Vancouver Commercial Real Estate Podcast

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May 11, 2022
VCREP #50: Is the Fraser Valley Area the Best Real Estate Market in the Lower Mainland? With Jonathan Meads

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This week, Cory and Matt welcome Jonathan Meads, Vice President of StreetSide Developments, to discuss the booming Fraser Valley markets and the exciting projects StreetSide has available.

One of the biggest secrets in commercial real estate is spotting the trends and staying ahead of them. We have heard for a while now that the Fraser Valley markets have been booming, and Jonathan unpacks why they keep their focus primarily on this area and where they see these markets going, keeping in mind the continued population growth and how the pandemic has created a new work environment to navigate as things slowly return to their new normal.

One thing a lot of us don’t know is just how big StreetSide’s parent company Qualico is, and Jonathan gives us a little peek inside one of Western Canada’s largest private developers. Another insightful episode you don’t want to miss!

Who is Jonathan Meads?

I moved to Vancouver 20 years ago. I worked in the residential, commercial sector in the UK. Ten years ago I started working for StreetSide Developments and a few years ago got promoted to the Vice President position.

What is StreetSide Developments? What is Qualico?

Qualico is one of the largest privately owned real estate businesses in Western Canada. They’re based out of Winnipeg and have a number of business units operating under them. They have three sub-companies in BC, one of which is StreetSide. We do all of the multi-family projects, so anything with strata.

Qualico has business units spread across Canada and Texas. StreetSide has four business units in Vancouver, Calgary, Edmonton and Winnipeg. The single family business units under Qualico are all across Western Canada. We also have a unit that looks after held real estate and we work in the supply industry with lumber, flooring and other business supply companies.

Qualico was started in 1951 and has been all around the world. We’ve been growing ever since!

What is unique about Qualico?

There are a few things that make Qualico successful. Each of the business units under Qualico is independent and needs to be able to perform. However, there’s a strong business company behind us that supports us. Qualico allows us to independently make decisions and gives us their support. I appreciate that aspect of entrepreneurship and ability to grow. I was attracted to the integrity of the Qualico brand.

Can you tell us about some of the multi-family development projects StreetSide has worked on or that are coming up?

StreetSide BC is celebrating its 10th anniversary this year. We believe we’re building good quality projects and are looking to gain more longevity in the market. We’ve been active for the last 10 years and have been nominated for awards for some of our projects, like Orchard Park. Orchard Park is an 80-unit townhouse project in South Surrey with a Scandinavian design.

We’ve been working primarily in wood to date, and mainly in Surrey and Langley. We started in townhouses and have moved into four and six storey condo buildings. We’ve also expanded into Burnaby and Maple Ridge, as well as into concrete projects. Our biggest project to date is Canopy in North Surrey at 302 townhouses. We’ll surpass that with an upcoming 320 home project in South Surrey.

As StreetSide moves towards Vancouver, we’re looking to increase density. We have projects in the Hastings corridor in Burnaby, one of which is a mixed-use project with 62 residential units plus retail and office space. We are also starting our first high rise project in Surrey which will hopefully be the first of several similar projects. Density is something we need to deal with and address.

StreetSide is moving towards bigger projects and concrete buildings. Are bigger projects and more density part and parcel of working in Metro Vancouver?

A lot of cities are realizing the need for more density, especially around transportation nodes. Vancouver is a global city. And to achieve vitality in a global city, you need that vertical growth. You need opportunities to live, work and play.

Not everyone can afford to live downtown so we need to expand the opportunities to live near skytrains with vertical density. If we want a vibrant city, we need to densify. The City of Surrey knows we need to increase density around the proposed skytrain stations. So at StreetSide, we want to get involved in those markets.

What makes a good development site?

Determining a good development site is based on a variety of factors and depends on what the neighbourhood plan allows. For example, South Surrey is a different story than Burquitlam – it doesn’t have the skytrain coming in so we don’t need these huge, concrete towers. We look at how sites relate to the neighbourhood plan and we look for sites that are zoned correctly or with an easy ability to rezone.

Once we build a successful project, we want to remain in that marketplace and keep doing what we’re doing. That allows us to be efficient and become more well-known.

For high rises, you have to do your homework. What is allowed? What are residents looking for? What is the city trying to achieve? You have to be ready to adapt.

What real estate markets does StreetSide want to go into?

StreetSide is predominantly building in Metro Vancouver but there are some areas that intrigue me that we’re not operating in yet. I believe there are some opportunities in Delta and Abbotsford. We recently picked up a site in Squamish and I think it has great growth potential.

I really wrestle with the North Shore right now. I’ve worked in those municipalities but the problem is access. Transportation links are a key issue. The trades we work with in the Fraser Valley have a hard time getting to the North Shore. There’s a premium to working there and other companies have that figured out. For us, because it’s not our core area, it makes life harder.

What is the impact of transportation on development?

As we move into building more high rises, transportation becomes more important. Is the skytrain walkable to our projects? That’s important to our Surrey Central and Burquitlam projects, as well as Langley where the skytrain is coming in. In more car-based areas, like South Surrey, we have to look at access to the airport or the border.

People want to move with a limited number of changes and maximum efficiency. As we densify, we need to look at how we can move people better.

How do you time the real estate market? What is your approach to the ebbs and flows of the Vancouver real estate market?

At StreetSide, we do think about the timing of the market. Should we slow down or rush our projects based on what’s happening? We try to be dynamic within the confines of planning policy. But we have to look at things from a broader view and stay calm.

Metro Vancouver is going to continue to grow. But at the moment, we’re not approving that many homes. The approval constraint is talked about a lot in the press. But there are also economic restraints, like issues with the supply chain, that will impact completions.

The Vancouver real estate market may soften in the next 12-18 months but in the long term, we’re still growing.

How are you navigating inflation and increased supply chain costs and delays?

I have a great team here at StreetSide that helps me look ahead at where we’re going. People don’t know that over 25% of everything we sell goes back to the government. Our construction costs have risen massively in the last 1-2 years. So it’s a significant factor.

It’s not just pricing but also availability of resources. Lumber was so stable for so long but has been erratic the last two years. It has made predictions very hard. Glass has been another resource that was hard to find. All of those things have restricted production which hurts pricing.

Qualico being a bigger business does help us navigate supply chain issues. We have business units that track lumber and produce internal reports every week for us. At StreetSide, we work very closely with local lumber companies who give us intel on the ground. We try to adjust what we do based on the data we receive.

Thoughts on the Vancouver rental market and philosophy of home ownership:

Some people may never own a home; they may rent for life. For some people, home ownership is not available to them. So how do those people plan for their future?

In Sweden, 70% of people rent for their entire lives. So this isn’t a new thing – it’s just new to us. We need a rental market that has a range of property types. And we need a change of thinking.

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Vancouver Commercial Real Estate Podcast

For all the curious minds interested in commercial real estate investing, grab a coffee and pull up a chair because we have exclusive stories and tips from commercial real estate brokers, investors, developers, economists, urban planners, and everyone in-between. From the successes and failures to the motivations and lessons learned, the Vancouver Commercial Real Estate Podcast is your insight into commercial real estate in Vancouver, Victoria, Kelowna, and beyond.

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This communication is not intended to cause or induce breach of an existing agency agreement. E&OE: All information contained herein is from sources deemed reliable, and have no reason to doubt its accuracy; however, no guarantee or responsibility is assumed thereof, and it shall not form any part of future contracts. Properties are submitted subject to errors and omissions and all information should be carefully verified. All measurements quoted herein are approximate.