Island Deal Shows New Direction
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Real Estate Bisnow (Vancouver)

Island Deal Shows New Direction

Mainland Chinese investors are starting to surprise industry observers when it comes to where they're placing their commercial real estate dollars in B.C. The Fox Island deal is further proof of that, JLL's Mark Lester tells us. (You thought we were going to tell you they're throwing it out of hot air balloons at random?)

A few details of the transaction have just been released—the 46-acre island, off Sunshine Coast, sold for $2.4M. You need to fly 20 minutes by floatplane to get there.

Mark, who is the SVP of JLL's specialized assets division, which concentrates on more unique commercial deals, says you never would have seen Mainland Chinese buy something like an island in the past, or recreational properties in general. (Maybe they found an old treasure map for the island and aren't telling anyone.)

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Not So Grand News

OfficeMax Grand & Toy is closing all of its remaining 19 retail stores. Over 160 employees of the 1,300 staff will be impacted by the news. OfficeMax Grand & Toy GM Simon Finch tells Bisnow the company is focusing on its growing online business and direct sales. "Only a small percentage of the company's sales comes from walk-ins into the retail stores," he says. The company started in Toronto in 1882 as a stationery printing business. (Back then no one could afford paper, now nobody wants it.) The first retail store opened on Bay Street in 1926. It was taken over by US-based OfficeMax in 1996 and Office Depot bought the company last year for $1.2B.

CBRE SVP retail services group Tom Balkos tells us the news isn't a surprise —it's only 19 locations, and “they already culled through their suburban real estate many years ago.” It's a sign of the times—there are clearly many product categories that will continue to revert to either a sole e-commerce platform or one that is complemented by limited bricks and mortar (Best Buy/Future Shop, or other SKU-based retailers). “Goods that don't require an emotional or tactile connection,” Tom says.

There is also an interesting, related trend in retail, Tom adds—online retailers that have chosen to open physical stores like Bonobos and Frank & Oak. (Let's get a Facebook store up and running where you can buy people's info, the NSA's already shopping there.) “But with the unrelentingly, rapidly expanding role of the Internet many retail sectors will experience an ongoing struggle to find and strike a balance between channels,” Tom says.

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Sears Offloading More Real Estate?

An industry source tells us not to be surprised at the news that Sears Canada is open to more real estate sales. The company is in the process of a major restructuring. Up to now, with disappointing operating results, they've been dumping both valuable real estate and prime leases—seven in the past year, generating millions in revenue. Based on these recent sales, it appears they are going down the chain, starting with the most valuable assets, targeting (to date at least) the major landlords that both know the assets and potential demand and have the resource capability to add the greatest value, we're told. They also are reaching out to other retailers interested in taking some of the available space, as well as resizing and restructuring stores they want to keep. There are no Targets on the doorstep, to take all or a majority of the spaces, sources say. The impact of Target's troubles in the Canadian market means that big US retailers in particular are more cautious about expanding north of the border. (Sears is the only place that has pants in our unusual size, too, so that's a bummer.)


This Deal's A Rarity

A private investor has purchased the low-rise apartment complex on the northwest corner of West 10th Avenue and Oak Street in a $11M deal (a 4% cap rate). The complex is located across the street from Vancouver General Hospital. RealNet's Ryan Wyse tells us they haven't seen many larger apartment transactions so far this year, so this one is a rarity. The price per unit in this deal is just over $268k (there are 41 units in the property, the majority of which are one bedroom in the 525 SF to 660 SF category).


Always on the lookout for industry news, especially when it involves transactions or new hires and promotions. Email mark.keast@bisnow.com

 
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