of 15-to-30 percent for passive real estate investors. In order to achieve these kinds of double-digit returns, partnering with an experienced development company with a proven track record for successful multifamily property investment is key.
Tycon Capital
Tycon Capital specializes in multifamily heritage restorations in Vancouver’s prestigious Westside neighborhood. High net-worth investors looking to align with a company capable of developing projects from start to finish would do well to consider partnering with Tycon Capital. Through JC Tycon Development, Jonathon Clogg Tycon Capital Vancouver and Jon can source the project, secure the property, and secure the project with permit and plans applications. Only once the land is secured and permits are in line does Tycon Capital move forward with investment opportunities to limited partners. To find out more about limited partner multifamily property development projects in Vancouver, BC, please contact Tycon Capital and Jonathan Clogg today.
Tycon Capital Jonathon Clogg 